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 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 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 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 TWTR and Meta Platforms-owned 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.
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