Special thanks to @MapleLeafCap at Folius Ventures for the insights and contributions on this research.

DISCLAIMER: THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT A RECOMMENDATION TO PURCHASE TOKENS OR ANY OTHER ASSETS. ANY INVESTMENTS MADE IN THE PROJECTS OR ASSETS MENTIONED BELOW ARE DONE SO AT YOUR OWN RISK. THIS IS NOT FINANCIAL ADVICE.

Project Highlights

• STEPN features multi-layered social signaling: self-actualization, proof of workout, and pro-environment— Users can vote on how much of STEPN's treasury profit pool will be used to buy Carbon Removal Credits.
• Twitter: 354.9K followers, Discord 332.6K members, Telegram 196K members.
• The team finished 4th out of 500+ projects at the Solana Ignition Hackathon 2021.
• STEPN raised a $5M seed round co-led by Sequoia Capital and Folius Ventures with other leading investors including Solana Capital, Alameda Research, 6th Man Ventures, DeFi Alliance, M13, Corner Ventures, Sfermion, Zee Prime Capital, Lemniscap, Spark Digital Capital, MorningStar Ventures, Openspace Ventures, Solar Eco Fund and WelinderShi Capital. Notable Angel investors including Santiago R Santos and Asia Partner of Republic Zhen Cao.
• During its IEO on Binance Launchpad, STEPN reached over $3.6B staked by participants to access the $GMT token sale at the price of $0.01. $GMT price reached an ATH of $4.11 (411x return) on April 28th.
• Since launching in late December, the game has experienced steady growth. The amount of $SOL deposited by users has risen a remarkable 400% in March 2022.
• Fast growing & trend leader: Thanks to their active community, STEPN has crossed 100k DAU in March and its current run-rate is 200k DAU.
• STEPN has successfully integrated GameFi concepts into a SocialFi product, leveraging the advantages of both niches in order to build “a long-lasting platform fostering user generated Web 3.0 content.”

Overview

• STEPN is a Web3 lifestyle app on Solana and BNB Chain that allows users to equip NFT Sneakers and earn $GST token from walking, jogging, or running outdoors IRL.
• Players can choose to lease or sell their NFT Sneakers on the in-app Marketplace. $GST earnings are stored in the in-app Wallet, which has a built-in Swap function.

Figure 1: STEPN - Move to Earn

Humans need exercise. Countless studies have shown that regular physical activity is linked to a wide array of health benefits and well-being— emotionally, mentally, and physically. There is a growing cultural focus on health and wellness, but profiting off of this trend has been challenging for many brands:

• Running is one of the most popular fitness activities today, with over 110M participants in the US in 2017 (Source).
• 105M fitness tracking devices are estimated to be sold by 2022 (Source), even though research shows that most people stop using and forget these devices after a short period of use (Source, Source).
• Fitness and exercise generally have low retention rates; only 30-60% of registered gym members choose to extend their membership. STEPN offers a new financial incentive for people to get up and exercise (Source).
• Combining fitness tracking with blockchain tech, STEPN has established the move-to-earn model as a habit-forming machine. By harnessing the power of play-to-earn gamification, economics, marketing, and community building, STEPN is pioneering a version of SocialFi that emphasizes the importance of social and personal health.

Gameplay - Move to Earn

Solo Mode

Users equip their NFT sneakers and start their STEPN session to earn tokens through physical exercise. Users will also have a chance to receive a Mystery Box that contains Gems NFTs.

• Marathon mode (under development): Competitive mode, top leaderboard will receive $GST/$GMT as rewards.
• Background mode (under development): passive income for NFT sneakers holders for steps tracked by users’ Health Data mobile app, capped at 3K steps daily.

Figure 2: STEPN’s in-app UI

• $GST/$GMT is paid out for every minute of movement and depends on the following factors:
  1. Type of Sneaker: Refer to the Sneaker Attributes.
  2. Sneaker’s Efficiency Attribute ~ ↑ $GST earning.
  3. Sneaker’s Comfort Attribute ~ ↑ $GMT earning.
  4. Speed of Movement: To maximize earnings, users should maintain the optimal speed.
  5. GPS signal, internet strength and stability.

Figure 3: GameFi and SocialFi elements of STEPN

These gameplay features reinforce STEPN’s vision of SocialFi by:

• Connecting a community of individuals who share an interest in running and blockchain technology.
• Targeting both individuals and running groups with solo and competition modes.
• Targeting diverse demographics with various shoe attributes, health status, and running skills.
• Encouraging users to go outdoors and exercise to improve their health.
• Leveraging the self-actualization and competitive spirit of individuals within social groups (family or friends) through the PvP modes, communication, announcement and leaderboard features.
• Reaching broad user base through the availability on both iOS and Android with low quality requirement for devices plus a sneaker-renting system to onboard non-blockchain native users.

Figure 4: Move-to-earn blockchain-based projects comparison (Source: Coingecko)

Behavioral shift

According to the theory of Planned Behavior, certain products/services are designed to optimize the user’s intention to buy/use the products/services by targeting Attitude, Subjective Norm and Perceived Behavior Control.

Figure 5: Theory of planned behavior

STEPN directly targets the layer of Subjective Norm and Perceived Behavior Control to improve the attitude of users towards move-to-earn. This will help to “nudge millions toward a healthier lifestyle, combat climate change, and connect the public to Web 3.0” via the following initiatives:

Attitude (How valuable is it for the user?)

• Running with STEPN is beneficial (healthy mind and body).
• Running with STEPN is profitable (earning/selling tokens, token price appreciation).
• Running with STEP is trendy and fashionable (tech savvy, social signaling).

Subjective Norm (how do other people perceive it?)

Fitness, sustainability and charity are globally perceived as positive social values. STEPN allows users to signal their virtues in a variety of ways:

• Badge and leaderboard system.
• Application UI that displays Total Distance, Carbon Offset, Calories Burned, etc.
• Self-actualization via the customization and rarity of NFT sneakers.

Perceived Behavior Control (how easy and safe it is it to use?)

• The minimum running time per session is only 10 minutes.
• All-in-one mobile application with low hardware quality requirements, integrated Marketplace, Wallet, and Swap which removes almost every barrier for users.
• Renting system for users who can’t afford the NFTs or fear price volatility.
• Users with physical/health limitations can still participate with low speed sneakers and Solo Mode.

Sneakers NFT

Sneaker Types

Figure 6: STEPN’s Sneaker types

Sneaker Attributes

• Efficiency - ↑ $GST earning.
• Luck - Mystery Box drop rate.
• Comfort - ↑ $GMT earning.
• Resilience - Durability / Repair frequency.

Sneaker Quality

Figure 7: STEPN’s Sneaker stats

• Gems and Sockets: Sneakers can be upgraded by unlocking gem sockets to improve stats. Upgrading can requires gems, $GST and $GMT.
• Shoe-minting: similar to Axie breeding or Cyball mentoring.

Once the NFT Sneaker reaches a certain level, additional perks are unlocked such as shoe minting, lease function, gem sockets, $GMT earning, etc. At Level 30, users can burn $GST/$GMT/NFT to personalize the Sneakers.

Game Economy Model

Figure 8: STEPN’s game economy business model

Figure 9: STEPN’s Tokenomics, Minting & Burning activities

Figure 10: STEPN’s Token distribution & Vesting terms

• Until the end of 2022, Cir. Supply was still mainly on Binance Launchpad, which acts as the market maker for the $GMT token (411x at ATH).

Figure 11: $GMT token IEO information from cryptorank.io

Figure 12: $GMT Current trading price at $3.6 with the volume approximately $1.22B on Binance (Data as of Apr 29th, 2022)

• Since launching in late December, the game has experienced steady growth. The amount of $SOL deposited has risen a remarkable 400% in March, 2022.

Figure 13: STEPN - Daily deposited SOL (buy shoes)

• STEPN differentiates from Axie's model by widening usage applications for the $GST token. The $SLP token in Axie Infinity was once primarily utilized by breeding new Axies. Eventually, supply outstripped demand, causing the token's price to drop.
• STEPN addresses this issue by making its sneakers degradable. $GST is used to pay for in-game activities like repairing, minting, upgrading resulting in token burn / deflation.
• As the user base goes through its initial high growth phase, most new $GST token issuance will be absorbed by the burning of tokens to create new sneakers, which supports the utility token price. When user growth eventually plateaus/declines, the demand for new sneakers will slow/diminish, making $GST increasingly inflationary over time.

Farming $GMT but burning $GST for repairs is intentional. Supporting $GMT is vital so the game retains value, and adds an incentive for users to level up to level 30 for superior ROI.

SocialFi will be an essential component of the economy; incentives such as spending $GMT to customize sneakers or collaborations with other projects & brands and event-based marketing (e.g. Run to earn voucher, Run for IDO allocation, etc.) will encourage users to mint sneakers and run for reasons other than the financial ones. This would all serve to increase $GST burning.

Partners and Investors

STEPN raised $5M in a seed round co-led by Sequoia Capital and Folius Ventures with the participation of Solana Capital, Alameda Research, 6th Man Ventures, DeFi Alliance, M13, Corner Ventures, Sfermion, Zee Prime Capital, Lemniscap, Spark Digital Capital, MorningStar Ventures, Openspace Ventures, Solar Eco Fund and WelinderShi Capital with prominent Angel investor of Santiago R. Santos.

Figure 14: STEPN’s Partners and Investors

Advisors

Figure 15: STEPN's board of Adivsors

• Scott Dunlap: VP at Adidas, GM/CEO at Runtastic GmbH.
• William Robinson: Head of Accelerator at Alliance DAO.
• Jason Kam: Founder of Folius Ventures.
• Santiago R.: Web3 Investor, formerly worked at JP Morgan, Elysium Health and ParaFi Capital.

Team

Figure 16: STEPN's team members

Jerry Huang (Co-Founder)

• Gaming veteran who developed several high-ranking games on App Store.
• Former Co-Founder at Falafel Games.
• Computer Science background.

Yawn Rong (Co-Founder)

• Blockchain incubator and crypto angel investor.
• Former Business Ambassador at Algorand, SA Representative at Blockchain Australia and Co-Founder of Crypto SA.
• Advertising, PR and eMarketing background.

Jessica Duan (CSO)

• Experienced in design, operation, strategy management, client consultancy, marketing and BD.
• Former Co-Founder at Soko Design studio.
• Architecture background.

Ryan Turner (Lead Designer)

• Experienced in Illustration, Graphic and Interior Design.
• Former Founder at Malicious Delicious.

Community

For context, here are STEPN’s social stats alongside other prominent move-to-earn or fitness Web3 projects:

Figure 17: Social media statistics of STEPN and prominent move-to-earn or Fitness Web3 projects (source: Twitter, SparkToro, Discord, Telegram)

STEPN, a multi-layered social signaling force

• Self-actualization. By owning a STEPN sneaker (even just a limited edition/brand collaboration versions) communicates a certain level of wealth / social status. Moreover, it demonstrates the owner’s acumen in trends and technology.
• Prosocial Behavior and Climate Action. Users can vote to decide how much of STEPN’s treasury profit pool will go towards purchasing Carbon Removal Credit on the blockchain, meaning that owning a STEPN sneaker signals the buyer cares about climate change.
• Powerful proof-of-workout signal. STEPN builds proof-of-workout into its product. STEPN sneakers hold weeks to months’ worth of session data. Sharing a screenshot of a user’s sneaker data speaks volumes about the dedication and sweat the owner has to put into their fitness.

STEPN’s users will mainly come from SocialFi rather than GameFi in the future.

Potential initiatives for STEPN’s goal to build the ultimate SocialFi platform:

• Content creation tool for creators to design and sell interactive and collectible NFT Sneakers, which can be used by both individuals or fashion brands.
• AR/VR integration to enhance user experience within a special location (similar ideas to Holoride, which optimizes the UX inside cars via AR/VR).
• Location-based services: regional tournaments or local tours— Running or walking to a specific location to access audio (similar to Zombie, Run!), etc.
• Collaboration or sponsorship Any sports or healthcare related companies should be keen to partner with STEPN for advertising and even marketing opportunities.
• Interactive Map development for users to meet and socialize with other local runners.
• STEPN social media for users to share their proof-of-workout with their friends (similar function with Apple Workout) and sharing moments, how long you worked out, how many calories you burned, etc., which can be monetized by STEPN for advertising and promotional services in the future.
• Interactive console/device integration to expand the sports ecosystem within the app.
• In-app services: As STEPN develops, it can be a gateway to onboard users to Web3, which subsequently generates more income sources for STEPN and its governance token $GMT through marketplace and swapping fees, etc.

Up next, STEPN plans to work with top sneaker brands to add yet another social signal — material status through cultural icons and social capital. In just a few months, the app has grown rapidly. Much of this growth can be attributed to the efficacy of its multi-layered social signaling processes. With its brilliant game design, solid tokenomics, and enthusiastic consumer base, STEPN is prepared for the marathon, not just a sprint.