STEPN has created a new earthquake at a time when Bitcoin is rocking sideways. Within one month, the price was x100 compared to the token sale price ($0.01). However, the price fell without stopping after settling on April 29. At the time of writing, STEPN’s GMT token price was ~$0.94.
In this article, I will analyze the operating mechanism and tokenomic of the project. From there, we can see why this token rose sharply and dropped in price quickly.
Stepn is a Web3 lifestyle app that allows you to improve your health and make a profit on every move. Users equipped with NFT Sneakers move outdoors, converting their rides to earn tokens and other NFTs rewards.
Stepn builds on the Solana ecosystem and is the winning project of the Solana Ignition Hackathon Gaming Track. The project was born with the aim of inspiring millions of people to live a healthy lifestyle and improve their fitness level by rewarding, and encouraging users to exercise daily, giving people the opportunity to expose themselves to Web3.
Stepn released the first Beta on December 20, 2021, then became the 28th project to be open for sale on Binance Launchpad. Currently, Stepn is a project that is leading the Move-to-Earn trend, increasingly attracting thousands of players worldwide.
STEPN is a vertically developed ecosystem that includes: a wallet for funds, a token swap, and a marketplace. STEPN has the following main activities:
There are 3 game modes for users:
Shoe-Minting Event (SME) is when a user owns 2 Sneakers marked “breeding, ” meaning they can be bred. Both of those sneakers were brought together. A pair of shoes can be worn up to 7 times in a lifetime.
The Marketplace is where users can rent/lease or sell/buy their NFT Sneakers, Badges, and Gems. A simple filter and sort function is available in the Marketplace for easy navigation.
There are three main activities on Stepn’s Marketplace:
The working mechanism of DEX on Stepn is similar to Uniswap. Token exchange activities will take place here. The first phase of Stepn DEX is only available to Solana users. Then the project will develop into multichain.
The fee for each transaction will be 1% fee, where:
In general, this fee is relatively high compared to the current Dex exchanges, the liquidity reward is equal to other exchanges. Therefore, the competition of DEX on Stepn is almost nonexistent.
A total of 6,000,000,000 GMT and divided into 6 different allocations. The team, Advisors, and Investors have not yet been paid their tokens. According to the schedule, their tokens will be paid in February 2023. This is the time you should consider because other organizations can discharge you at any time.
According to Stepn’s estimates, their total tokens will be fully unlocked around the 8th or 9th year from the token issuance date. We can see the illustration below.
About 11.5% of the total GMT supply is distributed (approximately 690M tokens). Which is 7% from the public sale and 4.5% from the Treasury.
Compared to Axie for the same time period, Stepn has a relatively slow delivery rate. Currently, GMT’s Monthly Total Change is only 0.3%. However, in September 2022. This number will increase to about 0.7%, this is because the Allocation of “Move and earn” is distributed. In addition, February 2023 will also have a wave; this percentage change increased to 1.7% and is maintained. The more GMT is distributed, the more inflation will increase.
In my personal experience, GMT’s initial inflation is low compared to many other projects. GMT inflation currently hovers around 3%. Usually, projects will initially distribute tokens to the market through liquidity attraction programs. That’s why the percentage of inflation grew in the double digits. Stepn is the opposite, this helps the token price to be less pumped and dumped.
In addition to GMT, Stepn has an in-game token GST. This token has no max supply and is used as a player reward.
The data below is updated from Dune Analysis from which to calculate the relative amount of GST minted each week. On average, each pair of shoes earns around 10.56 GST per day. I have the following inflation data below.
In May, when the number of new users spiked, the number of new shoes increased accordingly. Many people participate in Stepn’s game -> GST is minted every day and increases sharply, -> Inflation also increases.
Currently, GST’s weekly inflation amount is around 25%. --> 100% per month--> This is the reason why GST has continuously reduced prices in the past time.
Currently, the project’s revenue comes from activities such as:
Also in the future, when other products are completed, Stepn will have other fees such as
GMT is Stepn’s governance token and is the main mechanism of project governance.
A small portion of the revenue will be used to cover Stepn’s operating costs and most of it will be allocated towards the dividend distribution to the holders of GMT tokens and staking. Locking GMT for a more extended period will also increase the voting power of GMT holders on future governance proposals.
→ When the amount of revenue is large, the profit sharing is decided by GMT Staker → GMT stakers want more votes → have to buy more GMT for staking → leading to greater buy demand for GMT tokens. → GMT price increases.
I think below is the model that Stepn brings value to the GMT stacker:
Above is my analysis of the Stepn project’s tokenomic and operational model. I will summarize some of the main points after learning about the entire operation of the current project.
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
DISCLAIMER: The Information on this website is provided as general market commentary, and does not constitute investment advice. We encourage you to do your own research before investing.
Ken. N
Coincu Ventures
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