STEPN, Move To Earn Pioneer Or A Long-Term Investment To Avoid? Can It Survive A 98% GST Price Crash?

3 min read

STEPN is regarded as a pioneer in the emerging Move-To-Earn sector. However, the project is also facing concerns about its long-term sustainability following a 98% crash in its Green Satoshi Token. What does STEPN need to do to turn things around?

STEPN has been off to the races this year. The app rewards its users with crypto tokens for walking, jogging or running and in December launched a new game genre called Move-To-Earn. STEPN uses a dual token model like many of the play-to-earn games. Green Satoshi Token (GST) is the game utility token and Green Metaverse Token (GMT) is STEPN’s governance token. GMT can be traded for Solana’s native token (SOL) or the USDC stablecoin. Early adopters of the game were eager to share in the fun and brag about their profits, with some claiming to make $200 a day exercising outside.

The GST price started rising in March amid STEPN’s first wave of hype and peaked at around $9 on April 28th before collapsing along with the rest of the crypto market. The price fell further on news of STEPN’s plans to exit China on July 15th, and GST is currently down around 98% from the April high.

Too many GST tokens were also a factor in the recent price drop. The circulating supply of GST increased from 20,000 to nearly 50,000 in May.

Cyclical Structures have proven to be Unsustainable

Meanwhile, a look at STEPN’s token shows that, like most Play-T0-Earn (P2E) games, it adopts a cyclical structure – motivating users to earn tokens first through in-game alerts, then encouraging them to spend more to earn more money in the future. New players must invest in NFT sneakers and are then are incentivized to earn in-game tokens that allow them to earn more NFT sneakers, which they can rent or sell on the secondary market grant.

In the past, these systems have proven to be unsustainable. One market analyst has already said STEPN is not scalable or sustainable. If no new external capital is poured into the project, the cycle will eventually produce a declining token price and fail to attract new users to continue the process. Once that happens, the cycle runs out.

How can STEPN turn things around?

Many new projects implement a cyclical structure in their early stages for bootstrap growth, but what they do after this warm-up period is critical for long-term viability. For now, it’s essential to recognize STEPN’s pioneering role in the emerging monetization field, where projects seamlessly link the real world to the virtual world, using Web3 applications to push users off their couch and into the real world.

STEPN encourages users to get outdoors and adopt a healthier lifestyle. Future innovations in the space will build on this idea and follow the same path of integrating the real world into Web3.

A sustainable monetization model will require constant updates to keep it fun and engaging while also attracting a steady stream of new users. Delivering sustainable returns in terms of time and money invested by users will also contribute to long-term demand.

The STEPN development team will have to pay attention to the project’s token and ensure that the price of the token remains valid. STEPN also has to ensure that it doesn’t take too long for new users to break even.

STEPN understands the challenges ahead

There are signs that STEPN understands these challenges. As analysts have noted, the company is adjusting the required GST for each shoe mint in response to fluctuating GST token prices. It also adds limitations like a 48-hour cooling period and a “parent shoe” NFT minimum before new sneakers can be minted. Meanwhile, STEPN has yet to push for staking, which should help them maintain a fair price for its GMT token.

All of this suggests some forethought to make the game sustainable in the long run. However, the team will have an uphill task to keep up with its ever-expanding user base by ensuring the game provides an enjoyable and rewarding experience.

At this time, it is unclear if STEPN will be able to do this. There is a risk that the project faces something affecting the current crop of P2E developers, which is the ability to understand the consumer behavior and needs of actual players fully. They have targeted investors and people interested in making money, not real users who will stick with it and stay in the game for the long term.

Overall, it’s still very early to make money, and still has time to adapt. Recently STEPN has also released the latest upgrade 0.7.2. With the challenges its facing, more upgrades could be in the works.

stepn
StepN 0.7.2

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