What would encourage you to exercise more? The obvious answer, say the founders of STEPN, is cold hard money. Their money-making running app offers its users cash rewards to become more active and has already convinced millions of people to sign up in just a few months.
The principle is simple enough, explains Yawn Rong, co-founder of STEPN. “We wanted to encourage people to change their behavior and exercise more,” he says. “It’s a way to share the benefits of Web3 technologies with a new and diverse group of fitness enthusiasts.”
To participate, users must download the STEPN app and then purchase a virtual pair of sneakers in the form of a non-fungible token (NFT). Once they’ve done that, STEPN’s GPS tracking and motion sensor technology will track out how far they’ve traveled and be rewarded with tokens every time they go for a walk, jog, or run. These tokens can then be spent in-game, for example on upgraded sneakers, or paid out in hard currency.
The possible rewards on offer look attractive. Rong says the minimum users can expect to earn is $25 for 10 minutes of activity and some users make as much as $4,500 per day. But many people don’t take all the money with them, he adds. They use their earnings to acquire new NFTs within the game, trade with other players and choose to give some of their money to charities.
If this all sounds too good to be true, there’s a catch. To start playing, you need to buy those NFT sneakers, which are priced in Sol, the native cryptocurrency of the Solana blockchain, on which STEPN works. And they’re expensive: The daily price in fiat currency varies depending on the value of Sol, but the cheapest sneakers cost hundreds of dollars — and sometimes the entry-level price has risen well above $1,000.
In the coming months, STEPN hopes to introduce a sneaker rental feature to get around this significant upfront cost of joining. New players would rent sneakers from someone already in the game, splitting the income they earn with the sneaker owner until they earn enough to buy their own NFT sneakers. That would encourage more people to participate – and help STEPN enter new markets; it is currently most popular in wealthier countries like Japan, France, US and UK where users can afford that first NFT purchase.
For the time being, however, the barrier to entry of high initial purchase prices does not seem to deter people. Since the launch of STEPN last December, the app has signed up 2.3 million monthly active users, half a million of whom use the app on any given day. That has boosted the value of STEPN’s tokens, with trading volumes in its GMT governance tokens surpassing those of Bitcoin and Ethereum on certain days.
Indeed, STEPN is attracting significant interest in the world of cryptocurrency investment, with the tokens registering gains of hundreds of percent at their peak, albeit with significant volatility. While new cryptocurrencies have come and gone at a dizzying pace in recent years, some investors are betting that the move-to-earn principle underlying STEPN will give it a longer lifespan.
As for STEPN itself, it is demanding a 6% cut in its NFT trading costs, generating significant revenue for the company in a very short time – the company made a profit of $26 million in the last quarter of last year alone and has already a valuation of over $1 billion with some analysts.
Yet Rong and his co-founder Jerry Huang are not resting on their laurels. They view STEPN as a first step towards a broader Web3 offering, believing that users who get used to the concepts of cryptocurrency and decentralized finance will develop the confidence to participate more widely. “Users can expect more exciting developments from STEPN in the future,” says Rong. “The app has plans to integrate more socialfi elements into its platform and will roll out exciting features for non-native crypto users to ease their onboarding to the Web3 world.”
The founders also want to emphasize their green credentials. In addition to STEPN’s use of Solana, which is widely seen as a more environmentally friendly blockchain, the company is offering users the option to donate a portion of the profit pool to purchase carbon removal credits.
More traditional sportswear companies are taking notice. Last month, STEPN announced a partnership with footwear giant ASICS, which released a limited edition set of branded sneakers on the app. “The STEPN app is an incredible achievement in technological innovation and we believe ASICS’ immediate and long-term partnerships with them will help millions of people around the world achieve a healthy mind in a healthy body,” said Joe Pace , head of business development at ASICS.