Dynamic NFTs – The next big thing?

The innovation in the NFT space has been at a standstill for a while, with a few exceptions. Most projects have followed previous successful utility roadmaps or strategies. They try to copy what other successful projects did in the past and hope for the same results. While the NFT hype was at its peak, this worked quite well. But now that the market conditions are less forgiving, things need to and will change. Soon most founders will realize that they need to present something unique to gain attention and be able to raise funds. We believe that, eventually, most will start experimenting with Dynamic NFTs.

What are Dynamic NFTs?

A Dynamic NFT, commonly known as dNFT, is a type of NFT that can change some of its inherent properties based on external conditions. These changes are recorded and added to the metadata of the NFT. Smart contracts, triggered by data from oracles and other on-chain and off-chain events, cause the changes to occur in Dynamic NFTs.

How does it work?

Dynamic NFTs primarily use Ethereum’s ERC1155 token as of this writing. But other blockchains are developing similar token proposals.

dNFT smart contracts provide instructions on how the dNFT’s metadata should be changed given a triggered event based on external data through an oracle or an on-chain event.

A base NFT is first created, after which smart contracts that govern updates, unlocking hidden traits or features, and image enhancements are put into place. These changes are conditional and only happen when a smart contract is triggered. Each smart contract can be triggered by events that can be on or off-chain, as well as time, price or location-based events.

  1. A request is first initiated to a smart contract for a NFT
  2. The smart contract receives the request and begins processing
  3. The smart contract makes a call for on-chain data and processes the results.
  4. The contract uses an oracle to make a call for off-chain data and processes the results.
  5. Both the off and on-chain data are evaluated. Then, the smart-contact returns media one or two to the requestor.

Dynamic NFT use cases

Several use cases for Dynamic NFTs are yet to be explored. But below are a few examples.

  • In-game character progression. NFTs, update or upgrade with new traits based on the holder’s progress through the progress of some form of gamified event.
  • An in-game item can become upgraded when a character performs specific actions. The action triggers the upgrade.
  • Generative art is where various traits can change or evolve based on external conditions.
  • Car service books could be replaced with a Dynamic NFT. The action of performing a service triggers the smart contract.
  • Tokenized real estate where changing metrics of the underlying asset can be updated and represented on its NFT. Image and example courtesy of Chainlink.
dNFT Houses Diagram V1
The metadata of dNFTs representing property can change to reflect maintenance history, past sales, and more.


Dynamic NFTs are living tokens that can change and evolve. Dynamic NFTs are an important innovation. They enable an extensive range of use cases and enhance the capabilities of the Web3 environment. Dynamic NFTs will be an essential tool for bringing the natural and digital world closer. We believe the blockchain industry will see much more innovation in the Dynamic NFT space next year.

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