Why Apple’s 30% tax on App Store NFT sales is getting mixed reactions

Apple requires a 30% commission on all NFT transactions made through apps listed in the App Store, and a recent article highlighting this policy sparked a flurry of angry articles in the Web3 space. Apple does not accept cryptocurrency payments, nor does it allow NFTs to be denominated in their native cryptocurrencies, which makes listing and trading NFTs very difficult.

There’s nothing new about Apple’s 30% tax on App Store purchases, as it’s an important, albeit controversial, part of its multi-billion dollar business model. However, Apple also has a bitter history with NFT-related apps, such as removing NFT Play-To-Earn (P2E) games under South Korean regulatory pressure, or banning crypto wallet apps that manage NFTs. . However, Apple’s customer base is over a billion users, and listing an app on the iOS App Store provides a major source of traffic for many companies and startups, which can offset the commission of 30% with the right business models.


Related: How NFT royalties work in the real world

A recent article by Information sparked controversy in the Web3 industry, detailing how Apple’s decision to soon allow NFT sales with its standard 30% sales tax presents a major roadblock to NFT startups. While a court ruling last year required changes to payments to allow links to off-platform payment channels, that simply means apps can direct users off-platform to make payments. However, this may not be useful for NFT trading. Because Apple will not accept cryptocurrency payments and will require all item listings to be denominated in dollars and paid for in fiat, NFT marketplaces face the hurdle of having to build additional infrastructure to support supports Apple’s payment system, and NFT dollar prices are constantly changing due to cryptocurrency. volatility. However, not all Web3 commentators are against this policy, as Apple’s reach extends to over a billion users and any kind of Web3 apps on its store could accelerate mass adoption, and a 30% commission for Apple is better than getting banned from the App Store. .

Few blockchains can scale to meet Apple’s user base

Onboarding a billion Apple users to Ethereum at this time would be catastrophic for Ethereum’s blockchain gas fees, even if only a fraction of them were to use NFTs. Fortunately, Ethereum’s popular NFT marketplace, OpenSea, uses the Immutable X scaling solution to facilitate gasless trading, which claims to support up to 9,000 transactions per second and could potentially handle the volume of the request for NFT on an iOS application. However, if an NFT application built on a ‘Layer-1’ blockchain (i.e. Ethereum or Solana) becomes popular enough, it could seriously harm the user experience of blockchain technology by sending gas fees “towards the Moon.

It’s possible that Ethereum’s blockchain competitor Solana could handle the volume of transactions without suffering a gas fee crisis, but Solana has been known to crash when overloaded with spam transactions. Additionally, Solana’s most popular NFT marketplace, Magic Eden, removed the NFT purchase functionality from its iOS app in protest at the 30% commission policy, although browsing the marketplace is still functional. Ultimately, it’s more likely that any NFT-related app or game that succeeds under Apple’s policies will have to be built from the ground up around those policies, and existing NFT marketplaces can’t do that.

While many in the Web3 community are outraged that they’ve received the same controversial treatment as all apps in Apple’s App Store, not everyone is mad at Apple for finally giving the go-ahead. to NFT sales on iOS apps. Unfortunately, NFTs are still too poorly understood and underdeveloped to sell to Apple’s Web2 customer base, many of whom view NFTs and cryptocurrencies as scams. Even if Apple didn’t impose harsh policies on iOS developers, a popular iOS NFT app that isn’t built on Immutable X or another gasless blockchain could potentially make its native blockchain unaffordable for everyone. However, if scaling issues can be avoided, a popular NFT-based app on AppleThe App Store could actually be invaluable to mass Web3 adoption, provided it’s designed around the 30% opportunity cost that hampers most startups.

Source: The News

About Sandra A. Powell

Check Also

Will Twitter crash? A look at the app’s current issues due to reduced monitoring

Will Twitter succeed next week as World Cup talk increases server demand? Right now, Twitter …