Pandora Protocol: A Concise Guide to Dynamic NFTs

The crypto world has seen an immense surge in the use of non-fungible tokens (NFTs). While NFTs are making headlines everywhere for revolutionising asset trading, they are also constantly evolving. This is where dynamic NFTs come in. Let us find out what dynamic NFTs are and how they function.

A Brief overview of NFTs

Non Fungible Tokens or NFTs are cryptographically secured tokens that represent an asset. They typically exist on blockchains. In simpler words, NFTs are digital tokens that represent unique assets and facilitate ownership tracking and trade of these assets. These assets could be digital, or they could represent real-world items. For instance, NFTs of digital art can be bought or traded on crypto platforms.

How are NFTs made dynamic?

The previously mentioned connectivity problem of NFTs is resolved with ‘Oracles’ that allow NFTs to interact with external data. Oracles are essentially data feeds from external systems that allow smart contracts to receive information from outside the blockchain.

Role of Oracles and Dynamic NFTs

With oracle, developers can connect any blockchain with data sources from other chains and real-world data securely and reliably. It is essentially a decentralised oracle network.

How does oracle actually make NFTs Dynamic?

With oracle, developers can securely link their NFTs to IoT (Internet of Things) data, web applications and several other data sources. These connections can be used to create dynamic NFTs that interact with data and integrate with existing infrastructure.

The scope of Dynamic Tokens: How are Dynamic NFTs currently minted?

Several use-cases are accessible to users for the minting of dynamic NFTs. Oracles can connect NFTs to the data that is required for various functions. Let us take a look at some ways dynamic NFTs are used to understand their benefits better

  • Performance games: Inside certain games, NFTs are transferred between players based on their performance. Players compete in games and win or lose in-game NFTs. When an item is lost, it is randomly placed in the game environment. Oracle is also used to retrieve off-chain performance data and link it to the smart contract that can transfer ownership of items
  • Real-world augmentation: Oracle can also allow NFTs to be minted in real-world locations where users can complete for them in real-life. One can think of this as something similar to Pokemon GO’s popular game where the game interface provided a real-world experience.
  • Reward and Governance Systems: Certain projects are being worked upon where users on the chain can be rewarded with NFTs upon completion of real-world activities or other achievements. Some instances of this are:

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Blockchain Engineer | Distributed system | Ex- Red Hat | Ethereum foundation grantee