One of the hottest crypto categories this year has been the Move-To-Earn sector. The M2E leader, STEPN, has experienced rapid user growth in 2022, but will that growth continue?
The Move-To-Earn (M2E) fitness lifestyle trend has become very popular, as it rewards users for exercising. The leader in the space, STEPN, is a Web3 fitness application that allows users to equip sneakers in the form of NFTs. They can then earn Green Satoshi Tokens ($GST) by walking, jogging or running outdoors.
Players can also rent or sell NFT sneakers on the Marketplace within the app. The amount of $GST earned will be stored in the Wallet with a built-in Swap function.
STEPN brings users one step closer to reality through outdoor physical activity, making the “gameplay” of the M2E model more realistic. Beyond the framework of Web3, it created a fever pitch right in the early days of its launch with it’s unique way to play.
Green Metaverse Token ($GMT) is the governance token of STEPN. In late April, the GMT price reached an all time high after it was announced it would be listed on Coinbase. However, the price has since dropped considerably and app’s popularity appears to be dropping as well.
STEPN’s May New Daily User Growth Rate is Slowing
According to Dune Analytics statistics in May, the number of new daily STEPN users decreased from 18,000 to 13,000. Daily active users remain around 11,000 and GST is currently still in a state of break-even.
GST is generated every time a user starts jogging in the STEPN app, whereas GMT is a fixed token. As the player’s exercise increases, a certain amount of GST will be released. Once the user reaches the highest running shoe level, (level 30) and the maximum attribute, the shoe repair fee becomes the only fee. Thus, shoe repair creates a permanent burn mechanism that balances the GST supply.
As the number of players continues to grow, more new GSTs will be created. This will lead to GST inflation and ultimately, devaluation. When the user’s reward is less than the cost of repairing the shoe, they will eventually stop repairing the shoe and stop using the app. At that point, STEPN will face the risk of losing users.
GMT tokens withdrawn from STEPN
In the last 30 days 116 million GMT tokens have been withdrawn, which equates to about $182 million. There are also new competitors emerging in the M2E space.
In order for STEPN to be successful for the long term, the number of mass players will have to be larger than the number of players to invest and make a profit. Even if STEPN wants to harmoniously combine the two elements of GameFi and SocialFi, the running itself is still boring for some users. STEPN will therefore need to step up the attraction of players more to the social aspects of the platform.
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