What if digital products could evolve?
If you’re familiar with “NFTs”, then you may know that often times they are static digital products with set metadata. Or, put simply, what you buy is what you get — it doesn’t change overtime. While these can have additional utility (redemption, loyalty, access, etc.) beyond the image and data, the actual media and data do not change.
Enter dynamic tokens:
Tokens that can update/mutate over time to become something new, based on data inputted from pre-defined factors.
Let’s make it real.
Imagine you buy a static token of a digital collectible from your favorite wine company. For example purposes, let’s say the digital merchandise is a picture of a famous vintage of wine. Let’s add that the token is redeemable for a physical bottle of the vintage. This is a static token (what most “NFTs” are today).
Now, imagine you buy a dynamic token of a digital collectible from your favorite wine company. For example purposes, let’s also say the digital merchandise is a picture of a famous vintage of wine. Let’s also add that the token is redeemable for a physical bottle of the vintage. But now, let’s add one more condition — when you redeem it, the image of your token now empties the bottle of wine. Every time you buy a new bottle (for the next three times let’s say), the image of your token fills up by 1/3. Once it’s full, you are able to redeem it again for another physical bottle of the vintage.
Do you see what that has done?
The user is engaged in a more continuous manner. By making the token dynamic, it encourages the participant to continue to engage with the brand, by purchasing more in order to earn more. It’s also a fun way to gamify the experience with the brand and create a longer product lifecycle.
Dynamic tokens enable you to create new forms of long-tail engagement with your consumers. These can be applied to a variety of use cases, including sporting fan tokens, generative art, video game assets, community loyalty, and more!
Let’s make it even more real — here are some examples that actually exist across a few different categories:
- CROSSROAD by BEEPLE: an example of digital art that updated based on the outcome of an external event (in this case, the US 2020 election)
- LaMelo Ball Fan Tokens: an example of an athlete releasing dynamic tokens that update based on his in-real-life game performance
- Regenerative Resources Media NFTs: announced a project for short films, where every time the token was bought, another video frame was added to the token — eventually showing the entire film after X number of sales
While not every use case will dictate the need for dynamic tokens, there is potential to create new product experiences and increase per product engagement with the brand. Keep a look out as this area evolves!
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