Dynamic NFT vs Static NFT: What are dynamic NFTs (dNFTs) and how do they differ from static NFTs?

Non-Fungible Tokens (NFTs) have become one of the most widely used applications for blockchain technology. They are fast entering the mainstream with companies as well as celebrities launching their own NFT collections. In addition, in just one year, institutional and private investors have invested billions of dollars in static NFT art.

With dynamic NFTs (dNFTs), the next step in the development of non-fungible tokens has begun. Until now, most NFTs have been static, mostly used as digital collectibles and by NFT art projects and game-for-earn game projects.

The static NFTs have fixed metadata after being embossed on a blockchain. This restricts their use for purposes such as tokenizing real-world assets, building progression-based video games, or creating blockchain-based fantasy sports leagues. All of these require that the metadata be updated. This is where dNFTs come into play as they can change based on external conditions.

“Dynamic NFTs are the latest generation of technological advances as the NFT industry evolves. The dynamic NFTs are here to permanently change the NFT market landscape,” said Vijay Pravin Maharajan, founder and CEO of bitsCrunch.

The majority of the NFTs you may have traded and / or viewed are ‘static’ NFTs. These have IPFS-stored metadata that has been locked (or “frozen”) and cannot be changed. The ERC-721 token standard for Ethereum defines static NFTs and mandates the execution of smart contracts, while the newer ERC-1155 standard defines a dynamic NFT (dNFT), which makes it possible to change metadata in response to external factors, he adds .

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Experts say that a data oracle like Chainlink is often used to deliver the shifting data needed to update a dNFT. Chainlink has actively promoted dNFT use cases.

Darshan Kothari, founder and CEO of Vardhaman Infotech, says that dynamic NFTs have the advantage of being able to adapt dynamically in response to a real event transmitted to the blockchain.

“Dynamic NFTs have an upgraded increase in their authenticity and can be used in a variety of ways. DNFTs have a fairly flexible smart contract, which allows them to change over time in response to real-world conditions,” says Kothari.

According to the experts, a number of events outside the chain or on the chain can lead to changes in a DNFT’s metadata, which shows DNFT’s endless possibility to expand the NFT design area, especially for digital collectibles and new game mechanics.

Both off-chain and on-chain data sources can be used as inputs of dynamic NFTs to change token metadata. Therefore, the capacity of tokens metadata is to change the primary difference between a static and dynamic NFT.

For example, a football player’s digital trading card may contain performance statistics as goals scored. When converted to NFT form and then connected to the real world via oracle networks, the same trading card can update the statistics in real time in response to the player’s live game performance.

“When a player achieves a certain goal, such as completing a certain amount of hat-trick, NFT projects may automatically create new NFT cards in real time. This dynamic behavior would be a step forward in the development and trading of unique assets,” says Kothari. .