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Finally, NFTs with Utility

Updated: Jul 6, 2023

What's a Dynamic NFT (dNFT)?

A dynamic NFT (dNFT) is like a special kind of Non-Fungible Token (NFT) that has superpowers. It's not just a regular digital collectible, but it also has smart contract magic that allows it to change its appearance or behavior based on what's happening in the real world.

NFTs have been getting a lot of attention lately, with everyone from famous athletes to your favorite celebrities jumping on the bandwagon. These unique digital assets have become the poster child for blockchain technology. But now, new technology provided by companies like Chainlink and Enjin help developers create NFTs with utility- dNFTs that tap into off-chain data and computation. These babies can adapt and respond to external events and data, opening up a whole new world of possibilities.

NFT meme

First, What’s a Non-Fungible Token

So, let's break it down. Non-fungible tokens (NFTs) are basically one-of-a-kind digital objects that live on a blockchain. Each NFT has a unique token ID and contract address, making it different from any other tokens out there. You can attach all sorts of cool stuff to an NFT, like images, videos, or other data, which means you can actually own a token that represents a truly unique digital item.

Right now, the most popular use case for NFTs is digital art. Artists create a token that represents their artwork, and collectors can buy these tokens to show off their ownership. Once an NFT is minted, its token ID stays the same. But here's where dNFTs come in. They have the ability to change over time based on external factors. Imagine an NFT that updates its appearance when your favorite sports team wins a game or an NFT that reacts to the weather outside. But what no one is yet talking about, are the new opportunities dNFTs provide for real world interactive fiction like alternate reality games.

dNFTs and the Alternate Reality Game (ARG)

Dynamic elements besides metadata changes can also exist. For example, dynamic NFTs can be minted based on certain conditions, such as when a hidden location or item is found in an augmented reality game. Locations and items are powerful storytelling tools. Let’s go old school to explain. First a short excerpt of a story told chronologically.

Frodo climbed the tree hoping to catch sight of Mount Doom. Alas the forest stretched as far as the eye could see. Just when he lost hope, he noticed a single egg, abandoned in a nest. Was this a legendary Eagle Eye Egg?

Text Based Adventure Games Sparked an Idea

Let’s retell the story as an 80s text based adventure. These games were a phenomenon without using a single pixel. They had simple tasks with simple commands. You might, ‘climb tree’, to find an abandoned nest with an egg. You might, ‘take egg’. You could combine items from your inventory to form new items. ‘Combine matches and wood,’ might create fire. Combining fire and the egg creates a new item, a cooked egg. “Eat cooked egg” might give you enhanced vision thus unlocking a new area of a map.

Some might prefer reading this story chronologically, just as there are some that prefer the book to the movie. But there’s a large group that prefers to use their wit and wisdom to weave together items and locations to assemble the story. A puzzle is a conversation, a secret language, between player and game designer.

Start by Breaking the Vase

Christopher Nolan’s film, Memento, the award winning video game Her Story and the old school text based adventure all have one thing in common. They all told great, non-linear stories. Fan theory YouTube channels for shows like Yellow Jackets and Severance rack up as many views as the shows themselves. Viewers want to play. They want to be archeologists in search of the shards that construct the priceless vase. Storytellers like Nolen reverse engineer their stories, they take the vase, smash it and scatter the pieces.

You are in search of one of these shards. A riddle you solved leads to a statue of Christopher Columbus in a public park. There, augmented reality technology reveals a shard next to his foot. You take it. You now own a dynamic NFT. Valuable to other players, you could sell it. But you decide to hold on to it and combine it with other shards. You form a team. Your team finds all the shards and now you collectively own a vase. The updated metadata reveals that there is a quantity of ENJ coin within the dNFT. You could sell it. But wait. The design on this vase. Is it a map?

In The Internet of Things, Digital Things Are Real Things

In a previous post on the death of the VR Metaverse we saw how Niantic is connecting real world locations with its visual positioning system. They’re opening their detailed 3D map to designers and allowing them to add digital items. They call it the Real World Metaverse. Imagine the possibilities if these items were dNFTs. Now imagine the dNFTs had utility in the real world, a real world populated by the Internet of Things. That in-game digital key can unlock the smart lock of the real world treasure chest. The magic lamp triggers a smart socket, turning on a light with a blacklight bulb. Suddenly the psychedelic art painted in blacklight colors appears. It won’t be long before a digital car key could summon a self-driving Uber with pre-programmed directions.

Infographic showing how dynamic non fungible tokens (dNFTs) can have utility and operability to use in alternate reality games (ARGs)
Chainlink updates dNFTs with off-chain data like sports stats, election results and even the weather.

Chainlink is a decentralized blockchain oracle network built on Ethereum. The network is intended to be used to facilitate the transfer of tamper-proof data from off-chain sources to on-chain smart contracts.

The Best Tool to Scale the Alternate Reality Game are NFTs with Utility

Tools provided by Enjin for example, allow developers to build in-game items integrated with the ERC-1155 token standard. This allows NFTs to be programmed to evolve, perhaps into a map telling more of the story and unlocking extended gameplay. Or it could be updated with off-chain information like the results of a team vote. As a storytelling mechanism it could require two players in the real world coming together to combine items or information. In a detective story one player might have knowledge of the murder weapon and the other might have the murderer.

Enjin also provides the platform for players to own and trade their in-game items. I’ll trade your the murder weapon information for a profile of the murderer. As the boundaries between the virtual and physical worlds blur, NFTs with utility, have the potential to revolutionize how we engage with games and explore the world around us.

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