If you’re an Apple App Store user, then you’re probably aware of the recent legal drama surrounding the updates to the App Store guidelines. It’s a reasonably open secret that the App Store is designed to be at its core, more difficult for app developers to deploy their apps on than competitors' offerings, pushing for a “quality over quantity” environment to protect its user base.
With this push by Apple, we have just witnessed with the hammer coming down on the conservative social media app Parler following in the footsteps of Twitter and Facebook permanently banning former-U.S. President Donald Trump from its platforms. Apple and Google decided to remove the alt-right social media platform from its App Store and Marketplace. Both platforms “said the app didn’t do enough to moderate incendiary talk.” This move comes after the horrific Jan. 6 raid on the U.S. Capitol by pro-Trump mobs and concerns that Trump has used platforms like Twitter, Facebook and Parler to incite violence.
But discussions surrounding Apple’s App Store guidelines revolve around two types of mobile apps — those that collect user data and those that offer personal loans, which have preyed upon many consumers.
Guarding user privacy
Back in December, Apple implemented its long-anticipated privacy practice guidelines for app developers featured on its App Store platform. These new guidelines are Apple’s attempts at complying with the newly enacted privacy laws, including California’s Consumer Privacy Act, New York’s SHIELD Act and Europe’s General Data Privacy Protection Regulation.
Under the new guidelines, any app developer featured on Apple’s App Store must now clearly display on its product page: “(1) the kind of data that the developer [...] or any of its third-party partners is collecting, and (2) what the developer or its partners plan to do with the accumulated data.”
Personal loans
Apple and lawmakers have identified a major problem in the ecosystem, where apps have abused consumers through predatory practices. In the latest update to its guidelines, Apple has added revised rules for all personal and loan applications. Specifically, Section 3.2 states that “apps offering personal loans must clearly and conspicuously disclose all loan terms.” This includes apps being restricted to charging no more than “a maximum APR higher than 36%, including costs and fees, and may not require repayment in full in 60 days or less.”
These changes are yet another demonstration of how Apple cares about protecting its users from predatory lenders after a series of public debates spurred developer restrictions in the best interest of protecting U.S. citizens.
Back in September, Apple announced that it had “voluntarily adopted the policy and would block lenders offering higher rates from accessing Apple’s hundreds of millions of users.” As Apple spokesperson Fred Sainz said:
“The unfortunate reality is that Americans, and all too often low-income and minority Americans, are falling victim to predatory loan practices, and we wanted to do our part to prevent this opportunistic behavior. By implementing the widely adopted standard set by the MLA [Military Lending Act], we can ensure we are protecting not just our service members from predatory loan terms, but our entire App Store user base all over the world.”
Last year, lawmakers introduced a bill that would take the 36% cap to all borrowers nationwide, ultimately removing the 400%+ annual interest rates that essentially anyone can offer. In other words, if your app allows for personal loans to be made through a phone, the lender cannot offer users an APR beyond 36%, otherwise, it’s considered to be predatory.
Simultaneously, Senator Sherrod Brown asked Apple to apply the 36% limit to any mobile apps that offered personal loans on its devices:
Last year, I asked @Apple to ban predatory payday lending apps.
— Sherrod Brown (@SenSherrodBrown) October 5, 2020
Now, even Apple is taking a stronger stance against abusive payday lenders than Trump's @CFPBDirector Kraninger - whose JOB is to protect consumers.https://t.co/xVq0CYq8v4 pic.twitter.com/6VYh7zhLAS
Apple’s hunger for “quality over quantity” when it comes to bringing developers to its App Store is something that should be applauded — and adopted in cryptocurrency. Financial inclusion means providing individuals with more access to these types of resources without restricting decision making to any one entity or institution.
Satoshi Nakamoto’s original idea of participating in a decentralized system that provides financial inclusion and equality to all has expanded into some pretty cool projects. But it has also made the rich richer. This is why Ethereum’s time seems to be running short and why DeFi is on the rise.
Digital currency is here to stay, and its survival is dependent upon our passion for participating in an ecosystem that allows for us to maintain control over our money but also help influence how that ecosystem grows to better protect us while encouraging transactions of all kinds.
Why do we need to implement an “Apple-like” App Store for the future of DeFi, bridging the gap between Ethereum and DeFi? Let’s look at the current industry drawbacks.
Yield farming needs to be scaled fast
Yield farming allows farmers to leverage smart contracts and protocols to get maximum returns on their tokens as they move their assets around using different strategies that involve offering liquidity and lending. However, while it has evolved into a mainstream DeFi practice, it certainly still presents the potential for smart contract bugs, sudden liquidation, or the obvious — token devaluation.
Since yield farming relies on the open-source nature of decentralized finance, the possibilities of vulnerability are endless. Compare it to the 400% APR history that the federal government mandates, except for one thing: Apple is already ahead of the curve. It sees what states are doing, implementing the 36% APR, and it is being proactive, rather than reactive.
Quality over quantity. Apple builds for the long-run. It doesn’t wait for law enforcement to come in; it makes those decisions ahead of time, regulating its ecosystem before lawmakers have the ability to weigh in.
By taking Apple’s approach, it’s proof that “quality over quantity” works. What the industry can look forward to is the slow build as the DeFi ecosystem continues to grow and flourish, while Ethereum DeFi enthusiasts understand the hard reality check ahead.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.