What is Stepn (GMT): The fitness app turning miles into money
Stepn combines play-to-earn mechanics with NFTs for a unique user experience. Will it take off?
- Stepn: A brief background
- Does the move-to-earn concept have legs?
- Move-to-earn: A contrary opinion
- Pricey kicks
- How does Stepn work?
- Where is Stepn jogging to next?
Equal parts blockchain-based GameFi platform and health and fitness app, Stepn has seen considerable uptake in a short space of time. With a range of innovative features and a $600m-plus valuation of its native GMT coin, you may have come across the project recently.
But what is Stepn (GMT) and how does Stepn work? Currency.com took a look at the fundamentals of the project and the Stepn cryptocurrency, with help from chief business officer Shiti Manghani.
Stepn: A brief background
Stepn’s parent company, Find Satoshi Lab, was co-founded in 2021 by Australian duo Jerry Huang and Yawn Rong. They were critical of the direction of play-to-earn metaverse projects such as Axie Infinity, which were facing eroding value, and Manghani said they “caught up over a beer to discuss what could be done to add value to the system”.
The two, equally concerned with promoting a healthy lifestyle and carbon neutrality and exasperated by the devastating bushfires that ravaged Australia in 2020, coined the term ‘move-to-earn’, a twist on the ‘play-to-earn’ phrase used by Axie Infinity and other metaverse gaming crypto projects.
After a recruitment drive in September 2021, the Stepn team won fourth place in the Solana Ignition Hackathon event, bringing investor interest and resulting in a public beta test in December 2021.
So far, things have only continued to grow. As reported by Currency.com on 5 April, Stepn made substantial gains in the first quarter of 2022. Sales of Stepn’s sneaker NFTs netted more than $26.8m in Q1, while unique accounts on the platform saw a consistent increase.
On Google Play, the Stepn app has more than 100,000 downloads (with a 4.0/5 rating) and it is ranked at number 27 on the App Store health and fitness chart. Clearly, Stepn is generating buzz.
Does the move-to-earn concept have legs?
Stepn is not the first mobile application to force us from the safety of our own homes. The location-based augmented reality game Pokémon GO became a global sensation after launching in 2016, with hundreds of millions of users at its peak.
Even the blockchain-based mobile app Triffic was using GPS technology to “monetise your movement” as far back as 2017.
But while Pokémon GO was firmly rooted in the Web 2.0 sphere and Triffic can be reasonably described as rudimentary, one gets the feeling that Stepn is not pursuing the move-to-earn concept using half measures.
From the backing of a venture capital consortium led by the American firm Sequoia and Folius Ventures of Hong Kong, to the support of Adidas vice-president Scott Dunlap, Stepn has institutional credentials and, clearly, a highly professional team of web and mobile app developers behind it.
Whether move-to-earn finds wider mainstream appeal is dependent on several things. A marriage between the multibillion-dollar and growing fitness sector and the multibillion-dollar NFT market sounds enticing, but managing NFTs and crypto wallets could prove too much of a hassle for the average fitness fiend, particularly for older generations that are more sceptical of blockchain technology.
Manghani is aware of these issues. “We think about it day and night,” she said. “We want to get to one million daily active users, and from where we stand today, to be honest, that’s not a challenge.” Manghani believes that clean user interfaces and rental features (which circumvent the NFT-buying process) are key aspects contributing to user-friendliness.
Move-to-earn: A contrary opinion
Omri Lachman is the chief executive officer of LEAP, a next-generation sporting discovery and endorsement gaming platform which leverages Web3 and blockchain technology.
In Lachman’s opinion, “As a matter of principle, I don’t think people should be rewarded for accomplishing fundamental basic activities, as much as we don’t get incentivised for breathing or drinking water. It’s a good concept to encourage people to live better or be more healthy. That being said, there is a fine line between motivating and incentivising”.
Additionally, Lachman believes that “as part of move-to-earn being successful as a niche, the challenge of user experience will definitely become a bottleneck”.
But even though “it is not perfect”, Lachman did contend that “the move-to-earn buzz is a step in the right direction towards leveraging technological advancements and raising sports-participation figures”.
There could be one other barrier to user uptake: cost. The average price of a sneaker NFT was 14 SOL in early May. That was more than $1,036 at SOL’s 9 May exchange price, although as of 6 June the average price has fallen significantly to 4.5 SOL. At the top end of the spectrum, Sneaker #447473904 will set you back over $6,500.
Putting that into perspective, a pair of exclusive black Prada Polarius 19 LR high-top sneakers in the real world will set you back a little under $1,100.
Of course, Prada shoes don’t earn you passive rewards, and this high entry cost has yet to dampen Stepn’s popularity. The GMT token continues to enjoy high trading volumes, including a recent 24-hour volume of $624.76bn, or 102% of market capitalisation.
How does Stepn work?
The first step in making the most of Stepn is to mint your sneaker NFT via the in-app wallet (SOL must be imported into the wallet to make a purchase). Users can select a range of sneaker attributes, including efficiency, comfort and resilience.
Users can also rent a sneaker NFT through the marketplace and share the rewards with the owner. Once your sneaker is equipped, you can start running and earning rewards in the GST utility token (30% of supply is set aside for rewards distribution).
Stepn profits from a tax applied to all in-app mintings and purchases, although “all assets in the Stepn app are owned by individual users and the majority of earnings in app are made by users”.
Your sneaker’s attributes all contribute to its energy cap. Since the rewards supply is limited, the energy cap is a critical factor in bottlenecking distribution.
The Stepn cryptocurrency economic model relies on two tokens. The Green Satoshi Token (GST) is the utility token used to pay out in-app rewards. The token has an unlimited supply but is burned whenever a shoe is minted, repaired or upgraded.
The Green Metaverse Token (GMT), with a maximum supply of six billion, is Stepn’s governance token and the primary store of value for Stepn investors. Running on Solana, GMT coin is valued at $1.02 as of 14:00 BST (UTC+1) on 6 June 2022, and is traded primarily on Binance.
Under a vesting schedule until March 2030, GMT’s supply is allocated as follows:
- 30% to in-app rewards
- 30% retained in the treasury
- 16.3% reserved for private sales
- 14.2% retained by the team
- 7% reserved for the Binance launchpad sale
- 2.5% given to advisers.
What is Stepn coin used for? GMT holders can stake their tokens to partake in voting rounds. Collectively, token holders voted to donate a percentage of tokens to a carbon-offsetting programme.
While rewards are primarily paid out in GST, users with level 30 sneakers and above, as well as certain other parameters, can earn rewards in GMT. A range of mechanics including a halving schedule contribute to decreased token emissions over time.
As is common for popular NFT projects, GMT has a very high trading volume. In a recent 24-hour period, the token saw more than $3bn of trading activity – almost double the $1.6bn market capitalisation at the time.
Maintaining the value of GMT is a balancing act, according to Manghani, who said that rampant growth “could potentially drag the token down to zero; people could cash out and burn”. To keep growth sustainable, Stepn reintroduced an activation code system within the application: the game is invite-only, and when the activation code system is in operation, people need a code to join in.
Where is Stepn jogging to next?
Judging by Manghani’s comments, a primary concern for the future seems to be one of balance.
“We have Axie Infinity as a pioneer of the play-to-earn economy, but there are mistakes that have been made and we have learned from all of them collectively,” she said.
Manghani does not want new users to simply become “liquidity for older players”, something Axie Infinity has been accused of. Rather, “we want all people, both new and old, to earn and profit as well as keeping the focus on fitness and health”.
How many Stepn coins are there?
The Stepn cryptocurrency (GMT) has a fully diluted circulation of six billion tokens, vested until 2030.
Who created Stepn?
Stepn’s parent company, Find Satoshi Lab, was co-founded in 2021 by Australian duo Jerry Huang and Yawn Rong.
What makes Stepn unique?
Stepn is a (so far) unique combination of a health and fitness app with play-to-earn mechanics. Put together, Stepn is a pioneer in the field of ‘move-to-earn’.