‘Move-to-earn’ StepN, a new Solana app, is the newest crypto gaming Sensation-2022
Skeptics, however, dispute its long-term viability and if it can even be called a “game.”
StepN, an app that allows users to walk and run to earn tokens or say move-to-earn, has swiftly become a household name in the world of play-to-earn blockchain gaming, or GameFi, since its launch in December. StepN’s co-founder Jerry Huang recently told TechCrunch that the app now has two to three million monthly active users worldwide.
That figure is nowhere like the hundreds of millions of players seen in popular web2 games, but in the crypto realm, it’s a significant achievement for a five-month-old programme. The market valuation of StepN’s native token GMT was roughly $860 million as of May 22.
StepN, which was founded by Huang and his co-founder Yawn Rong in Adelaide, Australia, had its premiere in October at a Solana hackathon. The event’s visibility helped it land its first group of beta users after it placed fourth. Two months after its formal introduction, awareness about the programme that allows users to earn money by remaining fit had already travelled around the blockchain world. Despite the lack of a flashy advertising campaign, a large number of people signed up.
StepN grew so quickly in a few of weeks that the company had to limit the number of daily registrations. According to Huang, tens of thousands of new users join the move-to-earn STEPN app every day.
The project was first self-funded by Huang, a serial entrepreneur, and Rong, a blockchain venture capitalist, because the two were “financially solid.” However, they determined in September that fundraising may bring in other valuable resources like collaborations and publicity. Before raising a $5 million seed round from Sequoia Capital and others in November, the founders met with over 100 investors and changed their pitch deck over 40 times.
“At the time, we didn’t have a product, and many investors didn’t comprehend what we were doing.” Sequoia succeeded. “Answering investor inquiries helped us improve the product to where it was later,” Huang explained.
For the time being, the rapidly expanding app appears to be self-sustaining. Trading fees generate $3-5 million in net profit per day, with monthly earnings of up to $100 million. Binance provided another round of strategic investment in April.
Is it a Game?
Some say that the success of StepN — and other play-to-earn blockchain games such as Axie Infinity — can be attributed to the fact that they are fundamentally financial products with a gamified twist.
To begin earning tokens and logging mileage on StepN, users must first purchase a pair of virtual shoes for at least 12 sol ($600) at the current market pricing. Although the digital shoes are in the form of a non-fungible token (NFT) that operates on the Solana network and Binance’s smart chain and can be resold, the admission price is still not insignificant for a casual player.
To level up, StepN users will need to collect new kicks over time. The typical return on investment takes around a month, after which users can start earning thousands of dollars each day, depending on their level, activity, and the current price of StepN tokens. In other words, the game has the potential to be highly profitable.
The gameplay of most existing GameFi apps is “simple and mindless,” according to several gaming veterans. Cute blob-like creatures fight in simple combat in Axie Infinity, for example. As a result, web2 gaming veterans are flocking to GameFi, promising to restore quality to the industry.
Huang strongly disagreed. “A lot of triple-A games place an emphasis on aesthetics and enormous budgets, but they’re not really that new when it comes to gameplay,” said Huang, who operated his own gaming business in China before migrating to Australia a decade ago.
“Many newcomers to GameFi are blindly pursuing triple-A productions,” he continued. “But if they weren’t already successful in web2, why would they be in web3? Some simple-looking games aren’t that simple behind the scene, for instance, how we design the economics of our app.”
Is It Sustainable?
Others dispute if play-to-earn is financially viable. Maintaining such a revenue model necessitates either the gaming being so compelling that users continue to play without cashing out their coins, or the app attracting new users who buy in to replace those who cash out. Play-to-earn has been compared to pyramid schemes by some critics.
The spectacular rise of Axie Infinity has come to an end. In a $150 million fundraising round last October, Sky Mavis, the Vietnamese gaming studio behind the game, was valued at $3 billion. However, after peaking at $160 in November, its token has lost nearly 80% of its value, and its sales volume has plummeted from $754 million to only $5 million.
For most of the latest move-to-earn game StepN’s customers, who are 20-40 year-olds from affluent countries like the United States, Japan, and Europe, losing a few thousand bucks isn’t the end of the world. According to Huang, crypto trading is illegal in China, which accounts for less than 5% of the user base. However, Axie Infinity’s players are mostly from developing nations like the Philippines and Venezuela, where many are risking a large portion of their money on the game, which has become a major source of revenue amid the COVID pandemic.
StepN presents a two-pronged approach to achieving sustainability. For one thing, it’s developing a price stabilisation mechanism to ensure that the cost of its coins is always at a level that makes the shoes affordable to new users while also preventing existing users from minting new shoes on the blockchain and selling them.
Its dual-token method allows for price manipulation. StepN will urge gamers to burn its “governance coin” GMT to mint new shoes when the price of its “utility coin” GST becomes too high and shoes become too expensive. As a result, the supply of GST rises, causing a sell-off and lowering its price.
Huang also said that StepN’s fitness component distinguishes it from Axie Infinity. “While users can earn money via StepN in the beginning, they will develop accustomed to remaining active over time, and will continue to walk or run regardless of financial rewards.”
“Many people do not consider StepN to be a true game. “They don’t consider it a running app because it allows users to earn money,” said Curt Shi, a founding partner at Welinder & Shi Capital and an early investor in StepN. “It’s difficult to pin down exactly what it is right now, but only time will tell.”
Is STEPN a Killer app?
The role StepN may play in evangelising blockchain to the rest of the world is another of Huang’s defences. A third of the app’s users, according to estimates, have never utilised blockchain services before.
“Many people might have used centralized exchanges like Binance and Coinbase to trade, but few know what a DEX [decentralized exchange] is, nor have they traded NFTs on a marketplace or owned a self-custodial wallet. We have the potential to onboard tens of millions of web3 users and I think this is something very meaningful.”
“I think people are paying too much attention to the [sustainability] issue,” the founder continued. “ROI might slow over time, but all games have life cycles. You also need to look at what value an app creates.”
The app’s momentum may slow down sooner than predicted due to falling cryptocurrency prices. Startups are being warned to prepare for a “crypto winter,” and industry giants like Coinbase are putting recruiting on hold. Blockchain apps that rely on gaining new users to drive up their economies may face additional barriers if customers lose faith in the market and are less eager to spend on tokens or NFTs.
But Huang finds a silver lining in the current downturn. “There was a lot of froth in the market. Now the bubble is bursting, our shoes will become more affordable, and only the [blockchain] apps with real use case will survive.”
“The market was clearly frothy, so it’s a good thing that [StepN’s market cap] has shrunk over the past few days,” said Shi. “To maintain an ultra-high market cap can be stressful for the team, and now the team will be focusing more on the product itself and we believe StepN will outperform in bear and will be a winner in the next bull market.”
StepN’s next move is to construct a social product around its token holder community, with a team of 70 employees spread across Australia, the United Kingdom, the United States, and Singapore. The issue now is to establish that it can continue to attract a steady supply of new runners.
Source: Techcrunch
Read more: https://blog.buyucoin.com/daily-crypto-news/move-to-earn-game/
Text source: BuyUcoin Blog
