Explained | What are Nested Non-Fungible Tokens?

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Since their inception, Non-Fungible Tokens (NFTs) have found several use cases across various industries. They have been implemented in finance, art, music, games, the metaverse, sports, and most recently, even aviation.

Given their mainstream popularity and demand, developers are always trying to bring something new to the fore. This constant experimentation has led to yet another development in the NFT space -- it is called the Nested NFT.What are Nested NFTs?The concept of nesting is very similar to the famous Russian Matryoshka dolls.

These are a set of wooden dolls of varying sizes such that each doll fits inside a larger doll and the biggest one encompasses them all.Similarly, nested NFTs are digital assets embedded with other assets and tokens. The embedded assets could be liquidity tokens, social tokens, utility tokens, interest-bearing assets, etc.

Hence, a nested NFT is a basket of other assets.Nested NFTs can be traded like any other NFT on a marketplace, and their value is derived from all the other tokens, coins, NFTs, etc., that are encased within it.Also read: The Greater Fool: The man who bought Jack Dorsey’s first tweet and failed to sell it for $48 mnHow is nesting beneficial?AI and blockchain firm Accubits explains some use cases of nested NFTs so that their true potential can be better understood.Like a mutual fund consisting of multiple equity stocks, a nested NFT could consist of multiple tokens. This allows owners to manage a crypto portfolio through one single NFT.

When the nested NFT gets created, it is moved straight into the owner’s crypto wallet.In this case, smart contracts are employed to execute trades, and the parent NFT updates as and when new assets become a part of it. Other users can