Move-To-Earn | No-Hype Analisys

The latest hot topic in the Crypto Space without a doubt is Move-To-Earn and most of all the STEP'N project which has been red hot. Here is my No-Hype analysis of what's going on.

So the basic idea behind Move-To-Earn is that users of the app are able to earn cryptocurrency which has a value attached to it for their daily walking or running activity. There are many projects that do this but STEP'N is the one that recently got crazy popular. For as far as I know, Actifit which runs here on Hive was one of the first to come up with this concept.


STEP'N Explained

I have not tried Step'n yet but it's pretty clear how it all works. Basically, Step'n is identical to Axie infinity but instead of Axies you have Virtual Shoes and instead of playing the game you walk or run. There is the governance token GMT which is used to buy shoes/level them up, and it also collects trading fees which are put inside of the treasury. GMT can also be earned by shoes that are at max level from what I understand. The GST (Green Satoshi Token) is the utility token used to repair shoes and it has an unlimited supply.


The Theory: Economic Value Of Walking/Running!

I can fully get behind the initial idea of monetizing the economic value of walking in that it is interesting for advertisers (Shoe Companies / Health Products / Diet Programs / ... ) to pay to get direct access to a target audience. In a way similar to what Basic Attention Token is doing directly paying a big part of what advertisers pay to the ones who get the advertisements on their screen. There is also some potential value for Insurance Companies to verify and give discounts to users that have a more healthy lifestyle even though the system likely is too easy to cheat.

For as far as I know, this is the main economical value where real earnings for users of Move-To-Earn dapps come from.


The Reality: Last One to Hold The Bag Ponzi Pump & Dump!

The reality however is that all earnings right now come from new players that are entering hoping to be able to make money in their investment. The demand for GMT & GST also comes from players that want to play the game and level up their shoes to earn more. This is a classic crypto Ponzi model where there is a positive feedback loop at the start with more demand than supply which pushes prices up making old investors earn and causing more players to want to get in pushing the prices up more. Once the point is reached where not enough new players are coming in, the positive feedback loop turns into a negative feedback loop with the prices starting to drop which decreases the interest and demand causing prices to crash even more.

It has been seen time after time again that retail investors just can't resist the 'Last One To Hold The Bag' model. It's the same thing with Axie, Meme Coins, Gamestop Stock, Most Play2Earn Games... STEP'N feels like the same story all over again. Right now only players that have an activiation code can get in making it somewhat of an exclusive club also because shoes are ridiculously expensive given the demand of players that want to jump on the hype.


STEP'N Youtube Shilling & VC Investors

There seem to be quite a lot of Venture Capitalist investors in the Step'n Project who managed to buy coins at really low prices but have their coins still locked up. They are up over 1000x but their coins only will start to unlock in 2023.

There are also many YouTubers who are shilling Step'n as they managed to get in early (possibly as part of a sponsorship deal) talking about how much money they are making just from walking or running. In the end, they will most likely be the ones that really end up earning at the backs of their followers and retail investors.

Move-To-Earn Space

There are already a ton of dapps that try to do some kind of Move-To-Earn model and pretty much all of they got a big boost because Step'n exploded as people are buying them in anticipation for users to expand their horizon. It can also be expected that a lot of Step'n clones will be made and there is no guarantee that STEP'N will be the winner in the end in this space.

The only Move-To-Earn dapp I personally have experience with is Actifit on Hive which does it differently as the value they are able to give users comes from their Stake in Hive allowing them to give Upvotes that are worth quite a bit. I'm not sure how things are now, but I was not a fan of the obligated Actifit Spam Posts which were flooding the blockchain. Actifit also created somewhat of a community which is nice to see even though most likely are just there for the upvotes also allowing to make easy shitposts without much effort to get normal upvotes. One of the main reasons why it never really took off is because the actual earnings were more realistic and not ridiculously high.


Conclusion

GMT right now has a total circulation market cap of a whopping 20 Billion Dollars which is totally crazy as none of the tokenomics are actually based on what potentially could make it sustainable with outside money coming in from potential advertisers. The app itself looks quite good and it's an effective way to get retail into crypto also doing great things for their health. While it is hard to say how high it all can go, it's pretty sure that once the tipping point is reached of not enough new people coming in, things will come down quite hard. With Shoes already costing 1000$+ it feels like new investors already are the exit liquidity for old investors. If the crash doesn't happen soon, eventually a ton of coins from VC Investors will unlock which will create quite a lot of selling pressure. At the same time, the most profitable opportunities in crypto have been the meme coins an ponzi scemes which at the same time got many totally wrecked.

Play2Earn Games I'm Currently Playing...

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16 comments
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I got an activiation code for Stepn and it runs in my phone. I didn't buy and NFT of course but wanted to see it. The space is huge and I love @actifit . We have a better app here on hive and I hope there is plenty of spillover from all the move to earn attention.

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From what I understand, STEPN will start working with a system where shoes can be rented so not everyone needs to buy one. Regardless it won't be a sustainable system as there is no real revenue coming in. Actifit for sure will benefit from the current hype and it already shows in the price. I guess many are going to want to optimize and use all the Move-To-Earn apps all at once one way or another.

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i never tried Actifit, any advice?

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My advice would be to create a separate hive account for it as you need to make mandatory shitposts in order to get the upvote rewards. It used to be quite profitable in the past, I'm not sure where it is at right now as I stopped using it a long time ago. In the end, it's mostly about the upvotes and $$ and I don't really need the motivation to walk or run. If you are into it, the community around it is mainly the biggest benefit and motivation you can get I would say knowing others are also working on their health.

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as you said, it's a classical ponzi. I stay away from it.

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Indeed, the main question remains how early it is and when it will eventually start to collapse. I try to stay away from those games unless it's clearly very early which for STEPN at a 20 Billion dollar fully diluted market cap surely is not the case

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I messed up by missing out on getting into STEPN, due to being away for some time and missing the binance launchpad - not feeling great about that.

That said, it doesn't look too sustainable, it just doesn't hold much value.. Many projects have that problem, but at least have the value of a fun game attached, or whatever else - here that isn't really the case.

!1UP

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That sucks if you planned to get in that early. I saw it for the first time when the price of GMT was below 1$ as it was shilled by some youtube channel. Had a look at it, quickly saw the ponzi and didn't want to gamble on it taking off like it did since it's just obviously not sustainable long-term.

Good luck not missing out on the next big opportunity you come across.

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It's always the way in crypto. Exponential systems that benefit a few and crush the many while claiming to be different than legacy systems.

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In most cases yes, that's one of the reasons why I like the Gambling Dapp Coins as the earnings come from people that use the product. Only if the entire move-to-earn space switched to earnings coming from advertisement money that comes in it would be sustainable. The problem there is that earnings would be minimal (Like using brave browser) which wouldn't make a difference for those already motivated to walk/run while most of the current userbase would move to the next scheme where they potentially can make money.

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Crypto's reputation that its all a scheme to make people rich is a problem for this sort of thing. I haven't looked into this project in particular but the tagline for most crypto projects that could go mainstream is basically do this thing and get crypto! With the implication being that all crypto is something you want because crypto makes people rich and here's how YOU can get some.

Fitness projects should be able to mainstream themselves but when you see something like digital shoes flying up to $1000 right out of the gate, it's clear you haven't gotten to the mainstream audience but instead to crypto investors looking to cash out on the scheme.

I think there's two ways to do something like this. One is advertising as you've said and the other more powerful way that I haven't fully thought out yet is identity building model of slight scarcity, leaderboards, community outreach, etc.

This is basically like the models we've already had with other free web 2 platforms where people put great deals of time and effort to reach high on leaderboardsbecause they attach being on a leaderboard with their identity or with competition and engagement. Throw in an NFT that can be upgraded and eventually cashed out for small amounts that somehow help the community.

I don't know. I mean we're pretty close to the actifit now I guess.

Got me thinking though.

!LOLZ

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The reality however is that all earnings right now come from new players that are entering hoping to be able to make money in their investment.

I agree with that. The value of the token can only be sustainable if a continous influx of new users join the platform. Therefore it has all the caracteristics of a traditional ponzi sceme.


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Yeah, it's often a thin line. I used to think the same when it comes down to Splinterlands and I still kind of do even though I more see the enjoyment of the actual game for most players. The valuation of STEPN though is totally retarded. It will be interesting to see where it will go as VC tokens only unlock next year and there is a big waiting list of players wanting to get in still.

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