# What are DNFTs

# NFTs

NFTs are digital assets that people can own on the blockchain, but “owning” an NFT has a very different connotation to owning normal crypto tokens. Unlike standard crypto tokens, each NFTs has its own individual underlying code which in turn makes each NFT unique to one another - even within the same collection. It’s this property of individual uniqueness (or non-fungibility) that gives NFTs a lot of their collector value.

# Non-Fungibility

To highlight what this looks like in practice:

My 1 USDT is exactly the same as your 1 USDT, which is the same as any 1 USDT in circulation everywhere. To function as a form of currency, every standard crypto token is designed to be 1:1 interchangeable with one another, or fungible. They all function the same, no matter which specific token you hold from within that cryptocurrency.

However, my 1 NFT is different from your 1 NFT even if they are from the same collection - each of which are also different (and identifiable) from any other NFT in the same collection. Every single NFT has its own unique individual code, which then translates to each NFT having its own unique individual traits.

# Traits

Oftentimes, these traits found in an NFT’s unique code are visually represented. Unlike normal crypto tokens, NFTs aren’t just strings of immutable code. On top of their code, NFTs have accompanying images. This can be a piece of digital art or a PFP (Profile Picture) character.

My Bored Ape with red hair is different from your Bored Ape with blue hair, which are unique among the collection of 10,000 Bored Apes - because every single ape has a unique mix of different traits, which is why they all look different from one another!

Although standard crypto tokens can confer a sense of ownership, they cannot confer a sense of identity because they lack traits. This unique visual layer is the primary reason that NFTs have become so popular in the mainstream in a way that normal crypto tokens have not. NFT traits allow NFTs to become collectibles by dictating their rarity, price and functionality.

Traits are what makes NFTs feel special because after all, owning an NFT usually means you’re holding a one-of-a-kind image. Contrary to popular belief, NFTs are more than jpegs you can screenshot, simply because the underlying code for each NFT is unique and cannot be duplicated. Screenshotting an NFT is taking an image without being able to use any of its coded functionality.

# Adoption

Prior to NFTs becoming popular, crypto was viewed as a playground for monetary experiments facilitated by emerging tech - not exactly relatable to a lot of people by a large margin.

However, everybody understands what a picture, character or a collectible is. Everyone also has their own unique sense of visual taste, which NFTs (with their traits) accommodate perfectly.

As a result of having unique (trait-driven) imagery, NFTs have become collectible, memeable, relatable and usable to a greater segment of the population. Fashion, Sports, Art and Design are some of the industries that have been able to adopt and find use-cases for NFTs because anything that is rare and collectible in the real world can theoretically now be represented by an NFT.

# The Problem

NFTs are unique and defining - but they are static. In practical terms, this means that normal NFTs usually can’t undergo a “change of traits”, or gain functionality over time because the metadata attached to them is fixed once they’re minted on a blockchain.

Use cases such as tokenizing real-world assets, building progression-based video games, or creating blockchain-based fantasy sports leagues often require data to be updated, but the static nature of NFTs have instead limited them to only being collectibles or fun profile pictures.

The net result of this permanence is that standard static NFTs started to lose value as investments due to being unable to gain new functionality. NFTs then became the poster-children for what are considered to be depreciating Web3 assets, or “bad long term holds”. This is oftentimes a reason why the NFT market is referred to as a bubble that has popped. After all - why hold something that can’t do anything new?

What if there was a solution that leveraged the uniqueness and collectibility of normal NFTs, but included in them a mechanism for gaining functionality and growth?

# DNFTs

Dynamic NFTs (DNFTs) are NFTs that each maintain their unique and non-fungible code while also having the ability to gain additional traits and functionality over time. The breakthrough that DNFTs bring is that they maintain the uniqueness in their code like traditional static NFTs, but are responsive to external events at the same time and are thus able to grow in functionality.

In other words, DNFTs still have their own unique underlying code that makes them special and identifiable, but their traits aren’t static. They can grow and evolve while still being unique, or non-fungible.

DNFTs are expanding the design space that NFTs are able to address through their ability to adapt and change in response to external events and data.

Imagine having a DNFT as a videogame character that can level up (and gain new functionality), or an architectural plan that can evolve to best fit the terrain on which the new structure can be built on.

If standard NFTs can represent anything that is static in the real world, DNFTs can represent anything that can evolve. The use-cases are essentially limitless!

Before we deep dive into how Cepheus uses DNFTs to reward its holders, we first need an overview of the protocol.

# Utilities

The Cepheus Platform leverages the Dynamic NFT technology to reward NFT holders in an automated way. It has never been so easy to earn rewards, just by holding an NFT.

But this isn’t an NFT that just changes cosmetically and only gives you rewards: each evolution of Cepheus dNFts unlocks more use-cases for you with every upcoming iteration.

Cepheus DNFTs are Yield-Bearing. All the DNFT holders will get daily rewards in $CEPH Tokens.

But in terms of rewards - $CEPH tokens aren’t all you get!

Cepheus is a Platform that other projects can build on top of. A portion of the tokens from all of these projects also flow into Cepheus DNFTs as secondary rewards, giving Cepheus DNFT holders a well-diversified basket of assets.

The properties change based on data pulled from on-chain actions in our platform. The following properties have influence on the value of each NFT:

# Overview