NFT
Steppe, one mobile “move-to-earn” game which rewards players with crypto tokens for walking and running with specialized NFTs, has launched an in-app marketplace for NFT sales within its iOS app for Apple’s iPhone. Furthermore, developer Find Satoshi Lab integrated Apple Pay for purchases made with credit and debit cards.
Mobile apps typically do not allow secondary market NFT purchases due to the complexity introduced by Apple and Google charge a surcharge of 30% on most in-app purchases. So are NFTs, meaning app developers have to charge users that extra fee to transact on mobile, or else eat the fees as part of the cost of doing business.
Stepn has done the former here, but in a way that abstracts the crypto elements and bundles the extra costs into the process. In this case, Stepn has made it possible for users to purchase NFT sneakers, which allow users to earn token rewards, through the app via a new in-app currency called Sparks, which is not a cryptocurrency.
STEPN integrates Apple Pay
We are pleased to announce that #STEPN is the first blockchain gaming app to secure groundbreaking integration with Apple Pay, breaking the barrier to entry for Web3
How it works
[1/6] pic.twitter.com/wCeVzjLoHE
— STEP | Public Beta Phase VI (@Stepnofficial) May 22, 2023
Users can purchase bundles of Sparks through the Stepn app (via Apple Pay) and then use them to purchase the NFT sneakers, without any cryptocurrency interaction. But the prices in Sparks are significantly higher in converted US dollars than when the exact same items are purchased through the web marketplace using Stepn’s proprietary GMT crypto token.
For example, a particular pair of sneakers was listed this morning for 110 GMT, or about $31.40 based on GMT’s price at the time per CoinGecko. Purchasing the same NFT through the iOS app costs $44.60 worth of Stepn Sparks at the fixed value of $0.10 per Spark (446 Sparks). That is an increase of 42%. Another direct comparison for another NFT purchased through both scenarios showed a difference of almost 43%.
Stepn Chief Operating Officer Shiti Manghani confirmed this Decrypt that the price displayed in the iOS app includes fees that Find Satoshi Lab handles as part of the process of users purchasing NFTs through the app. Stepn has minted NFTs in Solana, Ethereum, and BNB Chain.
“In accordance with Apple’s policy, any in-app purchase is subject to tax,” Stepn’s official FAQ states. “So if you use Spark credits to buy a sneaker, you may notice a price difference. This adjustment ensures compliance with the necessary regulations and reflects the added burden.”
If someone sells a pair of NFT shoes through the Stepn marketplace and it was purchased by an iOS user, Find Satoshi Lab will pay the seller the listed price in GMT tokens, with the remaining balance in Sparks (purchased from Stepn ) and then used to cover fees.
Apple’s 30% reduction in in-app purchases – and possible other fees in the mix around offering in-app currencies and handling credit card payments – were a sticking point for decentralized app (dapp) developers. Typically, NFT marketplaces charge a much lower platform fee for transacting – for example, OpenSea charges 2.5% of the selling price for trades.
Axie Infinity rolls out ‘Lite’ version of Crypto Game in Apple App Store
Some apps have simply decided not to enable in-app NFT transactions, such as NFT marketplace Magic Eden and the NFT monster fighting game Axie Infinitywhich just rolled out its “lite” iOS app last week without NFT trading opportunities. In the meantime, NBA Top shot maker Dapper Labs said this year it hoped to find a fix for that enable in-app NFT transactions in the future.
Apple’s policy hasn’t changed here, it turns out. Instead, Stepn found a way to work within the regulations, devising a way to enable transactions at a higher cost to users by using a new in-app currency and packaging the costs for buyers. Decrypt contacted Apple for clarification on its policy, but did not immediately hear back.
It remains to be seen if the convenience outweighs the hassle of getting users to go to the web market and deal with cryptocurrency instead. Web2 apps have had to navigate this dilemma in the past, including Twitter and its Blue subscription service, which led owner and CEO Elon Musk to complain about Apple’s discount and eventually increase the price of subscriptions on iOS.
Apple currently prohibits apps from directing users to an external web portal to pay for a service or accept external payments, though legal challenges may force the tech giant to open up.
Apple’s 30% tax mandate on iOS is illegal, judge confirms – and that could be good for crypto, NFTs
Either way, Manghani said Apple’s sheer reach makes this effort — and the increased pricing for users — worth it as NFT app builders try to figure out how to play nice with Web2 platforms. She specifically described the Apple Pay integration as “a giant step forward” as Stepn aims to have an additional 100 million users join Web3.
Apple’s massive scale “comes with tremendous responsibility for its users,” Manghani said, “particularly in a space now notorious for scams the size of FTX Unpleasant daily carpet pulls. The caution they exercise here is therefore understandable.”
“That is why we as a company are only too happy to meet their requirements [regulations] and build relentlessly [based on] their feedback to enable real user adoption of Web2,” she added. “This has been the cornerstone of our growth and fruitful partnership.”