We use static NAT for servers in a LAN. But using dynamic NAT doesn't have any effect, then why is it a standard? Is it because of the overhead faced by the server, to map each connection/request to it's local ip and vice-versa. Please help.
I think you're confused about the usual uses of static- and dynamic NAT.
Static is used on the outside router/firewall to expose a server/service located inward which wouldn't normally be reachable from the outside. (static: nailed in place, permanently mapped inward.)
Dynamic is used to enable inward transportation of return traffic for outgoing connections; so a web browser on a system with a private IP is dynamically mapped to a public address as the packets egress, and then the return traffic is mapped back for ingress. (dynamic: the inside end points change so the mappings are changing too.)