What are dynamic Non-Fungible Tokens (NFT)
Why do we need dynamic NFTs?
Platforms based on the blockchain allow the exchange of NFTs. However, there are some limitations: blockchains provide a safe environment that is disconnected from all other systems. Due to these security measures, NFTs cannot interact with data external to the blockchain. It is precisely to solve this problem that dynamic NFTs were created.
How does it work?
The connectivity problem of NFTs is solved thanks to the so-called oracles. Basically, an oracle allows the NFT to use external data or systems. For example, in an online game the NFT could be the equipment you use for your character. The latter can be upgraded thanks to a dynamic NFT, and then those items can be included in your NFT and be traded easily. In simple terms, an NFT is dynamic when it changes depending on the data or certain things that happen in an event. They are like event-based rewards.
How are they used?
Here are some use cases where dynamic NFTs are used bringing great benefits:
● NFT based on competition
Multiplayer online games often imply unique in-game items that give players some advantages. Games can mint rare game objects such as NFTs on the blockchain, where the ownership of the NFT allows special privileges within the game. Oracles can also be used to transfer ownership and settle competition outcomes by assigning a value to the activities.
● Reward and Management Systems
Brands are always looking for innovative ways to reward consumers and engage new ones. In fact, NFTs are introducing new tools meant for this purpose, which encourage consumers through rewards that come in the form of digital tokens.
● Authenticity Verification
Dynamic NFTs can be particularly useful for tracking unique assets and incorporating them into existing processes.
● Assessment updates
Asset values are not static but require updates when exchanged or used as collateral for loans and crediting processes. Oracles provide a gateway to access trusted external data sources, whether through an API, a set of multiple sources, or crowdsourcing.
At Rarecubes, we create various types of NFTs, including dynamic ones. For example, we make dynamic player cards that update based on their stats and achievements or customizable items based on the buyer. For example, we can put your name on your favorite player’s shirt!
Dynamic NFTs can also be a great way to rewards your fans. For example, if a player scores a certain number of goals, there will be a limited-edition token minted. Those who manage to buy or to win them will be rewarded with special access to meet the players.
The possibilities are endless. If you don’t have any ideas, contact us and we’ll give you some tips!
So to summarize, a dynamic non-fungible token (NFT) can respond to real-world events. As we have seen, it can bring many benefits to its users. This is probably going to be the next revolution in the blockchain field.