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Apple’s Decision: NFTs, Marketplaces, and the Rule Makers

 

                                                                       from ledgerinsights

 

 

Since NFTs came into our lives, discussions follow this topic. For the past year, the question of what NFTs really do (or whether they do) has been muddled, but at least today many people can simply describe what NFTs are when asked. This progress is not bad at all. But it seems like more time is needed for NFTs to become a massificated concept. The most practical way of massification seems to find new and larger markets for NFT trading.

 

Currently, OpenSea is an NFT marketplace that is the leader of the sector with 2.2 million traders and a total of 31.67 billion volumes so far. Of course, its ranking is also due to the fact that it can be traded on Ethereum, Solana, and Polygon blockchains. Another major marketplace is Magic Eden, which is traded on Solana and Ethereum. According to all-time stats, Magic Eden also has more than 1 million users and 1.77 billion volumes.

 

Looking at an overall assessment, OpenSea hosts larger budget transactions with a larger volume, while Magic Eden hosts relatively low-budget trades. In other words, although Magic Eden is traded on fewer chains, there is no incredible volume difference with OpenSea.

 

As we said, besides the most popular markets above, the NFT market has some paths ahead for it to grow. Then, a significant problem for the future of NFTs: Will they move towards Web2 or resist on Web3 at the expense of diminishing?

 

In this article, we will move on from Apple’s NFT policy. We will ask questions, but we will also have some analyzes.

 

                                           By Dado Ruvic/Illustration/File Photo/Reuters

 

 

Apple announced at the end of September that they would allow NFT trading on the AppStore, but with a 30% commission fee.

The high commission fee is understandably not supported by NFT marketplaces and developers, as this fee is between 2%-3% in most marketplaces. The first big reaction came from Epic Games CEO Tim Sweeney. He described it as “grotesquely overpriced” and criticized Apple’s stance in the developing industry, saying, “Apple must be stopped.”

Although this decision of Apple is generally met with a negative response among developers and users at first glance, it is possible to state the pros & cons of the situation.

 
 

Pros:

 

  • In recent years, we have been in the process of transition from Web2 to Web3. As one of the biggest authorities in the market, Apple has more than 1 billion users. If NFTs and other blockchain-based projects want to reach the masses, they will have to become a partner with market giants like Apple, Microsoft, or Google at some point. Apple, on the other hand, can offer the desired wide-range market in this regard. There will be reached a quite large user base that NFT projects cannot currently provide on their own. Web3-based CEO Gabriel Leydon also drew attention to this in his tweet: “putting an ETH wallet in every single mobile game onboarding 1B+ players!

 

  • Apple’s ability to persuade its users is very high. An example of this was Apple’s removal of headphone jacks on its smartphones or no longer offering power adapters and headphones in their boxes, which was accepted by its users. So, Apple has a very loyal user base. This connection between Apple and its users can be a very significant advantage in the acceptance of NFTs by the masses.

 

  • One of the most outstanding problems facing NFTs and blockchain markets is the regulation problem. A big brand of Apple scale will of course enter this market with a well-established regulatory system. This can change doubtful attitudes toward NFTs and create a perception of legality towards them. Thus, Apple can take a serious lead in solving regulation and reliability problems.

 

  • When Apple enters this sector, Microsoft and Google are likely to enter as well. Apple is usually cautious with such avant-garde projects, as is its general policy, but this time it was bold and took the initiative in NFT. This attitude of Apple will also affect its rivals Microsoft and Google, which are a little more moderate because they are software-intensive companies. As a result, competition is likely to occur, which can be considered a positive contribution to NFTs and the market in general.

 

Cons:

 

  • Of course, the first remarkable negative aspect is a relatively high commission fee of 30%. This causes popular NFT marketplaces not to prefer the App Store at this stage.

 

  • Another is that only fiat currencies are allowed to be used in trading. This means that it puts a distance between cryptocurrencies and Apple, which is one of the factors that cause the negative attitude of NFT marketplaces.

 

  • This move of Apple can be read as a hint of the possible monopoly policy for Web3. Apple wants to enter the NFT market as a rule maker. This situation naturally contradicts decentralization, which is the reason and principle for the emergence of blockchain.

 

  • In a scenario where Apple enters the NFT market with a comprehensive initiative, this will undoubtedly directly affect other marketplaces. Suppose you are a user unfamiliar with NFTs and you want to trade NFTs. In this case, whether you are an Apple user or not, you can use the existing marketplaces just fine, but it is very possible that the NFT marketplace offered by the Apple brand will be more attractive and secure for you, due to the hugeness of the brand. This paves the way for the decrease in the use of other marketplaces and the monopoly of Apple.

 

                                                                 Photo by Zhiyue on Unsplash

 

These aspects seem unlikely to enable the integration of NFT and blockchain technology with Apple, at least in the short term. However, there are also understandable sides to Apple’s attitude.

 

It is intelligible that a global company like Apple with a market capitalization of over $2 trillion may avoid using cryptocurrencies that have not yet been fully regulated, because at this stage Apple would not want to have legal problems with the states’ laws.

 

Likewise, the relatively high commission of 30% is due to Apple’s awareness that NFT marketplaces will one day have to cooperate with giant Web2 companies like itself. So, they realize that they are needed, and they say, “If you want to take advantage of Apple, there has to be a cost," and yes, "it’s a high cost.

 

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