You must have heard or read a lot about NFTs and the paradigm it is ushering in the digital space. The revenue-making opportunities, the identity is it giving to individuals and also the relevance it has given just about anything (collectibles)
What Are NFTs?
NFTs have been around since 2014, however, they are becoming increasingly popular and gaining notoriety. NFT market in 2021 alone was worth a staggering $41 billion, an amount that is approaching the total value of the entire global fine art market.
NFTs can be created by anybody, and require few or no coding skills to create. NFTs typically contain references to digital files such as photos, videos, and audio. NFTs differ from cryptocurrencies which are fungible because they are uniquely identifiable assets. The market value of an NFT is associated with the digital file it references.
What Are Dynamic/Living NFTs?
From what you know about NFTs and their non-fungible nature, You might think that this meant that they were unchanging and static. Well, there is a whole genre of Living NFTs. These non-fungible tokens, also known as dynamic NFTs or NFTs, can change and mutate in real-time according to the programming features encoded by their creators.
“A living NFT is all about dynamism—as opposed to a normal profile picture (PFP) project such as CryptoPunks, which remains static,” Alexander Guy, Head of Marketing & Growth at Zerion told Decrypt. “Living NFTs offer exciting ways for holders to link their behaviour and actions on a chain—and IRL—with the NFTs they collect.”
Dynamic NFTs vs Regular NFTs
Dynamic NFT’s metadata can change based on fluctuating conditions. Some of these conditions include the passage of time, interactions with other NFTs, and external data influence, including information drawn from sources that monitor real-world data, like weathervanes or real-time sports scores.
Living NFTs on the other hand explore all using Smart contracts to embed these factors within an NFT’s metadata. Let’s cite an instance, the hat sported by a PFP might change depending on the weather in France, or an expression on a sports star’s face might be contingent on the result of their most recent game. This is how living NFTs are structured.
Guy’s employer, DeFi portfolio manager Zerion, has launched its own dynamic NFTs using “Zerion DNA”, which changes based on data pulled from on-chain actions in Zerion’s web wallet. “Rarity, then, is a function not of random attributes, but real actions taken by holders,” says Guy.
Although each of Zerion’s living NFTs is rare, the company is just one of many to have launched dynamic NFTs.
Crossroad Art NFT
NFT artwork Crossroad created by digital artist Mike Winkelmann, aka Beeple was one of the first dynamics or living NFTs.
Crossroad was created in late 2020 during the build-up of the 2021 U.S. Presidential election, which saw Donald Trump the then President up against former vice president Joe Biden.
The NFT artwork Crossroad was designed to change its appearance based on the outcome of that contest.
If the former president, Donald Trump, pipped Joe Biden at the ballot box, Beeple could flip a switch and have the NFT display an animation of a bloated Trump corpse rotting in a park. And if Trump secured a second term, the NFT would permanently show a clip of Trump running through a hellscape, Godzilla-
However, if Joe Biden beat Donald Trump, something will reflect in the current state of Beeple’s NFT. But Beeple sold his NFT before that happened; his pitch to buyers was that although they had no idea which NFT they would eventually buy, it would codify a piece of history forever more. One buyer was inspired; after Beeple initially sold Crossroad for $66,000, it was subsequently resold for a then-record-breaking $6.6 million.
While it certainly raised eyebrows at the time, Beeple’s living NFT only hinted at the possibilities of NFTs that could change their state. Using programmable smart contracts, developers can program NFTs to autonomously update themselves based on anything they’re competent enough to code.
As I conclude, it is very important to note that living NFTs don’t need to live in a vacuum, it is affected by the passage of time which is the main thing that affects their mutation – they can even get data from a person’s real life. In 2021, Playground Studios launched LaMello Ball, a set of collectible NFTs for the 2021 NBA Rookie of the Year.
Chainlink will collect NFT points according to its performance data obtained from sports data feeds. A holder could choose to harvest ‘Silver Moons’ each time a Charlotte Hornets player helped net the ball, or ‘Blue Neptune’ whenever LaMelo stole the ball from an opponent. If the limits are met, the NFT avatar can be transformed.
The future of the living NFT seems inextricably linked to that from which it draws data. Of course, that also creates a potential point of failure, should a living NFT’s datapoint ceases to exist.