Stepn Founder Wants To Promote Healthy Body and Mind, but Skeptics Question the App’s Sustainability

Transfer-to-earn blockchain-based utility Stepn lately generated $122.5 million in earnings within the second quarter via its platform charges — which have made up a rising chunk of income, extra broadly. 

The corporate mentioned in a Medium publish it intends to leverage 5% of the proceeds to provoke a buyback and burn program of its inexperienced metaverse token (GMT), a governance token that acts as a retailer of worth. The announcement knowledgeable customers that the buyback and burn course of could take a number of weeks to finish to keep away from inflicting sudden GMT value volatility.

Within the meantime, Blockworks’ Empire podcast hosts spoke with Yawn Rong, co-founder of Stepn, in regards to the firm’s speedy progress and its efforts to shift from Web3 to Web2 to stay sustainable.

Rong mentioned Stepn desires to in the beginning promote a more healthy thoughts and physique way of life by encouraging every day train through token incentives. Whereas solana (SOL) is required to buy sneaker NFTs, for now customers can solely earn the inexperienced satoshi token (GST) whereas strolling, jogging or working. 

GST can then be transformed into GMT or USD Coin. The extra conversions, nonetheless, the extra it drives down the value of GST, leading to much less potential earnings.

As soon as Stepn enters its subsequent section, which could be within the subsequent six months, in keeping with Rong, customers might be able to earn GMT and commerce on a “fully purposeful” decentralized alternate (DEX) and market. Moreover, Stepn has an attire and water model within the works.

The upcoming buyback program could possible find yourself lowering the availability of GMT via scheduled burning. Moreover, the steadiness of the value of GMT might be depending on the variety of Stepn customers, and the variety of new every day accounts has been in decline since Might, in keeping with information from Dune Analytics.

Rong advised Blockworks that about roughly 30%, or 210 million, GMT tokens have been fully burned. And they’ll proceed to burn GMT till “we really feel it’s the time for folks to earn the GMT.”

The twin token system is supposed to have GMT incomes counterbalance GST incomes. GST has an infinite provide — it serves as an inflationary reward token that bears the brunt of the promoting strain from customers cashing out the rewards. GMT, however, has a provide of 6 billion tokens and accrues worth based mostly on in-app person transactions and in-game utility capabilities.

Mike Dudas, founder and basic accomplice at early stage enterprise capital fund sixth Man Ventures, which invested in Stepn, shared its religion within the app through a Stepn Telegram chat. “They’ve a roadmap and token mannequin that goals to make sure stability over time within the ecosystem,” Dudas mentioned, including it’s “very simple to name one thing new a ponzi scheme.”’ 

Dudas gave the impression to be hanging again at allegations from trade members that the app, simply six months previous, is a ponzi scheme or perhaps a rug pull ready to occur. Dudas added it’s harder to defend a product when “public dialogue isn’t actually nuanced,” and the corporate gained’t share the whole lot of a roadmap “with a whole lot of potential copycats ready to pounce.” 

Ryan Mullins, CEO of NFT (non-fungible token) sneaker sport Aglet, advised Blockworks he’s skeptical of how sustainable the Stepn mannequin is. 

“As soon as the hype dies down and the brand new inflow of gamers isn’t there anymore, it doesn’t work anymore,” including that he views it much less as a sport and extra about rewarding a wholesome way of life.

On Friday, Stepn launched a posts to handle the introduction of “well being factors” to extend the lifespan of sneakers, and even admitted that these mechanic modifications didn’t assist the value of GST.

Nor did they yield prompt outcomes.