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What is STEPN? Is it Actually Ponzi Scheme?

Why walk for free when you can get paid? At least that’s what STEPN, a “move-to-earn” NFT game, pledges. The Solana-based game was launched last year and has since caught on like wildfire. More than one million people have already downloaded it, and there are one million-plus fans across its social media platforms.

Some players report making more in a day with the game than what the average worker makes weekly in some parts of the world. The hyperbole surrounding this game begs the question: is STEPN real? Or is it a Ponzi scheme?

Is STEPN the killer Web3 app or a Ponzi-like scheme?

What's STEPN?

STEPN is a Web 3 game that pays users to walk, run, or jog. The game developers aim to “nudge millions” into a healthier lifestyle while helping slow down climate change and plugging users into Web 3.0.

Headquartered in Adelaide, Australia, STEPN is the brainchild of game producer Jerry Huang and entrepreneur Yawn Rong. It was created under their flagship company, Find Satoshi Labs.

STEPN’s meteoric rise has confounded anyone who’s been watching. Despite being around for half a year, it has already garnered an enormous fan base and user community, including 300,000-strong daily active users (DAU).

STEPN promises “handsome earnings,” and a cursory glance on the internet seems to point to that effect. One user reports earning $85 daily, with another making between $70-80 daily. And according to Rong, who talked to Forbes, some users are taking up to $4,500 home in one day.

How Does STEPN Work?

STEPN’s premise is simple: move and get paid. There are caveats, though. To get started, you have to spend on “sneakers,” — which are essentially NFTs. The game employs GPS tracking and motion sensors to track your movements and the distance you’ve traveled. Walk, run, or jog and earn GST tokens.

Here are some core elements of the game:

  • Dual economy

STEPN features the utility token Green Satoshi Token (GST) and the governance Green Metaverse Token (GMT). GST has an unlimited supply while GMT is hard-capped at 6 billion.

  • Play and Earn

To get started, download the STEPN app, sign up, create a wallet, and transfer SOL tokens (BNB is also supported) to your in-app wallet. Proceed to buy a sneaker from the in-app marketplace. After your 25% energy restoration, you’re good to go.

STEPN developers pledge at least $25 for just ten minutes of activity. You have two options with your earnings: cash out or upgrade your options inside the game.

  • Sneakers

Sneakers are the first requirement to participate in STEPN. Sneakers can be multiplied and upgraded, giving you an edge and more earning potential. Individual sneakers can cost hundreds if not thousands of dollars depending on rarity level.

  • Energy

Energy allows your movement to be recognized by the app and rewarded. You can increase your energy by buying more sneakers.

  • Play modes

Participate in the game through one of three modes.

  1. Solo Mode: Get equipped with a sneaker and earn tokens just by moving.
  2. Marathon Mode: Participate in weekly or monthly marathons upon registration 24 hours earlier
  3. Background Mode: You’ll still earn tokens for your “normal” movement during the day as long as you have sneakers in the app— but eligible steps will be capped at 3,000.

What’s a Ponzi Scheme?

A Ponzi scheme is one where early investors are kept sweet with the money coming in from new ones. Such a scheme unravels sooner or later when it’s no longer possible to attract new investors.

The first recorded orchestrator of a Ponzi scheme is Sarah Howe, who in 1879 created the fraudulent investment project “Ladies Deposit.” Other infamous masterminds are Charles Ponzi, who has the dubious honor of the scheme named after him, and Bernie Madoff, who bilked 37,000 people out of their money.

Now, crypto itself has always been dogged by the accusation that it’s a Ponzi scheme, thanks to the fact that while some investors have struck it rich, others have lost everything.

Is STEPN a Ponzi Scheme?

Then here comes STEPN, talking about paying people to walk. Surely there must be more than meets the eye?

Below, we offer arguments on why STEPN is not a Ponzi.

#1. Sustainability

A Ponzi will collapse sooner or later due to the unsustainable economic model underpinning it.

On its part, STEPN has gone out of its way to achieving sustainability in the long term. One way is by controlling the rate at which new users join the game. This helps prevent the game from falling off the pier, or so to speak, too soon.

The developers also encourage users not to cash out their earnings (which would drain the game’s cash reserves). There’s an emphasis on rerouting it back to the system — which can help the coin remain in demand.

Third, STEPN will halve the amount of GMT tokens minted every three years. It also employs a burning mechanism to reduce the number of tokens in circulation. These measures help stave off inflation.

#2. Value Proposition

STEPN presents a compelling value proposition.

It allows folks to do something they already do every day. Fitness has become more fashionable than ever in recent years. The global fitness industry is now valued at more than $80 billion. Exercising is not a fad; it’s a lifestyle. This can help STEPN stay relevant when all the hype about the game has died down. A key future revenue component could be partnering with sports and leisure giants like Nike or Adidas.

#3. Credibility

Several tried-and-true crypto exchanges have listed GMT. In the crypto world, top exchanges listing a coin is akin to giving it a seal of approval. To be clear, listing a coin alone doesn’t guarantee it being scandal-free in the future. However, we’d like to believe that such an exchange has done its due diligence before listing it.

Also, the game’s founders are well known. This is one metric to gauge the legitimacy of a blockchain project. By all indications, the team is committed to continually improving the product and sticking out in the long term.

Counterpoint: There’s Always Risk

While STEPN has a number of positives going for it, there is always a chance of a crypto project going to zero (as evidenced by the recent TerraUSD collapse).

The main concern most people have about STEPN is quite simple: at a certain point the economics of STEPN will likely be difficult to sustain.

It’s worth keeping all this in mind before purchasing a pair of virtual sneakers for thousands of dollars. There is at least a decent chance that STEPN’s token will trend down and you’ll never be to earn back the money you paid for your NFT sneakers.

This article is not financial advice but — this is extremely important when it comes to NFTs — never spend more than you’re willing to lose.

On the other hand if you view STEPN as a game (or a way to motivate fitness) then it could ultimately be rewarding regardless of whether you ever see a return on your investment. Just be aware that you are not guaranteed anything.

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Hope Mutie

About the Author

Hope Mutie

Hope Mutie is a professional writer and editor whose interests include fintech, cryptocurrency, and blockchain. She engages with crypto audiences by curating content that’s fun-to-read, educational, and offers unmatched value. Hope is part of the brilliant team at Go Full Crypto – a podcast and service that enables your transition into crypto.

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