What does Apple’s controversial NFT policy mean for Ethereum and Solana?

The good news is that apple (AAPL 7.55%) now supports non-fungible tokens (NFT) in the App Store. Given Apple’s huge influence in the tech world, this seems to signal the future use of NFTs in the mass market. The bad news is that Apple’s new NFT rules are potentially so restrictive and burdensome that there has already been a backlash in the crypto community.

Since Ethereum (ETH 8.14%) and Solana (SUN 9.74%) are the top two crypto players in the NFT world, it’s clear that Apple’s new NFT policies are going to have an important impact on how these two cryptos move forward. Let’s take a closer look at three controversial Apple NFT rules and what they could mean for Ethereum and Solana.

1. 30% tax

Apple’s decision to cut 30% of all NFT transactions in the app is the issue that gets the most attention. Yes, you can now buy and sell NFTs in apps, but Apple will impose the standard 30% fee on all transactions. This “tax” has always been a major source of contention in the tech world. There have been lawsuits about this, and even Elon Musk has weighed in on the matter. Some developers and creators see this 30% tax as potentially killing the NFT app business.

Image source: Getty Images.

Solana has already come forward and said that it will not go together with this 30% tax. To see how this plays out in real life, let’s take the example of Magic Eden, which is the best Solana NFT marketplace. Right now, you can go to the App Store and download the Magic Eden app. When you open Magic Eden on iPhone, you can browse all the popular NFT collections and see all the best NFT projects. But you can’t buy anything in the Magic Eden app right now. If you find an NFT you want to buy, you will need to go to the Magic Eden website, where you will be charged a much cheaper transaction fee of 2%.

2. Pay with fiat, not crypto

Another very controversial issue is Apple’s decision not to allow cryptocurrency as a form of payment for NFTs. In many ways this goes against the whole concept of NFTs. For NFT collectors, the way you have traditionally paid for NFTs is with crypto. When you go to OpenSea, which is the largest Ethereum NFT marketplace, you see the price of NFTs listed in ETH, not dollars. When you go to Magic Eden, you see the price of NFTs quoted in SOL, not dollars.

Nevertheless, the decision by Apple to ban crypto payments may make NFTs easier to understand for the casual user. It’s not natural for most people to say something like, “I just made a bargain on Bored Ape NFT. I only paid 75 ETH for it.” As someone has pointed out, Apple is just trying to simplify NFTs for the average person. You pay for your digital music in dollars, so why shouldn’t you pay for your digital NFTs in dollars?

3. Prohibition of certain types of NFTs

Where things get particularly restrictive is when it comes to what types of NFTs people will be able to buy, sell and trade. Currently, Apple appears to be placing a de facto ban on NFTs, which are NFTs that contain additional features, benefits, or benefits. In very simple terms, these are NFTs that aren’t just pretty pictures – they come with other bells and whistles that make them valuable. Apple has specifically included language that NFTs are not allowed to unlock other “features or functionality” in the NFT Policy.

The biggest impact here may be on play-to-earn (P2E), which includes the ability to earn or acquire in-game assets while playing the game. These in-game assets are often in the form of NFTs. Since Ethereum is generally considered to be the premier blockchain for P2E gaming, this Apple policy seems to have the biggest impact on the Ethereum NFT ecosystem.

The future of NFTs

Right now, it looks like Apple may be trying to become a leader in the mobile NFT space. If you own an NFT, Apple wants it on an iPhone. If you buy NFTs in the primary market or trade NFTs in the secondary market, Apple wants you to do it on an iPhone. And of course Apple will take a good cut of each transaction. Genius!

Solana thinks it has a big solution for all of this: 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. Although this phone was never designed to be an Apple challenger or to shake up the Apple ecosystem, it may convince developers to ditch Apple for Solana and for users to make future NFT transactions via Solana. For that reason, I am more optimistic about Solana than Ethereum when it comes to the future of NFTs.

Big picture, Apple’s formal entry into the NFT world opens up new opportunities for both Ethereum and Solana. Apple tries to make NFTs as simple and easy to use as possible. It will increase the total size of the NFT pie for Ethereum and Solana. However, it is up to these two cryptos to figure out how to protect their share of the pie if Apple ever becomes a dominant player.