Apple has finally allowed NFT apps on the App Store, but NFT Marketplaces are crying foul after the company announced that it would charge a 30% sales commission for each platform sale.
Last week, NFT app developers rejoiced when Apple announced that it would start allowing NFT apps on the App Store. However, the good news was dampened by Apple’s follow-up announcement that it has decided to charge a 30% sales commission for every sale, prompting NFT marketplaces to cry foul.
Aside from the 30% cut from NFT sales, the tech giant will require all purchases to be processed in-app, meaning from the App Store only, using fiat currency. NFT app developers and NFT marketplaces balked at the company’s announcement since it practically puts NFT purchases in the same boat as regular in-app purchases.
They also feel that Apple is controlling them, putting them at risk of being shut down, especially since they would be going up against a bigwig in the technology sector should they choose to fight it.
Apple’s Overpriced Sales Commission
The unexpected news prompted many NFT developers to say they would not be putting their apps on the iOS App Store. One of Magic Eden’s co-founders, Sidney Zhang, said in an interview that it has never allowed in-app sales or purchases due to Apple’s high transaction fees.
Many have slammed Apple’s 30% commission, calling it “grotesquely overpriced,” considering commissions on standard NFT marketplaces are only around 2.5%. Indeed, the disparity is overwhelming, and it’s understandable why most of the NFT community was unhappy with the decision to charge a 30% fee on all trades.
Some project and game owners see the 30% commission as bringing Web2 practices into the Web3 space, mainly because NFT prices are continuously declining. Meanwhile, talks are rife that NFT marketplaces on the App Store have limited movement and functionality because of the steep commissions.
Moreover, these marketplaces are finding it challenging being forced to process transactions in US dollars (fiat currency) instead of cryptocurrency. Such could prove risky for these NFT marketplaces considering cryptocurrency markets are volatile.
Florian Mueller, a tech blogger, called the “app tax” on NFT sales “abusive but consistent.” On the other hand, the CEO of Epic Games, Tim Sweeney, tweeted that Apple is “crushing another nascent technology that could rival its grotesquely overpriced in-app payment service,” potentially killing the market for iOS-specific apps.
Soon after Apple announced its new commission, Solana-based NFT marketplace Magic Eden put its foot down and said it would be pulling its app out from the App Store. The smartphone giant then said it would cut its commission on NFT marketplaces with less than 100 participants from 20% to 10%, but Magic Eden could not be budged from its stance.
Meanwhile, others are choosing to focus on the positive aspect of Apple finally accepting NFTs. In particular, Gabriel Leydon, Web3 game developer Limit Break’s CEO, praised Apple’s decision.
Leydon wants more people to use digital assets and Web3 wallets, and according to him, Apple’s move “could put an ETH wallet in every single mobile game onboarding 1B+ players!” He also said he would happily give Apple “a 30% cut of a free NFT.”
It is not the first time companies are butting heads with Apple regarding commissions. In August 2020, the App Store delisted Epic Games’ flagship game Fortnite after the latter tried to sell in-game purchases that bypassed Apple’s fees. It resulted in Epic Games filing legal proceedings against the tech giant.
Some of the NFT marketplaces currently on the App Store are OpenSea, Magic Eden, and Rarible, while marketplaces in cryptocurrency trading apps include Crypto.com, Binance, and Coinbase Wallet.
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