Hedera Hashgraph Dynamic Non-Fungible Standard

This is a description of the work in progress for implementing Dynamic Non-Fungible Tokens (dNFT) on Hedera Hashgraph. The goal is to bring together new community consensus on token standards and new primitives within the ecosystem to ensure interoperability and reduce fragmentation between products.

All items below are subject to change, additional work needs to be conducted with regards to the decentralised trigger nature of dNFTs

Contents

1. What is a Dynamic Non-Fungible Token (dNFT)
2. How dNFTs work, combining services
3. The dNFT creation flow
4. The dNFT name specification
5. The HCS message JSON specific v0.1 (proposal)
6. Use Case: Marketing, Unibar.
7. Use Case: Carbon Capture, DOVU.
8. Conclusion

What is a Dynamic Non-Fungible Token (dNFT)

A dNFT is a new type of token which is presently unique to the hedera hashgraph ecosystem it's goal is to create a NFT where its concrete value increases over time. In short a dNFT is an NFT which can be linked to multiple sources of data, documents or image and can continuely be updated over time.

A holder of such a token has direct digital ownership or link to many kinds of media over time.

How dNFTs work, combining HTS+HCS services

A dNFT consists of a Hedera Token Service (HTS) token linked to a Hedera Consensus Service (HCS) topic through the Name property metadata, a portion of the Name will be comprised of the HCS Topic ID. The treasurer of the dNFT make link new media to a dNFT through adding additional messages to the linked HCS topic.

The dNFT creation flow

Below is a brief walkthrough of how a dNFT is formed and maintained, both the HTS and HCS metadata elements need to be immutable,

1. The "minter" account creates a HCS topic. The adminKey must not be set.
2. The "minter" account creates a HTS token. The adminKey, wipeKey, freezeKey must not be set.
3. The "name" of the token should confirm to the format specification below.
4. New messages that are sent to the HCS topic are linked with a piece of media which should be hosted on a decentralised file service, such as IPFS.

For testing S3 is fine, but all links to media should be accessible through HCS messages, permanently. Pinata is an option we are currently evaluating.

The dNFT name format specification

This is the proposed dNFT name format, within 100 bytes.

• The Topic Id of the HCS topic
• The Account ID of the minter account
• The Symbol of the proposed token
• Optional metadata to describe the dNFT

Here is the proposed struture

'DNFT:{symbol}_{metadata}:{topic_id}:{account_id}'

With an example for Unibar designs

'DNFT:UNIBAR_DESIGNS:0.0.22222222:0.0.123456789'

The HCS message JSON specific v0.1 (proposal)

This is a very early example of the structure of each HCS message, that the dNFT is linked to. The meta can be removed or omitted entirely.

{
    "name", // Name of the content
    "description", // Description of the content
    "hosting_source", // S3, IPFS, Pinata
    "url" // The url of the hosted content
    "meta" : { 
        "tags: [ "" ], // optional
        "related_link" // optional
    }
}

Use Case: Marketing, Unibar.

Unibar a hedera 21 hackathon project, used dNFTs as a mechanism for a lead magnet to augment their social media strategy.

The first dNFT that will be released will be Unibar Sketch Designs and will/were airdropped to all mailing list sign ups as a lead magnet before the 02/03/2021.

Use Case: Carbon Capture, DOVU.

DOVU is using dNFTs as a tool for land owners and farmers to sell the carbon in their soil, to gain an additional source of income. dNFTs will provide a mechanism to ensure that farmers can continually audit their land over time with proven evidence of documentation, logs, photos and professional audits.

Conclusion

dNFTs provide a tool for licensing, social good and martech.

When scheduled transactions are available from Hedera, dNFTs will offer decentralised triggers to incentivize stakeholders through the combination of HTS and HCS services.