Analysis of STEPN development strategy. Will the project disappear?

August 4, 2022 - Around 7 mins mins to read

In the previous post, I analyzed the business model of STEPN. Through the article, you can probably understand why $GMT and $GST tokens drop without breaking after a rapid price increase. You can read the article here.

In this article, we will analyze the project’s development strategy and projections to determine whether the project can continue to develop or will collapse.

Analysis of STEPN development strategy. Will the project disappear?

Milestones in development.

Significant events in the development of STEPN

Dec 9, 2021: Introducing the world’s first move-to-earn NFT mobile game. Read more: here.
Dec 14, 2021: STEP launches the first NFT airdrop campaign on Discord with a total reward of 10,000 NFT sneakers. Read more: here.
Dec 20, 2021: STEPN launches its public beta version on mobile. Read more: here.
Jan 20, 2022: STEPN raised $5.0M in seed round funding from Sequoia Capital, Folius Ventures, and other leading Web3 investors. Read more: here.
Feb 28, 2022: STEPN upgrades the decentralized wallet and NFT marketplace into the multi-chain wallet and multi-chain decentralized NFT marketplace. Read more: here.
Mar 2, 2022: Binance launches a token sale for $GMT on Binance Launchpad. Read more: here.
Mar 15, 2022: STEPN has done a Giveaway Event to our Trailblazers after our ICO launch. Read more: here.
Mar 22, 2022: Binance holds a GMT trade contest to promote trading volume for currency pairs such as GMT/USDT, GMT/BTC, GMT/BUSD, and GMT/BNB. Read more: here.
Mar 28, 2022: STEPN doubles the chances to receive 2x Shoeboxes from Shoe-minting that encourages user minting more. Read more: here.
Apr 2, 2022: STEPN posted a Q1 profit of 198,635.62 SOL ($26,815,807.35) from NFT Marketplace trading and royalty fees. In addition, the project has deducted a part of the profit to buyback and burn GMT to help increase the value of GMT. Read more: here.
Apr 14, 2022: Binance launched STEP IGO on Binance NFT Marketplace, attracting more than 195,000 participants. Read more: here
May 1, 2022: The project launches beta phase IV and airdrop for SOLANA Genesis Sneaker holders 1 BNBchain Shoebox. Read more: here.
Jun 3, 2022: Introducing STEPN’S Anti-Cheating System — SMAC to exclude fake users. Read more: here.
Jun 6, 2022: It changed some economic mechanics in the game, such as minting time and energy. Read more: here.
Jun 8, 2022: Launching the decentralized exchange platform – DOOAR, on the mobile app. Read more: here.
Jun 21, 2022: Adding a new feature for the latest version app is to burn five lower quality Sneakers to get one better quality Sneaker) and have adjusted the energy sharing rule. Read more: here.
Jul 1, 2022: The project partnered with APE and rewarded the OG APE Shoebox to owners of the STEPN genesis sneaker. Read more: here.
Jul 12, 2022: the project announced $122.5 million in profits in Q2 through its platform fees (quadrupled Q1). they will leverage 5% of the profits to initiate a Q2 GMT buyback and burn program. Read more: here.

Development Strategic Analysis

the market’s FOMO stage.

STEPN is one of the most successful move-to-earn games to date. When the project was first launched, it was heavily supported by big names like Alameda Research, Solana Ventures, and especially Binance. STEPN is the 28th IEO project on Binance. Because of that, $GMT is immediately x13 times right after listing than the IEO price.

After IEO, the Project started running many incentives such as: distributing GMT for early users; holding a $GMT trading contest with prizes up to $30,000 on Binance, and Increasing the chances for users to mint out more shoes. It was thanks to these incentives and the attractive part of participating in in-game activities that helped the price of $GMT increased rapidly from $0.6 to $2.68 within a fortnight.

As can be seen from March to early May 2022, the project focuses mainly on attracting users to play games. This strategy has been really successful. The $GMT token price has peaked at $3.83, up x380 from the IEO price. According to Dune Analytics, the number of users on STENP also increased from 16K active users to more than 700K active users within two months. Q1 profit came in at $26.81 million, and Q2 was four times Q1 with $122.5 million.

Screen Shot 2022 08 03 at 17.10.21 — Source: Dune Analytic

The phase concentrates on constructing the core.

The period from May 2022 to the present. The project focuses mainly on product development. Specifically, on June 3, 2022, the project upgraded the SMAC anti-cheat system to optimize the user experience and focus on real users. Next, on June 10, they launched a decentralized exchange right on the mobile application. STEPN’s decentralized exchange, though, has higher transaction fees than others (1% fee). But building an exchange right on such an application will help optimize the user experience. After playing the game and receiving rewards, users can easily sell in-game tokens through DEX on STEPN Mobile’s own platform. On June 27, 2022, the project launched a new feature, allowing users to burn five lower-quality sneakers to get one better-quality sneaker. This feature helps to reduce the supply of shoes in the market while increasing the user’s gaming experience with better-quality sneakers.

However, upgrading the product during this period, aimed at retaining users, was not effective. This was the period when the market entered the crisis phase, along with a previous strong wave of FOMO in the project. Causing the token price to lose 76% of its value (from its peak until now). The token price fell from $3.8 to $0.94. And is currently in the sideways phase.

So will the $GMT token continue to fall, or worse, will the project have to stop working?

We can compare the project’s roadmap. Starting from April until August, although $GMT drops continuously. But the project is still very focused on product development and completed the roadmap even earlier than expected. This shows that the capacity of the STEPN team is there, and they can do what they have announced. This partly helps to strengthen the trust of users that the project team is really enthusiastic and attached to the project; in addition, they have the capacity to build the project.

Screen Shot 2022 08 03 at 17.10.48 — Source: STEPN

Verdict

From the events above, we can draw some conclusions:

The project’s initial incentive and marketing strategies were really successful and helped the token price increase hundreds of times.
Because the incentive is attractive, many people participate, making the number of shoes minted too much and causing the supply to be high and the price to be pushed up too high. Specifically, the price of shoes increased to 10 $SOL (the price of $SOL at that time was about $97), meaning users had to spend at least about $1000 to participate in the game. Consequently, this creates barriers for new users and reduces demand. Supply is increasing continuously, but demand is decreasing. This causes shoe prices and $GMT to decrease continuously.
The capacity of STEPN’s development team is excellent; they always complete the outlined roadmap and continuously improve the product to improve the quality and best serve the users.
Looking at the roadmap, you can see that there are still many features that the project has not released. And with the capacity of the current development team, I believe that the project will be able to fulfill the plans they have set out.
In the coming months, the project team will focus more on building on the project’s core values and building a more stable economy to attract users who want to stick with the project because of its health and civilization values.
This is still not a good time for us to invest in $GMT. However, we can be confident that the project will continue to grow in the future because of the vision as well as the capacity of the project team.

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

Analysis