Hello readers and welcome back!
Last week, I wrote about Axie Infinity’s troubles after a $625 million heist. This week I’m talking about Apple and cryptocurrencies.
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This week my colleague Sarah wrote an interesting story about the app “NFT” in the App Store, which was suddenly banned by Apple despite having been running in plain sight for several months. Apple claimed that the app was misleading consumers by selling “NFTs” that could not be resold and were not even stored on the blockchain. The app sounds a bit iffy in my opinion, but that’s not the app’s developer’s fault; It looks like the app was created to live in the gray area of Apple’s defunct NFT guidelines. (It’s worth noting that Apple, oddly enough, restored it to the App Store within an hour of our story’s release.)
This very short saga raises another interesting question: What are Apple’s plans for NFTs?
On the one hand, I’m sure Apple would want nothing more than an explicit ban on NFTs from the App Store. Apple claims that a significant part of the App Store’s usefulness lies in protecting users from fraud, which is quite difficult to do in today’s NFT environment. Regulation of the industry in the walled garden of its App Store seems like a nightmare, which will inevitably require Apple to create its own internal SEC.
But, and this is important but, Apple loves money too; More precisely, income from services in the App Store.
Games are the most popular industry on the App Store, generating billions of dollars in revenue for Apple every year. The widespread adoption of NFTs by gaming companies is likely to grow rapidly over the next decade, and missing out on those revenues would be disastrous for Apple’s control of in-app payments in mobile games.
But how does Apple value its IAP payment system in NFT and blockchain asset applications?
While individual applications may justify Apple’s tax on primary sales of NFTs, it is impossible for the same fee to apply to secondary peer-to-peer sales of already owned NFTs. NFT storefronts such as OpenSea and Rarible have already released apps on the App Store, but these native apps only allow users to view NFTs and not their own storefronts. Most legitimate NFT startups are mulling over how to move to mobile, and if Apple doesn’t follow clear guidelines, more developers could start investing in web experiences that bypass App Store rules.
One thing is clear: if Apple makes a specific exception for NFTs in its own App Store policies, it will be on its own terms. They could go different ways; I could see a world where Apple could only allow certain assets on certain blockchains, or even create their own blockchains. But Apple’s path to mastering the user experience will most likely be for Apple to be directly involved in the development of its own smart contracts for NFTs, which developers need to use to comply with App Store rules.
This can easily be justified by the desire to ensure that consumers have a consistent experience and can trust the NFT platform in the App Store. These smart contracts can automatically send royalties to Apple and lead to a new pipeline for in-app payments, a pipeline that can continue even in transactions that occur outside of the Apple ecosystem (!). More sophisticated features can also be built in to allow Apple to handle workflows such as transaction rollbacks.
Needless to say, any of these moves will cause great controversy among existing developers. If Apple establishes how smart contracts are written and what can be used, it will be a huge change in the crypto world and cause a lot of upheaval in the developer ecosystem. But I think it’s clear that Apple will have a hard time ignoring this market for a long time.
Here are a few stories from this week that I think you should take a look at:
Axie Infinity secures $150 million in funding after $625 million heist
A little follow-up to my newsletter from last week… Seriously hacked cryptocurrency game Axi Infinity announced this week that they have raised $150M from Binance to recover stolen funds and will add it to their own fund. Last week to be replaced by a hacker.
Elon promises wider adoption of fully autonomous driving software this year.
Tesla’s (Ilona’s, to be exact) promises of an imminent release of fully autonomous driving software have been a constant source of controversy. However, at the company’s Cyber Rodeo event, Musk confirmed that a full software release is just around the corner.
Meta to skip F8 developer conference this year
Facebook’s long-term developer conference this year will be canceled or “paused,” according to Meta. The F8 Developers Conference used to be Facebook’s main venue for showcasing updates across the Facebook, Instagram, and WhatsApp platforms, but after the company’s Metaverse pivot, it’s likely their flagship event will move to the Connect event in the fall.
Some of my favorite articles from our gaming-updates+ subscription service this week:
3 views of Elon’s investments on Twitter
“…Since we have witnessed the exodus of some right-wing figures to alternative Twitter services in recent years, I have been constantly reflecting on how the big names are moving their fans to new platforms. Someone left voluntarily, someone patted himself on the back with his boot. But what they all have in common is that their new homes have generally failed to challenge the hegemony of Twitter…”
What Fast’s demise teaches us about Unicorn’s vulnerability
“…it looks like a few startups raised funds above the protective reward threshold last year, leaving them in a near-zero margin position. Any startup making double or triple digit returns in 2021 is now facing declining value for tech companies and well-known groups of investors pulling back deals. This can lead to down rounds (or worse)…”
What does Binance Axi Hedging for Web3 mean?
“…the Ethereum-based Ronin sidechain hack, Axi, became the largest known cryptocurrency to date. Things looked bad not only for Sky Mavis, but also for investors like a16z who were promoting Axi as the future of crypto. It starts to look even worse if you look at the demographics of Axie players in general. No more than 25% have a bank accountThe company said there are low-income workers in many developing countries who depend on Axi for a significant portion of their income…”