What are Dynamic NFTs and how will they bring more utility?

What are Dynamic NFTs and how will they bring more utility?

During the rise of the internet in the 90s, most of its initial applications centred around digitizing existing information. Physical maps were turned into digital maps. Hardcopy yellow pages were turned into digital directories on the web. In fact, one of the biggest entrepreneurs alive today started his career by opening a digital yellow pages company in 1995.

Elon Musks's Zip2: The Digital Yellow Page 

But as the internet advanced, Silicon Valley realized that the public could gain a lot more from the internet. Rather than transform hardcopies into soft copies, why not re-imagine communications by instantly connecting strangers from opposite sides of the world? Or why not decentralize ride-hailing by connecting private drivers with riders? Eventually, revolutionary apps like Facebook, Uber, and Youtube were born.

Cryptocurrencies and NFTs set out to re-imagine our interactions just like the internet did in the 2000s. Just as the internet's utility became more dynamic, NFTs are evolving to become dynamic to provide a broader range of applications for Web 3 projects.

Moving from Static NFTs to Dynamic NFTs

Dynamic NFTs can change their metadata, which refers to information that describes the underlying properties of an NFT. For example, the metadata of the Lazy Lions NFT below holds descriptors like body, eyes, mouth, etc. Each Lazy Lion is configured to hold different values for the descriptors, allowing the lions to look unique.

Lazy Lion NFT metadata

The Lazy Lion NFT is a static NFT because its metadata cannot be changed. Many of the older NFT collections like CryptoPunks and Bored Ape Yacht Club were deployed as static NFTs, causing the images to remain still and unchangeable.

Bored Ape and Cryptopunks: Static NFTs

But, what if these metadata can change based on external events? Then, the descriptor values of the NFT can change too, making the NFT more customizable for the holder. This is why dynamic NFTs (dNFTs) are the next generation of NFTs. Because their metadata is changeable, the application of dNFTs are more fun and interactive!

Example 1: Users can customize their Metaverse Fancy Bears
Example 2: The same Moody_Ghost NFT changes facial expressions based on chain data

dNFTs can respond to external data like time of the day or the current weather as well. The avatars of the novel-based game, Tales of Elatora, change their background based on the time of the day.

0:00
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Tales of Elatora avatar

Even the weapon that the avatar is carrying can change based on the player's weapons inventory!

Tales of Elatora weapons on OpenSea

Just like digital yellow pages are still useful today, static NFTs will still have a place in the NFT space. Static NFTs have accomplished the goal of achieving digital ownership. Dynamic NFTs will be the next generation of NFTs that will bring a higher quality of utility for upcoming projects.

Use cases of Dynamic NFTs

Even though dNFT is a fairly new concept, there are tons of projects already adopting them. From gaming to real estate, the application of dynamic NFTs is left to builders' imagination.

Let's explore some projects that are upcoming or can become a possibility with dNFTs.

Dynamic NFTs in gaming

Games record statistics of their players' performances to integrate social comparisons and competition to hook their players to the game.

Users love sharing their scores with others. The recent viral online game, Wordle, provided a fun score-sharing feature, motivating players to share their performance like frenzy on social media.

Players sharing their Wordle scores on Twitter

Imagine playing your favorite game and sharing your scores with others. With dynamic NFTs, not only is this possible but you can even take the sharing to the next level by selling your score.

The NFT-backed basketball strategy game, Swoops, is launching this June, where gamers train their NFT players and win competitions. Their dynamic NFTs are made to develop players so that the NFT properties like Perimeter Scoring, Consistency, and Durability increase over time, making the NFT more valuable.

Metadata of Swoops NFT player

The more developed the player, the higher the NFT value. Naturally, the game will create a Swoops trading cards marketplace, where users will trade cards for money.

Avid gamers almost froth over unlocking unique and rare weapons or inventory items. You can easily find hundreds of thousands of Halo 2 players actively indulge in YouTube tutorials showing how to unlock unique weapons like the hard-to-find weapon, Scarab.

High volume of traffic for tutorial on acquiring the Halo 2 Scarab 

As dNFTs provide the ability to unlock achievements like finding unique inventory items in games, the value of such NFTs will become precious for gamers. Just like rare Pokemon cards today can be traded for hundreds of thousand of dollars, dNFTs will create NFT hierarchies based on players' engagement and dedication to developing their avatars with the most skilled players owning high-value NFT assets.

The GameFi ecosystem will be supercharged with marketplace activity as dNFTs continue to make waves.

Dynamic NFTs in tokenizing real-world assets

NFTs store verifiable data, making them reliable source of truths. dNFTs can hold variable metadata for real world assets like houses, which can be useful in Real Estate.

When determining the value of a house, realtors have to consider factors like number of previous renovations, age, and sales history of the house. Today, owners may not have that data on-hand. Realtors often wind up turning to the town hall for the portfolio history of the house in order to verify the legitimacy of home owners' claims.

Using dNFTs, the metadata of the houses can be reliably updated as the status of the house changes.

House dNFT Metadata

Dynamic NFTs in job hunting and proof of contribution

Recording proof of participation in notable events or experiences are still a pain point today. The closest resemblance of a proof of participation are certificates, which come with their own problems: diploma fabrication is a billion dollar industry.

Instead, users can take advantage of dNFTs to show continuous development and a reliable, verifiable proof of participation.

As an example, the Banyan DAO is launching dynamic NFTs that incentivize and reward member contribution. According to its project manager, the NFT starts as a Banyan seed and its metadata updates as the members start participating by joining meetings, completing their first tasks, and eventually leveling up by becoming leaders, when the seed turns into a Banyan tree in its final stage.

Typically, in DAOs, new members have a difficult time matching the energy of other members with ongoing contributions. Such a dNFT incentivize new members to participate systematically by rewarding them at checkpoints.

The continuous recording of their accomplishment also allows contributors to showcase their NFT as a sophisticated proof of participation and accomplishment to help them earn more opportunities.

Another fun example is Rubber Duck Bath Party, which evolves users' duck NFTs every time they attend the Rubber Duck online party. The evolution of the duck NFTs symbolize participation in the community and incentivize users to engage and attend more parties in the future.

Evolution of the same Rubber Duck NFT after each party attendance

With dNFTs, on top of tracking participation, tracking continuous participation will provide incentive mechanisms for contributions and verifiable proofs of commitment.

The future of dynamic NFTs

Many NFT critics argue that NFTs are mere cash grabs that don't provide any significant value or utility to users. But with dynamic NFTs, the utility of NFTs are becoming more apparent.

We can expect more projects to use dynamic NFTs to spearhead exciting innovations and utility in the NFT space.


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Steakwallet is a next generation multi-chain self-custodial Web3 wallet on mobile. Our goal is to give users one place to manage all their assets across chains and make engaging with Web3 as easy as never before. To achieve this, Steakwallet brings critical functionality natively into the app where we abstract away backend complexity and add market leading user experience. This includes Steakwallet’s signature 3-tap staking flows, which make participating in securing blockchain networks and earning yield as simple as ordering an Uber or a pizza. With our Explore Screen, Steakwallet allows you to find all the right dApps on any chain. With one simple tap via WalletConnect, you can now easily bridge, swap, and ape into any yield opportunity right from your phone. And with multi-chain NFT support, you can collect all of your favorite NFTs in one place and even set them as your background for to easily flex your collection. Now this is what a Web 3 wallet should look like!

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