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Ah, the elusive web2-web3 bridge that we’ve all been claiming to be building. From a web3 standpoint, bridging web2 and web3 is the ultimate goal to achieve blockchain adoption, but did we ever consider web2’s perspective? Well, Coinbase didn’t.
In a tweet on Thursday, Coinbase announced that Apple had blocked users from sending NFTs through the Coinbase Wallet app.
“You might have noticed you can’t send NFTs on Coinbase Wallet iOS anymore. This is because Apple blocked our last app release until we disabled the feature,” Coinbase tweeted.
The exchange explained that Apple claimed gas fees were subject to the App Store’s 30% in-app purchase fee.
“Apple’s claim is that the gas fees required to send NFTs need to be paid through their In-App Purchase system, so that they can collect 30% of the gas fee,” Coinbase stated.
Coinbase argues that it is “clearly not possible” as Apple’s “In-App Purchase system does not support crypto so we couldn’t comply even if we tried.”
The listed crypto exchange further criticised the iPhone giant for introducing policies that “protect their profits at the expense of consumer investment in NFTs and developer innovation across the crypto ecosystem.”
Web3 bridge is falling down
Coinbase is a pillar of web2-web3 adoption. As a centralised exchange (calm down DEX fanboys), Coinbase provides a web2-friendly platform for retail traders to dip their toes into crypto. Being a listed company, its financials are transparent – even more so than Binance or Crypto.com – allowing investors to monitor its financial health. Sure, its stock price is down 80% this year, but at least investors are aware of its current state.
Having a presence on Apple’s App Store is crucial for the company too, due to its appeal to web2 normies and their ease of trading crypto on their iPhones.
However, there’s nothing decentralised about Apple nor its App Store, and Coinbase seems to have overlooked this. Coinbase comes from an industry where web3 adoption is a shared mission, but Apple doesn’t. Apple’s mission is to simply and unapologetically make money.
Apple’s 30% cut has long been criticised – even Meta made noise about being subject to the fee. Meta spokesperson Tom Channick previously told The Verge: “Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy. Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind. We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps.”
Clearly, no company is happy to hand over 30% of its profits to Apple, but that’s the entry price to its unparalleled but heavily gated ecosystem. Sometimes you just have to dance with the devil.
Gas fees vs profit
From Apple’s point of view, blockchain or not, profit is profit. Why shoud Coinbase deserve an exemption? Coinbase argues that Apple wants 30% on gas fees, which is beyond their control. This is true. Gas fees have nothing to do with Coinbase’s revenue or profit. But it’s also not in Apple’s remit either. Nonetheless, Apple still wants their piece of the pie.
“This is a legitimate topic which requires serious conversation, the clash of Web 2.0 versus crypto. Bypassing Apple Store rake is part of the goals of platforms like Coinbase NFT, just like transfers on blockchain bypass Swift, long waits, and $30 wire fees,” writes one Twitter user.
Other web3 fanboys are criticising Apple for crippling web3. “Apple’s digging a grave in web3 rn,” writes one angered Twitter user. “Exactly their new policies on their 30% tax with NFT transactions in apps is ridiculous, developers needs to find a workaround for their products, just as apps like Netflix avoids it by only using web signups so there is no in app purchase,” another stated.
The obvious move would be for Coinbase to jump ship from the App Store, but it’s a far too risky move for a company whose share price is down over 80%. Either way, Coinbase shareholders won’t be taking this news well.