Key Takeaways:
- According to analyst Mike Fray, the STEPN move-to-earn app is not scalable with its current model
- The analyst claims there are too many barriers to entry, the app is expensive and pays too much reward to be sustainable
- The GST token, which the platform uses to distribute rewards, is also plummeting.
YEREVAN (CoinChapter.com) – STEPN, the move-to-earn Web3 lifestyle app, has gained popularity. On May 3, 2022, the company announced it had acquired over 2.3 million monthly active users. However, according to analyst Mike Fray, the STEPN app’s model is neither scalable nor sustainable.
Created by FindSatoshi Lab LTD, the STEPN app rewards users who log their physical activity on the platform. To earn rewards while jogging, running, or walking, users must buy or rent STEPN sneaker NFTs. The platform offers rewards to users in the Green Satoshi Token, aka GST token.
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In addition, the project offers the Green Metaverse Token (GMT), which has a fixed supply of 6 billion and serves as the governance token for STEPN.
Stepn app is too exclusive for its good, Fray says
One of the biggest issues that analyst Mike Fray points out is the barrier to entry. New users cannot enter the app unless they have an activation code. The company bots send a code every 12 minutes on the official discord channel, but the sheer competition and demand make it almost impossible to grab one on time.
As a result, people have resorted to selling activation codes on Twitter for those desperate to get in.
Many of those who manage to get in by somehow acquiring an activation code hit another roadblock. As stated above, users can only earn GST tokens after buying one of the available NFT sneakers. However, not everyone can afford it.
As Fray points out, one would need a few hundred dollars to start. At the time of writing, the cheapest sneaker NFT on STEPN costs 11.8 SOL or around $500.
Moreover, the option to rent a sneaker, which the company had announced it would offer, is not active yet. So people who thought they could just rent an NFT and share the revenue with the owner get disappointed upon entry.
In addition, there is no easy way to figure out which sneaker you should buy. Since they mostly look the same and have similar features, it would be difficult for an average person to make the right choice. Too complicated for a company that promotes a “simple” way to earn money.
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STEPN pays over $100 a day. So what will happen in the long run?
It is no secret that some people have made good money on the STEPN app despite the barriers to entry. To provide an example, Fray cites a video by Sebbyverse on YouTube. According to the host, he earned over 28 GST tokens or $104 by simply walking for 15 minutes to get dinner. Walking back from dinner earned him $115.
If the app pays these kinds of returns, Fray thinks STEPN will not be able to sustain itself in the long run.
“And this is why people are paying hundreds and in some cases thousands of dollars for NFT sneakers. They can get the return on what is essentially an application fee very quickly if they play it right. There is absolutely no way this is sustainable at these levels,”
the analyst argues.
Since the app pays rewards in GST, the market price of the STEPN crypto is very important. However, the price of sneaker NFTs will eventually drop as the GST collapses, thanks to such outflows. As a result, people will not get a high return on investment (ROI) like they currently do.
However, the analyst does see a chance of this working in the long run if the company introduces the option to rent sneakers soon. People will then get an affordable way to use the app and earn rewards, keeping STEPN afloat.
