Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

'Apple Must Be Stopped': Tech Giant Entering NFT Space But Wants Its 30% Cut — Backlash Ensues

Published 26/09/2022, 18:46
Updated 26/09/2022, 19:41
© Reuters.  'Apple Must Be Stopped': Tech Giant Entering NFT Space But Wants Its 30% Cut — Backlash Ensues

© Reuters. 'Apple Must Be Stopped': Tech Giant Entering NFT Space But Wants Its 30% Cut — Backlash Ensues

Onboarding the next group of people to the world of non-fungible tokens could see an evolution beyond art and profile pictures into the increased utility of gaming, sports, tickets and company rewards. Large companies with massive customer bases can also help onboard more people to the space, but it may come at a cost.

What Happened: Technology giant Apple Inc (NASDAQ: NASDAQ:AAPL) has entered the non-fungible token space, allowing transactions through apps on its marketplace. Like other transactions across apps on the Apple iOS Store, Apple is taking a 30% commission on the NFT transactions, which has been met with backlash.

Among the critics of the Apple news shared by The Information was Epic Games CEO Tim Sweeney.

“Now Apple is killing all NFT app businesses it can’t tax, crushing another nascent technology that could rival its grotesquely overpriced in-app payment service. Apple must be stopped,” Sweeney tweeted.

Sweeney and Epic Games previously battled with Apple over its commission structure in relation to the popular game “Fortnite.” Epic Games is partially owned by Tencent Holdings (HK:0700) (OTC: TCEHY). Apple delisted “Fortnite” from its app store after Epic found a way to work around Apple’s commission fees.

NFT marketplace leader OpenSea takes a commission rate of 2.5%. The Information also cited NFT marketplace company Magic Eden withdrawing its offering from the Apple App Store previously, even after Apple offered to cut commissions to 15%.

Some NFT companies have said the App Store commission rates make it impossible for them to offer tokens on the platform.

Another challenge could be the use of U.S. dollars instead of cryptocurrency for app store transactions, which could force NFT companies to experience more volatility from the swing in prices in both cryptocurrency and the U.S. dollar along the way.

Related Link: How To Buy NFTs

Why It’s Important: Despite the backlash, it shouldn’t be understated how big the adoption of NFTs could be, with major companies like Apple allowing an easy way for companies to offer NFT transactions from their apps.

The offering from Apple of NFT transactions comes at a time when NFT collections are welcoming new buyers and seeing increased volume during a time of decline in sales activity.

Many in the NFT industry are questioning if the 30% commission trade-off is worth getting more people into the space.

Major integrations by non-cryptocurrency native companies could help drive the adoption of NFTs.

Starbucks Corporation (NASDAQ: NASDAQ:SBUX) recently announced its NFT reward program, an offering from a major corporation that could help NFTs gain interest in the form of utility for companies.

Social media platforms like Twitter Inc (NYSE: NYSE:TWTR) and Meta Platforms-owned (NASDAQ: META) Instagram are integrating NFT ownership as a way to highlight and show off new profile pictures.

As companies in the gaming, sports and ticket spaces get set to launch NFTs, they could now be subject to paying out commissions on sales to Apple for transactions done in apps. This could limit the number of companies looking to enter the NFT space.

Apple getting involved in the NFT space is the latest example of companies being open to the growing sector of the cryptocurrency market, but comes with a high cost that could quickly scare away adoption.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

Latest comments

greedy bastards
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.