The Block: Apple's crypto policy softens as Stepn offers in-app digital asset trading

Last week, the once-wildly popular web3 game Axie Infinity announced it will be available for download on Apple’s App Store, signaling that perhaps the powerful tech giant is warming to the idea of allowing blockchain-based mobile games to operate on its iPhone.

Now Stepn, a blockchain-powered fitness app that incentivizes users with crypto rewards, has announced arguably even bigger news. The Australia-based company said its users will now be able to buy and sell Stepn’s digital assets without being forced to exit the app and use an external marketplace.

“It is a very, very big step,” said Stepn’s Chief Operating Officer Shiti Manghani during an interview with The Block. “Nothing like this has been done before. Internally we’re saying this is the biggest thing happening in crypto and not that many people know about it.”

Stepn also announced a new integration which will allow users to purchase digital assets using traditional debit and credit cards linked to Apple Pay.

Historically Apple’s App Store policies regarding the buying and selling of in-game assets have been considered hostile by some companies. One of Apple’s most controversial stances has been requiring app developers to share 30% of transaction revenues; a particularly costly requirement for blockchain-based applications that want to allow for the trading of digital assets, which in some cases can fetch hundreds, thousands, if not millions, of dollars.

Stepn outdoes Axie Infinity Stepn, which has been downloaded millions of times , is an app that allows people to first buy digital sneaker NFTs and then earn token rewards by “walking, jogging or running.” Each pair of NFT shoes have unique characteristics which influence how users are able to earn rewards.

In order for iPhone users to purchase the sneaker NFTs they will need to purchase in-app credits they can then exchange for the digital assets. The NFT sneakers can also be bought or sold for cryptocurrency on Stepn’s marketplace.

Stepn said that all of this will be possible on the iPhone without having to exit the app. Iphone users will be able to access the company's marketplace while still inside Stepn's smartphone app, it said.

This represents a marked shift from the deal Sky Mavis inked with Apple for Axie Infinity. With the Axie Infinity app currently running on iPhones in a limited number of countries, there are no in-app links to the game's NFT marketplace; there isn't even a mention of the marketplace in the app, a company spokesperson said.

"Due to Apple's policies, Axie Infinity: Origins does not contain direct links or explicit references to the marketplace within the app at this time," the spokesperson said by email. "Sky Mavis uses other platforms such as Discord and email marketing to educate the community on how to integrate the NFT marketplace into the gameplay experience on the Apple app build."

Growing user numbers While Stepn has been downloaded millions of times, Manghani acknowledged the app’s monthly active user numbers have been declining, recently falling to about 500,000, she said. Manghani and her team are hoping the Apple integration will help add users. Toward the end of last year, Stepn said it had amassed nearly five million registered users who had walked or ran nearly 70 million miles.

The Stepn executive also said that while paying Apple 30% fee of all in-app transactions is far from ideal, the opportunity to attract new users from the Apple ecosystem is too attractive to pass up. That said, striking the deal was arduous, she added.

“Working collaboratively with Apple has been one of the best things that has happened to our app,” said Manghani. “[But] for every acceptance we’ve gotten many, many rejections as well. There have been many sleepless nights … It has taken us months.”

Stepn was founded in 2021 by Satoshi Labs. Past investors include Sequoia Capital India, Alameda Research and Santiago Santos, a former ParaFi Capital partner.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.