This website stores cookies on your computer. These cookies are used to collect information about how you interact with our website and allow us to remember you. We use this information in order to improve and customize your browsing experience and for analytics and metrics about our visitors both on this website and other media. To find out more about the cookies we use, see our Privacy Policy

Agree & Close

MENU

AI

Blockchain

RPA
Blog
Dev Blog
White Papers
Resources
Videos
News

This article will help you gain more insight into Nested NFTs and how they will change the way NFTs work in the near future.

Ever since NFTs became famous, investors and developers have started looking for ways to redefine NFTs and what they can do. A nested NFT is one such advancement they made in the NFT space that allows one NFT to equip another NFT to change their output media. The applications of the Nested protocol can open up a broader DeFi world where DeFi is not just used by tech-savvy financial experts but also by ordinary people.

Let’s have a walk into some of the basics:

What are Nested NFTs?

A nested NFT is a new class of NFT where a single NFT can house a collection of digital assets such as social tokens, interest-bearing assets, liquidity provider tokens, other NFTs, etc.

Let’s explain nested NFTs with an example. Suppose an in-game character has a backpack containing some health potions. The character can use an NFT to hold this backpack, which holds the health potions. Similarly. he can also have an NFT that contains an armor set. This feature helps an artist launch NFT with a collection of his work, even including in-progress ones to be delivered at a later stage.

Similarly, artists can use them to distribute social tokens and other rewards too. This model of NFT brings more value to artists and creators. The areas where this model of NFTs can attract a much wider audience are financial tools, music, metaverse, and in-game assets.

Read More: What are Non-fungible tokens or NFTs?

How does it work?

Nested NFT allows users to build portfolios by gathering digital assets into unique non-fungible tokens. Once a nested NFT is created, the user receives the associated NFT directly into their wallet, which helps them control the assets kept in the related NFT. The holder of this NFT has its primary control, and no one else has the rights or control of the user’s tokens. It authorizes smart contracts to copy the moves of the trade. Thus, it helps in avoiding liquidity and regulatory issues. Whenever a step gets copied, the creator of the original nested version of the NFT earns the royalties. This NFT protocol allows the users to interact with DEXs, aggregators, and dApps through its modular architecture using a set of smart contracts. A contract called “Operator” can maximize the number of integrations, thus generating many opportunities for the users.

Read More: Top 10 Doubts And Questions On NFTs Answered

What are the possibilities of Nested NFTs?

Possibilities of Nested NFTs

Take a look at some of the unique possibilities that a nested NFT provides a business:

  1. Digital wealth inside an NFT: It helps us create a basket that can hold numerous digital assets that can be transferred between individuals, representing the ownership of the asset and their associated value.
  2. Manage all your digital wealth through one token: It helps you manage all or part of your holdings through simple portfolio management. It enables you to diversify and capitalize on opportunities in a few steps.
  3. Revenue sharing: This NFT model serves as a passive income model for the users. It can share part of the revenue with the original portfolio creator for each copied or followed step.
  4. Exit the market in one click: It enables users to sell all their positions in just one click. After which, all assets held within the nested NFT get sold, and the burning process of the NFT takes place, followed by sending the sales proceeding to the user’s wallet.
  5. Multiswap with the assets: Enables you to exchange different assets held in your NFTs with another one during a transaction.
  6. Social overview sharing: Helps the users to share their portfolios on social media to engage their communities.
  7. Maximum efficiency: The cost involved in creating an assets portfolio within this model of NFT is ten times cheaper than developing a scalable solution.

Read More: Where will NFTs pop up next?

Nested NFTs are a groundbreaking innovation in the crypto space, and these are some of the popular ones available in the market.

  • The Guild “The Golden Ox“

This NFT has some “Nested” surprises inside as there is BAYC# 8559, and it has .98 WETH. It also has 2000 IONX housed within its beautiful artwork.

  • Bars and Melody “The Golden Donut“

It holds some burnable tokens, redeemable items that we can use to fly anywhere to play a private concert, and includes $1000 of WBTC and $500 of IONX.

  • Book of Alchemy “The Forge of Raggeria“

The book of Alchemy weapons forges a nested NFT on polygon blockchain. It allows crafters to deposit the metals and runes into them to commission a custom-made NFT weapon.

Read More: Applications of NFTs in Digital Entertainment

Future of Nested NFTs

The use cases enabled by nested NFTs are boundless, and can you help bring the DeFi ecosystem together. While most people are concerned about the applications of the metaverse or the rise of AI, the future of NFT is full of possibilities. It is up to you to decide whether you want to explore these possibilities of NFT instead of just scratching the surface. 

Author

  • mm