Stable Tokenomics is key – Pandaily | SehndeWeb

If I had to pick the hottest Web3 project these days, StepN is the one. Basically, StepN is a web3 application that allows people to earn virtual money by walking, jogging or running outdoors. In short, it is a “move-to-earn” system.

How it works?

StepN is an invite-only game. A person can earn an activation code for every 10 units of “energy” spent (I’ll introduce what energy is later), and each user can only hold one activation code at a time, until it is used. The invite-only setting creates a barrier for people to join the game and naturally fosters the needs of the “community”. I first joined a group chat related to StepN because I was trying to get an activation code for my friend. Community is at the heart of a Web3 project, because community generates consensus and consensus generates coin value. The team does not guarantee that the invite-only system will be permanent, but I assume that at least in the currently rapid growth phase, the team will maintain a shortage of qualifications needed to join the game.

After successfully registering, users must purchase NFTs in the form of virtual sneakers to earn energy. The amount of energy increases when you have more sneakers, but not in a linear fashion. By design, you will receive two energies if you have one pair, four for three pairs, nine for nine pairs, 12 for 15 pairs, and 20 for 30 pairs. This is the first “wow!” design in my eyes. One energy equals five minutes, and you can only earn his GST game tokens as long as you have energy left. Connecting the number of users of Sneakers purchased with Energy stabilizes tokenomics. The non-linear design pushes users to buy more sneakers to lengthen the time they can earn, and since more sneakers means a higher cost to spend, community users also have a greater incentive to maintain the price of TPS stable at a high level.

Since new users must start with a Sneaker to earn tokens, the price of a Sneaker has been steadily increasing. I signed up on March 25, when the floor price was around 8 SOL. I decided to hold out for a moment. This might be one of the worst decisions I’ve ever made, because when I finally decided to join the game last week, the floor price had reached around 10 SOL.

There are several ways to categorize sneakers. The simplest is based on their optimal speeds for earning GSTs – walker, jogger, runner, and trainer. Of these four, the trainer is special because it has no speed restrictions. By name, the runner has the highest requirement for the user’s speed, i.e. 6 km to 10 km per hour, and its price is comparatively lower, but its efficiency in earning GST is the highest. Of the four types, the Coach costs the most, unsurprisingly.

Another categorization is based on rarity and quality. There are five levels. A higher level means a higher price and also higher scores on attributes that will directly impact a user’s earnings. The four attributes are:

  • Efficiency: Decide how much TPS you can earn from your run
  • Lucky: determining the frequency and quality of a Mystery Box drop
  • Comfort: this function is still in development, but could be related to the minting of GMT, the governance token on StepN
  • Resilience: Affects the rate of durability degradation. In short, users have to pay GST to “fix” their sneakers after running for a while, and resilience decides how much you have to pay to recover the durability of your sneakers.

Another point about Sneakers worth noting is their level. Each pair has a base value for each attribute at level 0, and each time the user increases the Sneaker, the users will be allowed to distribute certain numbers to the attributes according to their needs. The upgrade process costs GST.

When you are done shopping for sneakers, you are now ready to race and win. The amount of GST you earn depends on several considerations: Efficiency Attribute, GPS Signal, Speed, and Luck. There will be a cap of GST a user can earn per day and the cap is decided by the highest tier among all your sneaker collections.

Similar to other NFTs, StepN enables the crafting of shoes. Users can create a new Sneaker from two existing shoes in their possession. Each pair can be struck up to seven times, and the strike fee will be higher with a higher number of strikes. What’s interesting here is that it’s similar to a “blind box” – the same combination of qualities and shoe types can result in a different new result, which makes the whole process more fun.

In the StepN whitepaper, besides single-player racing, many other modes are still under development, including a marathon mode for people who want to race and a background mode for people who can win through their step count from the Health Data app on their mobile device. Social media features are still under development. The sneaker rental system is expected to be available this summer for users who hold a pair of shoes above level 10, which could successfully lower the barrier to entry.

Tokenomics

I can tell how much effort StepN put into designing the token system. Axie Infinity, as the former king of GameFi, has recently been caught in an inflation trap. A stable tokenomics system is the basis of an ever-evolving GameFi project.

Similar to Axie Infinity, StepN adopts a dual token system: the GST game token and the GMT governance token. GMT has a limited supply capped at 6,000,000,000, and 30% of the total supply will be rewarded to users through movement participation and governance. Its token system borrows from Bitcoin’s successful mechanics, including the “halving” and “difficulty bomb”, to keep supply sustainable and return commensurate with difficulty.

Compared to GMT, GST is a much more widely used, traded and liquidated token at StepN. By design, GMT cannot be hit by users without reaching level 30 or having three energies. However, GST can be earned from the first minute of your ride. While you’re earning GST, you’re also spending GST all the time – upgrading your shoes, fixing your shoes, opening a mystery box, etc. Frequent use of the GST keeps the integrated financial system active and effectively maintains the value of the coins. The price of the GST went from $0.1 to $4.7.

Why StepN Stands Out From Web3 Fitness Apps

There are many reasons for the success of StepN, at least so far.

First, StepN has created a compelling anti-cheat system. Whether you keep your phone on your dog or try to cycle instead of run, StepN can capture your cheating behavior and recover your earned TPS or even freeze your account. Also, to prevent people from opening two accounts but only buying one Sneaker to switch between them, StepN designed a cool down period. During the cooling period, users cannot use this Sneaker.

Second, it’s a beginner-friendly, hands-on experience for people to upgrade from Web2 to Web3. The win-win model was first introduced by video games. The game isn’t for everyone, but walking or running is much broader, giving StepN a huge audience base. Also, StepN focuses on mobile devices, which most people use to get online every day. Additionally, StepN attempts to relax the barrier for people to use Web3-specific features. Its built-in wallet allows people to deposit crypto from centralized exchanges directly without Googling “how can I open a crypto account”.

Undoubtedly, the StepN community plays a huge role in promoting the app. Discord and WeChat groups are very active and friendly. Beginners can find guides everywhere online. Many people even help their parents to buy sneakers and join the game. Their parents don’t need to know what blockchain is, just click start on the app, exercise like usual and win.

I have been using StepN for almost a week. It motivates me to run more successfully and the whole user experience design is quite smooth for me. As long as its tokenomics remains stable, I am very optimistic about StepN’s future. Web3 fitness projects have become a trend these days. BikeRush, a ride-to-earn project, closed a second funding round of $6.5 million. Move-to-earn could lead a new wave to push Web3 to a wider audience.

Potential risk

Currently, since the size of its users has grown rapidly and steadily, inflation risk has not yet been an emerging concern. However, when user growth stagnates, the real challenge will come. Based on the current design, a single Sneaker can bring infinite income return to its possessor. When the user pool does not expand further and market liquidity drops sharply, infinite return can destroy the financial framework in a disastrous way, which is what happens with Axie Infinity.

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