What are Dynamic NFTs and How Do They Work?

What is an NFT?

NFT stands for non-fungible token. It is a type of token that does that is unique and is a not a stand-in for other tokens. In most cases, a cryptocurrency issued by a blockchain is fungible meaning that it can be swapped for another currency on account of same intrinsic value and technical design.

However, each NFT has a unique tokenID and digital address. At the same time, NFTs usually host metadata such as video, audio, or other types of media files.

In this manner, NFTs allow users to own a unique digital object. NFTs are usually present in the form of digital artwork that artists can create and buyers can purchase digitally. After creating a digital artwork, the artists can mint it to generate an immutable tokenID.

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NFT can be described as a tradeable token with a unique tokenID. NFTs can be static in nature that grants a litany of advantages for the artists such as direct token sales without brands or labels distributors.

What is a Dynamic NFT?

NFTs are the most popular type of NFTs that are utilized in play-to-earn projects such as digital collectibles.  These products are also used to digitize a number of investment products from the tangible realm such as real estate contracts, patents etc.

However, the data inscribed on static NFTs is immutable and cannot be updated. This feature can be limiting for NFT issuers such as fantasy sports leagues, games, and health care sector etc.

This is where Dynamic or dNFTs are introduced. These types of NFTs allow the issuers to make changes to the data on the platform via smart contracts. It is possible through automatic encoding edits in a smart contract within the NFT.

In this manner, the issuer is able to set parameters for changing and editing the information present on an NFT. In addition to metadata, Dynamic elements on the NFT are also edited.

Dynamic NFTs are minted based on certain conditions. Dynamic NFTs features are triggered based on user interaction. dNFTs are unique and customizable and contain programmed triggered to render designed output.

Utility of Dynamic NFTs

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NFT title and features are specified in the metadata. The tokenID of an NFT serves as a permanent identifier of the ownership. Generative NFT art has a number of features that are different from others.

These features of the NFTs are mentioned in the metadata of an NFT with an IPFS link of an image or video that is related to the traits of a given NFT. For dNFT, these features change based on outward changes.

These features are necessary for updating the digital product for projects such as gaming. A blockchain game character can have a dNFT to reflect its statistics. These in-game states can continue to upgrade and change as the players levels up. dNFTs are also used in tokenization of tangible assets such as property contract, maintenance history, age, market value, and others.

In the same manner, different sectors can issue a dNFT that has data editing options to enable upgrade in real time. It is important to note that dNFT metadata changes are affected by on-chain and off-chain factors.

How do dNFTs Work?

As mentioned before, the metadata on dNFTs is edited to make changes to the digital product. Various blockchain projects such as Chainlink can use various options such as API to feed the updated data changes to a dNFT smart contract.

On this account, the most commonly utilized data source is decentralized oracle network. In this manner, smart contracts can send off-chain updates to a dNFT based on real-world information.

Another method for updating dNFT smart contract is using automation. Automation is programmed in the smart contact of an NFT that trigger the required action when predetermined terms are completed.

In this manner, the dNFTs can become autonomous and decentralized. Verifiable Random Function or VRF are also used to create a dynamic change in a dNFT.


dNFTs are a new type of NFT product with decentralized projects upgrading this product. The potential utility of this type of NFT can lead to various industries adopting this design. Dynamic NFTs are used in a few DeFi projects such as Regenerative Resources Short Film.

Author: Isacco Genovesi

Isacco writes news articles, reviews and guides about cryptocurrencies including technical analysis, blockchain events, coin prices marketcap and detailed reviews on crypto exchanges and trading platforms.

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