The concept of nested NFTs refers to NFTs being able to own other NFTs.
At its core, the principle is simple: the owner of an NFT does not have to be an externally owned account or a smart contract, it can also be a specific NFT.
The process of sending an NFT into another is functionally identical to sending to another user. The process of sending an NFT out of another NFT involves issuing a transaction from the address which owns the parent.
Some NFTs can be configured with special conditions for parent-child relationships. For example:
- some parent NFTs will allow the owner of a child NFT to withdraw that child at any time (e.g. virtual land containing an avatar)
- some parent NFTs will be prohibited from executing certain interactions on a child (e.g. the owner of a house in which someone else's avatar is a guest should not be able to BURN the guest... probably)
- some parent NFTs will have special withdrawal conditions, like a music NFT that accepts music stems. The stems can be removed by their owners until a certain number of co-composers upvote a stem enough, or until the owner of the parent music track seals and "publishes" it
The concept of nested NFTs is further expanded through the idea of equippability.
The implementations below lead directly to code. For examples of how to utilize them to mint your own NFTs, please refer to the sidebar section for each implementation subtype.