Apple charges a 30 percent commission on all NFT trades made through apps listed on the App Store, and a recent article highlighting this policy has sparked a flurry of angry articles across the Web3 space. Apple does not accept cryptocurrency payments, nor does it offer the ability to denominate NFTs in their native cryptocurrencies, making listing and trading NFTs very difficult.
Apple’s 30 percent tax on App Store purchases is nothing new, as it’s a big part of its multi-billion dollar business model, albeit a controversial one. However, Apple also has a bitter history with NFT-related apps, such as B. the need to remove play-to-earn (P2E) NFT games under South Korean regulatory pressure or to ban crypto wallet apps managing NFTs. However, Apple’s customer base is over 1 billion users, and listing an app on the iOS App Store represents a major source of traffic for many companies and startups that can offset the 30 percent commission with the right business models.
A recent article by The information sparked controversy across the Web3 industry and explained how Apple’s decision to soon allow NFT sales with its standard 30 percent sales tax poses a serious obstacle to NFT startups. While a court ruling last year required changes to payments to allow links to off-platform payment channels, it just means apps can instruct off-platform users to make payments. However, this may not be useful for NFT trading. Since Apple does not accept cryptocurrency payments and requires all item listings to be denominated in dollars and paid for in fiat, NFT marketplaces face the obstacle of having to build additional infrastructure to support Apple’s payment system and NFT dollar prices are changing as a result the cryptocurrency constant volatility. Not all Web3 commenters are against this policy, however, as Apple’s reach extends to over 1 billion users and any type of Web3 apps in its store could accelerate mass adoption, and a 30 percent commission to Apple is better than a commission from the Getting banned from the App Store.
Few blockchains can scale to meet Apple’s user base
Onboarding 1 billion Apple users to Ethereum at this point would be disastrous for Ethereum’s blockchain gas fees, even if only a fraction of them were using NFTs. Luckily, Ethereum’s popular NFT marketplace OpenSea uses the Immutable X scaling solution to facilitate gas-free trading, which is said to support up to 9,000 transactions per second and could potentially handle the volume of demand for NFTs in an iOS app. However, if an NFT app built on top of a “Layer 1” blockchain (i.e. Ethereum or Solana) were to become popular enough, it could seriously degrade the user experience of blockchain technology by sending gas fees.to the moon.“
It’s possible that Ethereum’s blockchain competitor Solana could handle the transaction volume without suffering a gas fee crisis, but Solana is notorious for crashing when overloaded with spam transactions. Solana’s most popular NFT marketplace, Magic Eden, has also removed the NFT buying feature from its iOS app in protest of the 30 percent commission policy, although browsing the marketplace still works. Ultimately, it’s more likely that any NFT-related app or game that thrives under Apple’s guidelines will need to be built from the ground up around those guidelines, and existing NFT marketplaces can’t do that.
While many in the Web3 community are outraged that they’re getting the same controversial treatment as all apps on the Apple App Store, not everyone is angry that Apple is finally greenlighting NFT sales through iOS apps. Unfortunately, NFTs are still too misunderstood and underdeveloped to sell to Apple’s Web2 customer base, many of whom perceive NFTs and cryptocurrencies as scams. Even if Apple didn’t impose strict guidelines on iOS developers, a popular iOS NFT app not based on Immutable X or any other gas-free blockchain could potentially make its native blockchain unaffordable for everyone else. However, if scaling problems can be avoided, a popular NFT-based app is a good choice AppleIndeed, Web3’s App Store could be invaluable for mass adoption, provided it is designed for the 30 percent opportunity cost that hampers most startups.
Source: The Information
