- Apple takes 30% of NFTs sold as in-app purchases
- All transactions must be made in USD and not in cryptocurrency
Tech giant Apple now allows NFTs to be bought and sold through applications listed in the App Store. This allows developers of current apps to sell non-fungible tokens in-app and new apps to install NFTs into them.
The first drawback, however, is that Apple is adopting its existing Web2 monetization structure, where it gets a 30% discount on app developers who earn more than $1 million from the App Store on an annual basis, and 15% less than that.
Android’s app store Google Play applies the same policy.
Before this decision, apps that stored or displayed NFTs violated Apple’s rules. Now developers can sell NFTs with Apple’s blessing.
No crypto allowed – not very Web3
The second catch is that transactions must be in USD. Cryptography is not an option.
The public reaction has been mixed. Tim Sweeney, the CEO of Epic Games – the company behind the Fortnite video game and no stranger to arguing with the tech giant – tweeted that “Apple needs to be stopped.”
He believes that the 30% cut Apple is taking could be prohibitive for some and could even kill small NFT companies.
This is the basis of Epic Games’ lawsuit against Apple that has been pending since 2020. The video game publisher sued Apple for not allowing it to use its own payment platform instead of in-app purchases through the App Store and its discount. 30%.
Another company that wasn’t happy with the move was Magic Eden, the largest Solana NFT marketplace, which has pulled its service from the App Store after learning about the policy, according to a Friday report from The Information.
However, the Magic Eden app will remain in the App Store at the time of publishing.
There is a problem when it comes to secondary NFT sales. Marketplaces like Magic Eden or OpenSea typically take a commission of no more than 5%.
In this case, if a collector wants to buy an NFT on the Magic Eden or OpenSea app on an iPhone, the seller of that NFT will only get 70% of the sale price. And the market probably won’t be interested in covering the difference.
“This mainly benefits the primary sale of NFTs where the 30% fee can be justified,” Milan Harris, game director at Cool Cats, told Blockworks, adding that the “fee is worth the accessibility and user experience that can be directly are delivered on an Apple device.
He sees these policies primarily benefiting video games, while “the types of transactions that make NFTs and blockchain technology valuable are still likely to remain outside the Apple ecosystem,” he added.
Only purchases made directly in the app will incur a fee and transactions made on other platforms will remain unaffected.
On the other hand, Gabriel Leydon, founder of the Digidaigaku NFT project, who is quite optimistic, is “happy to give Apple 30% off a free NFT.”
He tweeted that this could give millions more people access to NFTs, as developers can still give away NFTs for free and let users sell them on secondary marketplaces, while avoiding the 30% tax.
When asked about the timing of this announcement, Harris said Apple probably felt pressure to act quickly.
Since Apple’s iPhone is the company’s most profitable product, “Apple doesn’t want to make the mistake of letting competitors lead the way by being the platform of choice for mobile NFT activities — be that gaming, collecting, etc. .
For example, a competitor could be Solana, which recently debuted its Android-powered crypto-first smartphone, which is expected to be released in early 2023.
Apple is also rumored to be working on smart augmented reality glasses that could start shipping by the end of this year — potential competition for Facebook in the metaverse.
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Ornella Hernandez
Blockworks
News reporter
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