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Many NFT collectors move their claimed NFTs (NFTs that they won) from their web wallet (e.g. Metamask) to a different wallet that they call a vault wallet.

What is this vault wallet? Is it a hardware wallet? can NFTs even be moved from an NFT platform offline to a hardware wallet? Are there wallets specialized for NFT cold storage for ERC-721 tokens, rather than for coin and ERC-20 token storage?

What if the NFT platform built something into the smart contracts of their NFT token (the format on which all users' NFTs are minted on) that gives them secret access to revoke all NFTs on their network? are NFT platform-minted tokens susceptible to theft in any sort of way that is unique from the theft of coins and ERC-20 fungible tokens?

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NFTs are tied to the owners Ethereum address - however they do not actually 'live' on the address. The NFT contract just stores data that says "token #50 is owned by this address".

ERC-721 tokens use an approve function. This let's you grant permission to another address/contract to transfer tokens that you own. NFT platforms use this, allowing things like gas-free listings and auction bidding. Yes, there is an inherent risk in allowing this permission to stay enabled.

A 'vault' wallet would just be an ethereum address that has not set approvals for any tokens to be transfered by anyone else. This could be a hardware wallet or paper wallet generated offline to keep the private keys from ever being exposed.

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  • which vault wallet out there do u recommend. how can i tell that a wallet does not have the approve transfer function
    – user610620
    Commented Mar 15, 2021 at 10:22
  • Look into different methods of generating an ethereum public/private keypair, and how an address and wallet function differently. The approval is a function you call on a smart contract, so when you log in to a dapp with metamask, the wallet is just calling the contract for you since you have the wallet your private key, so it can sign the txs. A wallet could use an imported private key that was once a 'cold storage' address and start approving transfers or whatever
    – nick friskel
    Commented Mar 15, 2021 at 20:55

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