Apple Store Allows NFT Sales; Takes Its Slice Of The Pie – Fin Tech

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As part of its new guidelines for the App Store, Apple has
announced that it will allow developers to sell NFTs within apps
and games. Despite the limitations and fees Apple attaches to
certain types of NFT, this is a big deal because, as DigiDaigaku
NFT project founder Gabriel Leydon tweeted, “…this could put an ETH wallet
in every single mobile game onboarding 1B+ players!”

Apple’s New NFT Policy

Users can now sell and trade NFTs through a number of apps
available on the Apple App Store. Apps that store or display NFTs
may have been breaking Apple’s rules before this decision. In
September 2021, Gnosis Safe, a crypto wallet that helps users
manage and even sell digital assets on Ethereum, had been offering
its app in the store for several months when it received notice
from Apple that “Apps that access, whether it is just simple
storage or marketplace, are not appropriate for the App Store. We
suggest you remove this feature from your app.”

Developers can now sell NFTs with Apple’s approval. However,
the company imposes the same monetization structure to NFT sales as
it does to other App Store purchases: a 30 percent commission from
app developers who earn over $1 million annually through the
‌App Store‌ and 15 percent from smaller sellers. Apple
says apps can list, mint, and transfer NFTs and provide a mechanism
for users to view their NFT collections as long as they do not
unlock additional gameplay features or functionality within the
app. Apps also can promote other NFT offers as long as they do not
provide external links or purchase media that circumvent
Apple’s payment system.

While it is one of the largest technology companies in the
world, the Cupertino giant has done little to embrace blockchain
technology, and its products are criticized for being too
closed-off. This new development indicates that, while progress is
slow, Apple is warming up to blockchain technology and its
applications.

Apple’s 30% Solution Remains Controversial

Apple’s hefty commission tag has drawn criticism from the
global crypto community and drawn contrasts to several other NFT
markets. OpenSea and Magic Eden’s commissions hover around 5
percent; others have kept their transaction cost threshold as low
as 2.5 percent.

Tech blogger Florian Mueller called Apple’s “app
tax” on NFT sales “abusive but consistent“, adding that the
actual costs to developers can frequently exceed the 30 percent
commission cited when referencing the App Store, as some geographic
regions are subject to fees as high as roughly 35% in addition to
other fees applied to running search ads.

Persistent Apple critic, Epic Games CEO Tim Sweeney, also tweeted that Apple is “crushing”
another nascent technology that “could rival its grotesquely
overpriced in-app payment service,” and that Apple’s
exorbitant fees could suffocate the entire NFT sector.

Apple’s commission policy is the basis for Epic Games’
lawsuit against Apple, which has been ongoing since 2020. The video
game publisher sued Apple for not allowing it to use its payment
platform instead of the App Store’s in-app purchases and for
taking a 30% cut.

Challenges With The Secondary Market

Magic Eden, the largest Solana NFT marketplace, also needed
clarification on the move, declining in-app trading support after
hearing intense cost demands from Apple. “Our app remains
available in the App Store as a tool showcasing Magic Eden listings
and mints, but it does not have trading support,” a Magic Eden
spokesperson said.

Secondary NFT sales are also problematic. Magic Eden and
OpenSea, for example, typically charge a commission of no more than
5%.

“In this case, if a collector wants to buy an NFT through
the Magic Eden or OpenSea app on an iPhone, the seller will only
receive 70% of the purchase price,” Blockwork explained. “And the marketplace
is unlikely to be interested in making up the difference.”

Apple’s decision to allow NFT sales at its standard premium
is a significant roadblock for NFT startups. Several startups have
complained about the rules Apple allegedly imposes, and that the
fees make using the App store difficult to justify.

While a court decision last year required that Apple allow links
to off-platform payment channels, this may not be relevant for NFT
trading because Apple does not accept cryptocurrency payments. All
item listings are in dollars and are paid in fiat. NFT marketplaces
face the challenge of constructing additional infrastructure to
support Apple’s payment system, and NFT dollar prices are
constantly changing due to cryptocurrency volatility.

Few Blockchains Can Scale To Meet Apple’s User Base

But not all Web3 companies have balked at Apple’s policy.
Some see benefits to Apple’s NFT acceptance because the market
and Web3 apps available in its store gain the potential to achieve
mass adoption. In addition, a 30 percent commission to Apple is
better than being prohibited from the App Store altogether.

Apple can attract hundreds of millions, if not billions, of
people to NFTs and crypto by validating crypto and NFTs. The gaming
industry, home to approximately 4 billion online players right now,
is another sector that could generate large commissions. By current
estimates, fewer than 100,000 people play cryptocurrency games, so
the integration into iOS apps could bring in thousands or millions
of new users.

Conclusion

Apple’s decision to allow developers to sell NFTs in its App
Store may be portentous. Apple has traditionally been very
protective of how its platforms are used, and this move could be
interpreted as a sign that it is beginning to loosen restrictions
and open to other types of apps and services. Everything from
blockchain-based games to decentralized social networks could fall
under this category.

This news has been interpreted as exploitation of an emerging
industry as well as the green light for Web3 applications to branch
out from being the sole province of Android. The truth is that it
is both. While this may not be the most significant development in
the crypto space, it does show that Apple believes in the
technology and wants to help it progress. Finally, it remains to be
seen how Apple’s decision will impact the nascent crypto app
ecosystem and the blockchain industry. For example, gaming may now
find a niche within the expanding ecosystem, with developers
encouraged to create more diverse games and users willing to invest
more time and money into the blockchain world.

This new allowance for NFTs represents a significant step toward
decentralizing digital data for a company that has long been
obsessed with protecting its bottom line. It also demonstrates that
Apple is taking notice of what blockchain offers.

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