STEPN Boom and Bust Cycle: A $5M Move-to-Earn dApp With Only 1 Active User

STEPN, the popular move-to-earn dApp, had just one active user today. Have users lost interest in getting paid to workout? Or is there a different story?

According to data from DappRadar, a tool that provides insight into decentralized applications, STEPN had just one active user. However, DappRadar defines an active user as a number of unique wallet addresses interacting with a particular Dapp’s smart contracts. It may not include the users who might just be exploring around without making a transaction in the smart contract.

What is STEPN?

Move-to-Earn was the talk of the town in around April 2022, and STEPN, powered by Solana, was the flagbearer. STEPN aims to incentivize users to live a healthy lifestyle. Users needed to buy a “sneaker” NFT to earn crypto. Different types of sneakers have different rewarding attributes based on the user’s physical activity.

The boom

The price of GMT tokens exploded by over 1900% from March to May. STEPN sneakers cost was as high as $1200. The high cost of entry was justified because some users reported earning over $1200 daily. 

The craze for STEPN and GMT was such that some runners in China offered substitute running to earn GMT for a commission. STEPN announced $122.5 million in profit for Q2 2022.

Gradually, things started to go downhill for STEPN. The cost to mint a new sneaker is around $4 now, according to Dune. The third quarter profits for STEPN are down 90% from the second quarter. Recently STEPN started to lay off staff. 

What caused the downfall of STEPN?

The crash of the Terra LUNA ecosystem in May had a domino effect and pushed the entire crypto market into a bear market. The price of Solana, GST, and GMT plunged as well.

The earnings for STEPN users decreased, resulting in users fleeing. Even those who had STEPN in their daily routine are moving on. Users also find the tokenomics responsible for the decline. It is structured in a way that they will have to sell their tokens in the market to claim their rewards. When they sell their tokens, the supply increases resulting in a decline in the token’s price.

Users are criticizing the game economy of STEPN by comparing it with Web2 games. They believe the team is not focused on making the game fun.

The STEPN team is bringing on some changes to add value to GMT. The STEPN community believes that the project has the potential to change the world and hopes for a revival. What are your thoughts about STEPN?

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