Decoding The Potential Of Dynamic NFTs For Real-World

Isn’t it amazing that even a virtual asset possesses a huge value? - Yes, it is possible with the revolutionary concept of blockchain-based NFTs.

Non-Fungible Tokens (NFTs) are unique digital tokens representing the ownership of a physical or digital asset. It works using the concept of cryptography and has the support of blockchain technology. This creates a boom for NFTs in the fields like art, music, entertainment, gaming, metaverse, and so on.

Generally, most NFTs are static! It means they are permanently immutable and cannot be altered. On the other hand, Dynamic NFT is a type of NFT that can constantly change with external influences.

Now, it seems quite interesting… Let us learn more about dynamic NFTs and how to create them.

What is dynamic NFT? And why do we exactly need it?

Dynamic NFT is a token that can constantly change over time due to external conditions like on-chain and off-chain.

As we know already, blockchain has a secure ecosystem to perform data transfers because it does not have any connection with other systems. Thus, no interaction can happen between the blockchain and external data. This is the reason why the necessity for dynamic NFTs grew rapidly.

Token Standard of Dynamic NFTs

ERC 721 is the most widely used token standard for non-fungible tokens, whereas ERC 20 is for fungible tokens. Both of these tokens require separate contracts to be deployed every time for creating per token. This leads to the presence of redundant bytecodes and also curbs certain functionalities of the blockchain.

Dynamic NFTs use the ERC 1155 token standard that combines the characteristics of both ERC721 and ERC 20. Consequently, it helps the user to perform flexible operations using NFT.

Correlation between Chainlink and Dynamic NFTs

Chainlink helps developers to connect any blockchain with the data sources from other blockchains and real-world data. It is a decentralized global community with hundreds of thousands of participants. Chainlink enables an unbiased model for smart contracts. At present, their network secures billions of dollars in value for smart contracts across various industries like insurance, gaming ecosystems, Defi, etc.

Some Use Cases of Dynamic NFTs in Real-time

The incorporation of dynamic NFTs is increasing nowadays due to its enormous potential in providing flexible control over data. Check out these real-time use cases of dynamic NFTs in various sectors.

Gaming sector

Undoubtedly gaming has a leading position in the nft industry! To enhance the existing gaming experience, we can use dynamic NFTs in the following ways.

Rewards based on user performance

Depending on the performance of the player, the gaming platform will offer rewards like coins. These coins can be later used to purchase in-game assets like skin, character, weapons, etc.

Chainlink uses off-chain data to create NFTs for these in-game assets. If the opposing player wins a game, the respective NFT will get transferred to the competitor automatically. Now, the opponent player will become the new owner of the created NFT.

Real-world gaming experience

With the real-world data from Oracle, the gaming experience can be altered. It is because Chainlink allows NFT minting in real-world locations which alters the in-game conditions based on the external conditions.

Real-world Sports

Dynamic NFTs are applicable for real-world games too. For example, imagine that you have created a dynamic NFT for a cricket player. His performance will vary from match to match. In such a case, NFT uses Chainlink Oracle to automatically update the player performance stats.

Real Estate Valuation Updates

Along with the gaming industry, the implementation of dynamic NFT is gaining popularity in the real estate business too. For example, let us consider that you buy a real estate property and tokenize it. The cost of the property increases over time based on the present-day value of the property.

By using dynamic NFTs, the value of the real estate asset will get revamped automatically. This will help in easy property validation during the collateralization and trading processes.

Final Words

Every day new technologies are being developed and introduced in various industries to enhance the existing systems. Blockchain-based NFTs are one such resourceful technology that contributes a huge value in different business sectors.

They say, “Make hay while the sun shines”- Perhaps it is a good time to give this technology a try.

To acquire the best NFT development services, you can simply approach an expert blockchain service provider company. You are one step ahead of uplifting your existing performance.