Despite being considered just hype by some, the non-fungible tokens (NFTs) have disrupted the entire web3 industry and generated billions of sales in no time. Many big brands such as Adidas, Nike, Gucci, and Louis Vuitton are being a part of this paradigm shift and creating multiple revenue channels for themselves. However, the regular NFTs (ERC-721 standard) are monotonous and lack in providing real-life utilities. In contrast, dynamic NFTs are the new norm now due to their dynamic nature and increased use cases.
Keep reading to know more about Dynamic NFTs and how you can open numerous revenue streams with them.
What are Dynamic NFTs?
Dynamic NFTs are the next iteration of the ERC-721 standard, aka static NFTs. They come with better utility and inherit dynamic properties that it achieves with the help of smart contracts and oracles. Unlike a regular NFT, the dNFTs are capable of changing their characteristics whenever a pre-determined condition is met. For example, you can code your dNFT and program it to display snowy weather whenever it hits the real world.
How do dynamic NFTs open web3 business opportunities in the metaverse?
Dynamic NFTs open up a lot of business opportunities for brands and creators. Let’s have a look at some of the ways how it makes it possible:
Sports
Sports is one of the most sought-after sectors, and the reason behind it is simple— athletes. They possess a massive following among people, and as a result, their fans are always looking to get hands-on with their exclusive items or collectibles. Many brands are already partnering with athletes or sports institutions to build dynamic NFTs that allow users to engage with their favorite stars in a unique way.
One good example of this is the recent partnership between FIFA and Altered State Machine (ASM). They launched a metaverse-focused soccer game called AI League, where users can predict FIFA World Cup matches and compete against each other to win exciting perks. ASM uses NFTs and AI technology to infuse dynamic elements into their NFTs (gaming characters), making them more engaging.
Collectibles
Dynamic NFTs radically change the way how we used to collect rare items in the form of static NFTs. A recent partnership between the global sports league giant NBA and NBPA launched an initiative called The Association NFT, which comprises dynamic NFT collectibles that change over time based on athletes' in-game performance.
More than that, dynamic NFTs can also provide the holders extra perks whenever a player hits a certain performance level in the game. For example, if an athlete gets crowned as the “rookie of the year,” then their dNFT holders may get their signed merchandise or any other exciting rewards you could think of.
Tokenizing Real-World Assets
Certifications or documents like passports, driving licenses, etc., are a great way to verify someone's credentials. However, the fact that they can easily be counterfeited and are difficult to verify makes it challenging for students, employees, and everyone who owns them. With dynamic NFTs, they can be stored on blockchain technology (which is immutable) and will react as per your performance.
Another interesting real-life example can be the real-estate sector, where the dynamic NFT represents a real-world property and reflects metrics such as maintenance history, market value, age, past sales, and much more.
Credits: Chainlink
How can Dynamic NFT Builders/Creators Monetize Their Creations?
The ERC-1155 standard is already becoming widespread and adopted by the masses. Therefore, if you’re a dNFT builder/creator looking to monetize your creations, then follow the steps below to generate a windfall of money with your NFTs:
Royalties
At present, static NFTs or the ERC-721 is the most minted standard on the Ethereum chain. However, with static NFTs, the original creators lost out on gaining recurring revenue from their creations whenever they get sold, let’s say, for the 3rd, 4th, or 5th time. Dynamic NFTs, on the other hand, change this as their smart contract can be coded as per the creator’s requirements. For instance, you can code your dNFT to get a 10% share every time it gets sold on a secondary marketplace and enjoy persistent revenue.
Brand Deals & Sponsorships
Collaborating with brands and seeking sponsorships is another best way to monetize your creations. You can reach out to different brands to see if they’d be up for a partnership with you if you’re just starting out. However, attracting brand deals is a breeze if you’re already a prominent player in the industry.
For example, the Bored Ape Yacht Creators, Yuga Labs, bagged a collab with Adidas as their creations were highly admired and praised among NFT enthusiasts.
In Closing
Dynamic NFTs are the next frontier of the non-fungible tokens, where the possibilities and use cases it provides to everyone - from builders to brands to holders - are limitless. It is indeed the revolution needed in the web3 space that will have a colossal impact on the overall industry - and why not, as it opens a pool of revenue streams for brands and creators as well. If you’re wondering how you can build a dynamic NFT, then simply head to our website and try our free simulator that allows changing the properties, images, and automating your NFTs with ease.
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