StepN, an app by Solana that allows users to walk and run to earn tokens, has swiftly become a household name in play-to-earn blockchain gaming, or GameFi. Since its launch in December, the app has garnered two to three million active users worldwide, said its co-founder Jerry Huang in a conversation with TechCrunch.
That figure is nowhere the same as the hundreds of millions of players seen in popular Web 2.0 games, but it’s a significant achievement for a five-month-old service in the crypto realm. StepN’s native token GMT market valuation is around 860 million USD as of 22nd May.
StepN, founded by Huang and Yawn Rong, had its debut in October last year at a Solana hackathon. The event helped the app gain its first group of beta users after it came fourth. Two months after its official launch, buzz about the app that allows users to earn money by remaining fit had already swept the blockchain community. Despite the lack of an aggressive advertising campaign, a large number of people signed up.
StepN grew in a matter of weeks that the company had to limit the number of daily sign-ups. Huang said that tens of thousands of new users join the app every day.
Skeptics, however, doubt its long-term sustainability and if it can even be called a “game.”
A Financial Product with a Gamified Twist
Some say that the success of StepN, and other play-to-earn blockchain games such as Axie Infinity, can be accredited to the factor that they are essentially game-based financial products.
To begin collecting tokens and tracking mileage on StepN, users must first buy a pair of virtual shoes for about 12 sol (600 USD) at the current market pricing. The virtual shoes are in the form of NFT based on the Solana network and Binance’s smart chain. Though users can resell, the price of admission is still not trivial for a casual player.
In addition, users of StepN will need to collect new kicks overtime to level up. The typical return on investment takes around a month. Users can start earning thousands of dollars each day, depending on their level, activity, and the current value of StepN tokens. In other words, the game has the potential to be highly profitable.
The Question About Sustainability
Others question if play-to-earn is financially viable. Maintaining such a revenue model demands either the gaming being so engaging that users keep playing without cashing out their tokens or the app continues to attract new users who buy in to substitute those who cash out. Play-to-earn has been compared to pyramid schemes by some critics.
For instance, the spectacular rise of Axie Infinity has come to an abrupt end. In a $150 million fundraising round last October, Sky Mavis, the Vietnamese gaming studio behind the game, valued 3 billion USD. However, after peaking at 160 USD in November, its token has lost nearly 80% of its value, and its sales volume has plummeted from 754 million USD to only 5 million USD.
However, StepN proposed a twofold solution to maintain its sustainability in response. It is working on a price stability mechanism to ensure that its tokens’ cost always maintains a rate to make its shoes affordable for new users. At the same time, it doesn’t become so cheap that its existing players lack the incentives to mint new shoes.
It would achieve price manipulation via its dual-token system.
The other defense StepN offers is its role in evangelizing the crypto world. Huang said that about 30% of the app users have never used any blockchain services. “We have the potential to onboard tens of millions of users Web 3.0, and I believe it is quite meaningful,” he added.
“I believe people are overly concerned about the app’s sustainability,” the co-founder continued. “While ROI may decrease over time, all games have life cycles. You should also consider the value that an app provides.”
However, as people lose confidence in the crypto market and become less willing to invest in NFTs or tokens, any blockchain app that depends on attracting new users to drive its financials might face more roadblocks.
Though Huang believes that apps with real use cases will survive the market froth, they would have to prove that they can keep on attracting a constant stream of new runners.