Apple's New NFT Policy
Apple is already supporting non-fungible tokens (NFTs) in its App Store and has updated its developer terms to severely limit how apps in its store can use NFTs.
Apple’s massive influence in the tech world seems to signal the future mass-market adoption of NFTs. But there has already been blowback in the crypto community because of Apple’s restrictive and onerous rules.
On Oct. 24, the tech firm released guidelines for non-fungible tokens (NFTs) and clarified rules around cryptocurrency payments and crypto exchanges trying to get a cut of the sales. Under the new rules, the apps selling NFTs may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms and must now go through Apple’s in-app purchase system.
The new rules allow app developers to use in-app purchases to “sell and sell services” related to NFTs such as “minting, listing, and transferring.” Cryptocurrency isn’t an option for payment.
An enormous caveat is that the policy does not permit the sale of “utility” NFTs. App developers cannot allow users to unlock in-app functions or features with NFTs, nor can they redirect users to external buying mechanisms.
These limitations will likely be detrimental to blockchain-based games that use NFTs. However, such apps don’t have a large presence in the first place, as querying its app store only returns nine NFT apps.
All of this means that Apple does put a major restriction on the kind of services that can be offered involving NFTs as it takes an up to 30% cut of in-app payments.
Reactions to the New Policy
According to the headlines from Forbes and Game Developer, some have acknowledged Apple’s policy positively highlighting that the new store policy explicitly accommodates NFTs. While others have criticized Apple for its policy’s restrictive nature and seemingly excessive 30% cut.
Tim Sweeney, CEO of Epic Games, said that Apple is neither for nor against NFTs but rather is motivated solely by money. “They support NFTs they tax and ban NFTs they don’t tax,” Sweeney observed.
Yat Siu, a blockchain-focused gaming company Animoca Brands co-founder, suggested that Apple’s restrictions are only possible because of its current dominance. He argued that the economic opportunity of blockchain gaming will become “so weighty, like an open market,” that Apple will “eventually capitulate.”
Today’s news comes alongside an FCA discussion concerning Big Tech and its impact on retail finance. Those discussions aim to create a pro-competitive approach in those markets and could lead to future regulatory changes, thereby impacting Apple’s policies around NFTs and payments.
What Does All This Mean for Ethereum and Solana?
It’s obvious that Apple’s new NFT policies are going to have an important effect on Ethereum and Solana, which are the two top crypto players in the NFT world. Let’s discuss Apple’s three controversial NFT rules and their impact on Ethereum and Solana.
1. The 30% Tax
Apple’s 30% “tax” on all in-app NFT transactions has always been a huge source of contention in the tech world as some developers and creators see this 30% cut as potentially killing the NFT app business. Moreover, there have also been lawsuits fought over this, and even Elon Musk has weighed in on the matter.
Solana has already said it would not go along with this 30% tax. Let’s take the example of Magic Eden, which is the top Solana NFT marketplace. Right now, you can go into the App Store and download the Magic Eden app. Once you open up Magic Eden on your iPhone, you can browse all the popular NFT collections and view all the top NFT projects. But you can’t buy anything within the Magic Eden app right now. If you find an NFT you want to buy, you have to go to the Magic Eden website, where you will be charged a much more reasonable 2% transaction fee.
2. Pay with Fiat, not Crypto
Apple doesn’t allow cryptocurrency as a form of payment for any NFTs, and this goes against the entire concept of NFTs. For NFT collectors, crypto is the traditional way of paying for NFTs. The price of NFTs is quoted in ETH, not dollars on OpenSea, which is the biggest Ethereum NFT marketplace. And on Magic Eden, the price of NFTs is quoted in SOL, not dollars.
However, this decision by Apple could make NFTs easier to understand for the casual user. It’s not natural for most people to say something like, “I just got a bargain on my Bored Ape NFT. I only paid 75 ETH for it.” As some have noticed, Apple is just trying to simplify NFTs for the average person.
3. Ban on Certain Types of NFTs
Apple is putting a de facto ban on utility NFTs, which are NFTs that contain extra features, benefits, or perks. In other words, these NFTs are not just pretty pictures — they come with other bells and whistles that make them valuable. Apple doesn’t allow unlocking other “features or functionality” of NFTs.
The biggest impact here could be on play-to-earn (P2E) games, where players are rewarded with in-game assets. These in-game assets are often in the form of NFTs. This Apple policy would seem to have the greatest impact on the Ethereum NFT ecosystem as it is the premier blockchain for P2E gaming.
To sum up, it looks like Apple tries to become the leader in the mobile NFT space. Apple wants your NFT to be on an iPhone to take a nice cut of every single transaction.
Solana has thought of a new “mobile crypto” strategy that includes the first-ever crypto phone. The new Saga phone is set for release in the first quarter of 2023. This phone could convince developers to leave Apple for Solana.
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