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Apple's 30% fee on NFT sales might not be draconian after all, expert says


NFT creators are facing a hefty tax from Apple, which just introduced non-fungible token (NFT) in-app purchases. 15-30% tax might not be as bad as it sounds, a market researcher claims.

"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," Tim Sweeney, CEO of Epic Games, tweeted.

He referred to a recent Apple decision, reported by The Information, to allow apps on the App Store to sell NFTs through in-app purchases in fiat currency, meaning a 15-30% fee depending on your revenue. In comparison, NFT marketplaces' fees typically do not surface at 5%.

"The only possible way would be to transfer the fees to the end customer. This would not make much sense as users would be able to buy the same NFT for a price that is 30% lower directly on the marketplace." Market research company BestBrokers said after analyzing the Apple move. "This, in essence, means that marketplace apps would continue to just let users connect to their profile and browse collections. Transactions would have to remain outside of the App Store."

In the second half of 2021, daily NFT-related transaction volumes surpassed $100 million, creating a new submarket for NFT marketing. Companies and NFT artists dump large sums to promote NFT collections hoping for quick turnovers.

An actual offering from a prominent NFT marketing agency to an NFT startup illustrates just how expensive it is to promote a collection.

NFT marketing email

For a six-month campaign, an NFT creator is asked to spend at least $100,00.

"This seems like a very risky investment for an independent creator or even a team of creators, who are trying to bootstrap a project and are not relying on major financial backing," BestBrokers researcher Paul Hoffman said.

Therefore, Hoffman argues, jumping onto the App Store to sell NFTs might not be such a bad idea after all.

"With their move to allow NFT sales on the platform, Apple is, in fact, creating a blue ocean market for NFT creators, who are doing primary sales of their own NFT," Hoffman said.

An app is "relatively easy" to build, and integrating in-app purchases gives NFT creators access to Apple's over 1.5 billion active devices.

"Many independent NFT creators will be more than happy to give up 15% of their proceeds after the fact for access to a practically unlimited market. With the low relevance of the current App Store search results, the first developers that manage to push their NFT selling apps live on the App Store might profit immensely," he said.


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