The dynamic NFT market has broad prospects, and opportunities in the Sui ecosystem are emerging.

After two years of explosive growth, the NFT market has entered a period of adjustment, with blue-chip project prices continuously declining. The reason for this is that the growth of static NFTs, primarily PFPs, has encountered bottlenecks, and the market needs a new narrative to expand. In this context, dynamic NFTs have become a new hotspot in the market, with high expectations placed upon them.

However, dynamic NFTs have higher requirements for underlying infrastructure. The emergence of the new public chain Sui provides a solution for this. Sui implements smart contracts using the Move virtual machine and Move programming language, lowering the barrier for creators to innovate through dynamic NFTs, thus unlocking more types of application scenarios and more engaging experiences. Developers can implement upgrades, bundling, and grouping of dynamic NFTs, and generate real-time feedback on the chain based on changes in NFT behavior.

Like static NFTs, dynamic NFTs also face liquidity challenges in their early stages. To address this issue, several innovative projects have emerged, dedicated to providing liquidity solutions for NFTs on the Sui ecosystem. These projects have developed a rich product matrix, including NFT AMM protocols, NFT lending, NFT fractionalization, NFT installment payments, and NFT/Token issuance platforms, among others.

As an innovative project on Sui, these one-stop scalable dynamic NFT liquidity application protocols continuously explore and lead the innovative direction of the crypto market. Through these platforms, users and developers can jointly explore the infinite potential of dynamic NFTs and enjoy the dividends brought by liquidity.

NFT2.0: Dynamic NFTs Become the New Trend in the Market

In 2023, the NFT market entered a period of adjustment, with the prices of several blue-chip projects continuing to decline and overall purchasing sentiment remaining sluggish. Although Bitcoin Ordinals inscriptions and other projects briefly attracted attention in March, they failed to reverse the downturn in the NFT market.

At its core, the NFT lacks a new narrative logic. In the first phase of the market (2021-2023), JPEG or PFP type NFTs reached a peak due to rampant speculation, and their value gradually returned, with consumers becoming more rational and finding it difficult to pay high prices for NFTs that lack practical value. Therefore, to expand incrementally in the second phase of NFTs, it is necessary to enhance their practical value, such as NFTs serving as tickets, memberships, identities, game items, investment targets, etc. The static NFTs from the first phase are difficult to meet these demands, leading to emerging dynamic NFTs receiving considerable attention and becoming a new market hotspot.

Dynamic NFT (Dynamic NFT, abbreviated as dNFT) is in contrast to static NFT. Most NFTs are "static NFTs", which cannot be changed once minted. The metadata (core attributes) of static NFTs is fixed and permanently immutable at the time of coding, a feature suitable for digital artworks such as videos, images, GIFs, and 3D models. Currently, static NFTs are mainly applied in fields such as art projects, music photography, and sports competitions.

However, static NFTs have some limitations due to their fixed metadata and inability to be dynamically upgraded. In certain scenarios, such as tokenized assets in the real world and video games that require continuous data updates, static NFTs struggle to meet the demand, whereas dynamic NFTs can effectively address this issue.

Dynamic NFTs can change based on external conditions, and smart contracts trigger updates to the dynamic NFT metadata. In addition to changing metadata, dynamic NFTs can also implement dynamic elements, such as minting based on specific conditions (for example, when 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: can automatically update digital identity information such as residence, marital status, and contact information, without the need to replace digital identity documents.

2. Game: Players use NFTs to participate in P2E games, and 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 advanced players to enhance the gaming experience. Open-ended game endings (self-selected game endings) can also be realized.

3. Virtual Real Estate: Dynamic NFTs can capture property details and have the flexibility required for specific information updates. For example, holding a property NFT for a particular plot of land, that NFT will change according to market prices, supply and demand, and other factors.

4. Dynamic Brand Marketing: Utilize dynamic NFTs, combining on-chain and off-chain data resources, to design dynamic marketing solutions that maximize brand benefits, expand business links, and enhance product value.

Compared to static NFTs, dynamic NFTs are more intelligent, able to adapt to and reflect the conditions of the external world in real time, and can also set limits and rules, further enriching the application scenarios of NFTs. The new round of development in the NFT market has just begun, and dynamic NFTs are expected to inject fresh blood into it, bringing in more incremental growth and continuously expanding the market size.

Sui Provides an Innovative Foundation for Dynamic NFTs

Static NFTs do not possess inherent operating logic; their empowerment is separate from the NFT subject, and their use is disconnected from the story and culture of the NFT itself. In contrast, dynamic NFTs have inherent operating logic, with the empowerment they provide being endogenous and directly displayable. Although dynamic NFTs have broad development prospects, they face significant technical challenges in practical applications.

First, dynamic NFTs need to continuously modify or update metadata in smart contracts based on information sources, which places high demands on fundamental hardware such as storage and transaction processing speed. Currently, static NFTs have developed best on Ethereum, primarily due to lower requirements for these aspects. However, the high Gas fees and inefficient processing capacity of Ethereum (with a TPS of only 15) make it difficult to develop dynamic NFTs, and other public chains face similar issues. The emergence of Sui has filled the gap in the development of dynamic NFTs.

Sui's smart contracts are written in the Move language. The Move language is a smart contract language that can be compiled and run in the blockchain environment where MoveVM is implemented. IT WAS BORN WITH BLOCKCHAIN AND SMART CONTRACTS IN MIND, AND BORROWED SOME SECURITY DESIGNS FROM THE RUST LANGUAGE.

The design of the Move language supports writing programs that interact securely with untrusted code, as well as static verification. To achieve these security features, Move abandons all non-linear logic based on flexibility considerations, does not support dynamic dispatch and recursive external calls, and instead uses concepts such as generics, global storage, and resources to implement alternative programming patterns. For example, Move omits dynamic dispatch and recursive call features, which may lead to expensive reentrancy vulnerabilities in other smart contract languages.

Compared to other public chains, Sui's operating speed and scale are astonishing, with a peak throughput of 297,000 TPS. Its performance advantage mainly comes from transaction parallelization.

Most blockchains require transactions to be ordered and executed sequentially in blocks, and this sequential execution unnecessarily limits throughput because most transactions are actually independent of each other. Sui requires explicit specification of transaction dependencies, thus enabling parallel processing of independent transactions. For the few interrelated transactions, Sui can still order and execute them sequentially. Since independent transactions can be validated in parallel, Sui can linearly increase throughput by adding devices for each validating node, thus achieving scalability.

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

High throughput and low latency allow transactions on Sui to be easily integrated into dynamic NFT scenarios and other applications that require real-time completion, such as games.

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

By studying the code of MoveVM, we can clearly see that MoveVM separates data storage from the storage of the call stack (process logic), which is the biggest difference from EVM. For example, in EVM, to implement an ERC20 Token, the logic needs to be written in one contract and the state of each user must be recorded. In MoveVM, user states (resources under account addresses) are stored independently, and program calls must comply with authorization and mandatory rules regarding resources. Although some flexibility is sacrificed, there is a significant improvement in security and execution efficiency (which helps achieve concurrent execution).

Innovative Project: Scalable Dynamic NFT Liquidity Application Protocol Based on Sui

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

Traditional static NFT markets (such as Opensea) typically use an order book matching mechanism where sellers place orders or buyers make offers. This model has a problem: sometimes the prices between buyers and sellers cannot reach an agreement, which may lead to extreme situations where NFTs have a price but no market, or a market but no price. Moreover, when multiple buy orders need to be purchased in batches, it can incur high Gas fees.

To solve the liquidity problem of dynamic NFTs, some innovative projects have emerged. These projects are among the first scalable dynamic NFT liquidity application protocols in the Sui ecosystem, focusing on one-stop aggregated trading of NFTs and Tokens.

Specifically, these projects have launched 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 navigate through multiple applications in the Sui ecosystem; a single Dapp can address all needs, equivalent to a combination of Uniswap + BenDAO + Opensea + Blur + Launchpad.

The NFT decentralized exchanges launched by these projects adopt an automated market maker (AMM) model. Liquidity providers (LP) can deposit assets into single-sided or dual-sided trading pools to provide liquidity for their preferred NFTs, and they can choose to earn trading fees from the bid-ask spread. These platforms do not distinguish between different NFT IDs, meaning that each NFT in the liquidity pool is bound to the current price coefficient, and users receive the same price when trading from the NFT pool, regardless of whether the NFT ID is rare. Additionally, these platforms support one-click purchases and bulk purchases, effectively saving on gas fees.

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

It is noteworthy that compared to traditional NFT markets, these projects address many issues by adopting the NFT AMM model. In traditional markets, the filtering functions for each NFT series differ, while these new platforms achieve more flexible filtering functions by calling the tags of each series contract, allowing users to more easily find NFTs that meet their needs.

These projects have also launched an NFT lending market to unlock the value of dynamic NFT assets. NFT holders can collateralize their NFTs to obtain stablecoins or Sui tokens, thereby alleviating cash flow pressure. The peer-to-pool matching lending system connects borrowers and lenders through liquidity pools and implements a robust liquidation system to ensure the security of lent NFTs and protect the interests of lenders.

In addition, these platforms also provide NFT installment payment functionality through a peer-to-pool trading system. Users can purchase their desired NFTs through installment payments without the need to pay the full price upfront, thus allowing NFTs to be