Dynamic NFT Becomes a New Market Hotspot, Sui Ecosystem Welcomes Development Opportunities

In the past two years, the NFT market has experienced ups and downs, and it seems to have entered a sluggish period, with the prices of various well-known projects continuing to decline. The main reason is that static NFTs, represented by PFP, have encountered a development bottleneck, and the market needs new narratives to expand the growth. Against this backdrop, dynamic NFTs have gained widespread attention as an emerging hotspot.

However, dynamic NFTs place higher demands on the underlying infrastructure. The emergence of the new public chain Sui has successfully broken through this barrier. Sui adopts the Move virtual machine and Move programming language to implement smart contracts, significantly lowering the threshold for creators to innovate with dynamic NFTs, thereby unleashing more diverse application scenarios and more engaging user experiences. Developers can achieve upgrade, bundling, and grouping functions for dynamic NFTs, and can generate real-time feedback on the chain based on changes in the behavior of the NFTs.

Nevertheless, dynamic NFTs still face liquidity issues in the early stages. To address this challenge, some projects have started to focus on providing liquidity solutions for NFTs on the Sui ecosystem. These projects have developed a diverse array of product matrices, including NFT AMM protocols, NFT lending, NFT fragmentation, NFT installment payments, and NFT/Token issuance platforms.

As the first one-stop scalable dynamic NFT liquidity application protocol in the Sui ecosystem, this type of project is committed to continuously exploring and leading the innovative direction of the cryptocurrency market. Through these platforms, users and developers can jointly tap into the immense potential of dynamic NFTs and benefit from the returns brought by liquidity.

NFT 2.0: Dynamic NFTs Become the New Trend in the Market

The NFT market in 2023 seems to be in a slump, with the floor prices of several well-known projects continuing to decline and overall buying sentiment being sluggish. Even though Bitcoin Ordinals inscriptions briefly attracted attention in March, they were unable to reverse the downturn of the NFT market.

At its core, NFTs lack a new narrative logic. From 2021 to 2023, various JPEGs or PFPs experienced a frenzy of speculation before their values returned to normal, and consumers gradually became more rational, no longer willing to pay for NFTs that lack practical value. Therefore, for NFTs to achieve growth in the next phase, they must enhance their practical value, such as using NFTs as tickets, membership identities, game items, or investment targets. The static NFTs of the first phase clearly cannot meet these needs, while the emerging dynamic NFTs have become the new focus of the market.

Dynamic NFT, abbreviated as dNFT(, is relative to static NFTs. Currently, most NFTs belong to "static NFTs". Once static NFTs are minted, they cannot be changed; their metadata) core attributes( are determined when the code is written and cannot be altered permanently. This characteristic is applicable to digital artworks such as videos, images, GIFs, and 3D models. Static NFTs are mainly used in fields like art projects, music photography, and sports competitions.

However, static NFTs have some limitations because their metadata is fixed and cannot be dynamically upgraded. Certain scenarios, such as tokenized assets in the real world and video games that require continuous updates, need to access data for constant updates. Static NFTs are difficult to meet these needs, while dynamic NFTs can effectively solve this problem.

Dynamic NFTs can change based on external conditions, and smart contracts will trigger updates to the dynamic NFT metadata. In addition to changing metadata, dynamic NFTs can also implement dynamic elements, such as minting NFTs when a specific condition ) is met, like discovering hidden locations in an AR application (. Dynamic NFTs can also trigger "hidden attributes" through user interactions, which were not originally present in the metadata.

Dynamic NFTs can be applied in the following areas:

1. On-chain NFT Passport: Dynamic NFTs can automatically update digital identity information, including residence, marital status, and contact details, without the need to replace digital identity documents.

2. Game: Players participate in P2E games using NFTs. The achievement data in the game, such as online duration, win rate, MVP, etc., ) will affect the status of the held NFTs in real-time. Game developers can upgrade players' NFTs based on this data or group them with other high-level players to enhance the gaming experience. In addition, feedback can be generated on-chain in real-time based on changes in NFT behavior, achieving open-ended game outcomes.

3. Virtual Real Estate: Dynamic NFTs can capture detailed information about real estate and possess the flexibility needed to update specific information. For example, holding a property NFT for a certain plot of land, the NFT will change with fluctuations in market prices, supply and demand, and other factors.

4. Dynamic Marketing for Brands: By utilizing dynamic NFTs, on-chain and off-chain data resources can be integrated to design dynamic marketing solutions that maximize benefits for brands, ultimately expanding business connections and enhancing product value.

Compared to static NFTs, dynamic NFTs are smarter and can adapt to and reflect changes in the external environment in real time. They can also set limitations and rules, further enriching the application scenarios of NFTs. The new round of development for NFTs has just begun, and dynamic NFTs are expected to inject new vitality into the NFT market, attracting more incremental users and continuously expanding the market scale.

Sui provides an innovative foundation for dynamic NFTs

Static NFTs do not possess inherent operational logic, and all empowerment is separate from the NFT entity. Their use is detached from the story and culture of the NFT itself. In contrast, dynamic NFTs possess inherent operational logic, and the empowerment they provide is endogenous and can be displayed directly. The development prospects of dynamic NFTs are undoubtedly promising, but they face significant technical challenges in practical implementation.

First of all, dynamic NFTs need to continuously modify or update metadata in the smart contract based on information sources, which places higher demands on basic hardware such as storage and transaction processing speed. Currently, static NFTs have developed best on Ethereum, mainly because they have lower requirements; however, the high Gas fees and inefficient processing capacity of ( TPS, which is only 15), make it difficult for Ethereum to develop dynamic NFTs, and other public chains face similar problems. The emergence of Sui fills the gap in the development of dynamic NFTs.

The smart contracts of Sui are written in the Move language. The Move language is a smart contract language that can be compiled and run in a blockchain environment that implements the MoveVM. It was designed with the security issues of blockchain and smart contracts in mind from the very beginning, and it references some security designs from the RUST language.

Unlike many existing programming languages, the Move language is designed to support programs that interact securely with untrusted code as well as static verification. The Move language has such security features because it eliminates all nonlinear logic based on flexibility considerations, does not support dynamic dispatch, and does not support recursive external calls, but instead uses concepts such as generics, global storage, and resources to realize some alternative programming patterns. For example, Move omits dynamic dispatch and recursive calling features, which can easily lead to costly reentrancy vulnerabilities in other smart contract languages.

Compared to other public chains, Sui can operate at an astonishing speed and scale, with a peak throughput of 297,000 TPS, and the key to its performance lies in transaction parallelization.

In most blockchains, transactions must be ordered and placed into blocks for sequential execution; sequential execution unnecessarily limits the throughput of these chains because most transactions are actually independent of each other. Sui requires explicit specification of transaction dependencies, allowing them to be processed in parallel. In the few cases where transactions are interrelated, Sui can still order and execute them sequentially. Since independent transactions can be validated in parallel, Sui can linearly increase throughput by adding more devices for each validating node, thereby achieving scalability.

Sui not only has high throughput but also low latency. Its consensus algorithm focuses on minimizing the communication required to process transactions between validating nodes; unlike the immediate broadcast of traditional blockchains, Sui ensures a two-way handshake between the requester and the approving validator, allowing simple transactions to be verified almost instantly, while complex transactions can also be executed within 2-3 seconds.

High throughput and low latency make it easy for transactions on Sui to be integrated into dynamic NFTs and other scenarios that require real-time completion, such as games.

In addition, most blockchains are account-centered in their storage, while Sui's storage is designed around objects. Each object is owned by an address, which is mutable by default, but can also be set to immutable or shared among multiple addresses. Sui's Move smart contracts can receive these objects as inputs, operate on them, and return the objects as outputs. This is a completely different smart contract programming paradigm compared to Solidity or Rust, being more expressive and simpler for the representation of digital objects in dynamic NFTs and crypto games.

By studying the code of MoveVM, we can clearly see that MoveVM separates the storage of data and the calling stack process logic (, which is the biggest difference from EVM. For example, in EVM, to implement an ERC20 token, it is necessary to write the logic in one contract and record the state of each user. In contrast, in MoveVM, the user state ) under the account address is stored independently, and program calls must comply with permissions and mandatory rules regarding resources. Although some flexibility is sacrificed, there has been a significant improvement in security and execution efficiency (, which aids in achieving concurrent execution ).

Dynamic NFT Liquidity Application Protocol in the Sui Ecosystem

With the official launch of the Sui mainnet on May 3, dynamic NFTs are expected to experience explosive growth, becoming the most eye-catching new trend in the crypto market. Of course, dynamic NFTs are just the first step, and various financial products surrounding dNFT, such as NFTFi(, are also essential. Especially for dNFT, liquidity is the primary issue that needs to be addressed.

Traditional static NFT markets ) like Opensea ( mainly use an order book matching system, where sellers place orders or buyers make bids. This model has a problem: when the prices negotiated by buyers and sellers are inconsistent, it can lead to two extreme situations where NFTs are priced but not traded, or traded but not priced; additionally, when multiple buy orders need to be purchased in batches, it incurs high Gas fees.

To solve the liquidity problem of dynamic NFTs, several projects focusing on providing liquidity solutions have emerged in the Sui ecosystem. These projects are usually winning entries from the Sui hackathon, have been launched on the mainnet, and feature one-stop aggregation trading for NFTs/Tokens.

Such projects typically launch multiple flagship products to meet market demands, including NFT AMM protocols, NFT lending, NFT fragmentation, NFT installment payments, and NFT/Token issuance platforms. Users do not need to switch back and forth between multiple applications in the Sui ecosystem; one Dapp can address all needs.

The NFT decentralized exchanges launched by these projects adopt the automated market maker )AMM( model. Liquidity providers )LP( can deposit assets into single-sided or double-sided trading pools to provide liquidity for their preferred NFTs and can choose to collect trading fees based on the buy-sell spread. Such exchanges typically do not distinguish between different NFT IDs, meaning every NFT in the liquidity pool is bound to the current price coefficient, and users receive the same price from the NFT pool during trading, regardless of whether the NFT ID is rare. Additionally, these platforms support one-click purchase and bulk purchase, effectively saving on Gas fees.

In addition to supporting NFT trading, these projects also support trading of Sui's native tokens and all tokens bridged to the Sui ecosystem through AMM. Compared to Uniswap V2, these platforms typically offer lower slippage, lower Gas fees, and a smoother user experience.

It is worth noting that compared to traditional NFT markets, these projects solve many problems by adopting the NFT AMM model. In the traditional market, the filtering functions of each NFT Collection vary, while these emerging platforms achieve a more flexible filtering function by calling the tags of each Collection contract, allowing users to more conveniently find NFTs that meet their needs.

In addition, these projects have launched an NFT lending market to unlock the value of dynamic NFT assets. NFT holders can mortgage their NFTs to obtain stablecoins or Sui tokens, from