[Coinlive Feature] The Defeat of Move-to-Earn (M2E): Downfall of STEPN

Not long after writing the article about the investment potential of STEPN back in June, I sold all my sneakers and tokens of this move-to-earn game. Two months have passed, I decided to give the game a look, and see if it is still surviving or completely dead. I got to say it did end up with a lamentable outcome.

It was July 10th when I decided to quit the game

As a player who joined after the “first” crash of STEPN, I am one of the witnesses who see the downfall of this once most celebrated GameFi in Web3 history. Just in case you have not heard of STEPN, this is a blockchain game that allows you to earn cryptocurrency by walking outdoor. Of course, there is no such thing as free lunch in the world. In order to start walking and earning, you have to fork out some hard cash to buy its sneaker, in the form of NFT. The price of these sneakers NFTs can be varies depending on the time you join.

A huge discrepancy in floor price between May and August

STEPN supports multi-chain network, I started out STEPN on the BNB chain and bought my first pair of sneakers on June 7th, which cost me roughly 1.47 BNB (~$435 USD). I remember the return in the first and second week is kind of decent, the earnings could cover my daily meal expenses. During then, I was thinking if I can walk for just 10 minutes on daily basis, my breakfast, lunch, and dinner are all fully covered by STEPN, how awesome it is! Soon after I realised it is too good to be true. STEPN awards Green Satoshi Token (GST) to users by walking. It is a utility token in which users can trade for other cryptocurrency and stablecoin or use it to enhance their sneakers, so as to improve earning efficiency - more GST will be awarded while walking. Despite the effort by STEPN’s developers, GST unavoidably fell into a death spiral while the governance token (GMT) is still surviving at best.

The heartbroken graph of GST (BSC) - STEPN’s utility token in BNB chain

It might be a little bit execrating but STEPN gave me a strong “Ponzi” vibe. In Ponzi schemes, the first batch of “investors” are always able to get back their invested principal, meanwhile the latecomers become the “exit liquidity”. STEPN had a similar situation as those who started earlier in STEPN, can easily secure their principal in the very first month. However, most of them reinvested their profit back into the game by buying and minting more pairs of sneakers, so they could generate more earnings. This is how things go south. Due to the lucrative profit that the game yields, there are a group of people with bad intentions setting up bots and even building “factories” to mint and resale sneakers. This slowly became a huge issue in China as its central bank ruled all crypto transactions illegal in September 2021. Apparently, STEPN was in the grey area. All of a sudden, STEPN made an announcement via its Twitter handler saying they are no longer proving GPS service to users in China. To earn crypto, GPS service must be turned on all the time while using the STEPN app. No GPS means no earnings, which indirectly bans all users in China. And so, STEPN met its first collapse. Also here was when I started my move-to-earn journey, just one week after the announcement.

Unlike any other failed crypto project, STEPN strives to survive. There were rumours spreading around the Web3 scene that STEPN is going to release the third chain that has something to do with apes. The hype was built up and everyone was guessing whether it will base on ApeCoin (APE) or the Ethereum chain. Long story short, it turned out that the new realm will run on the Ethereum chain, and all Bored Apes (BAYC) NFT holders are eligible to claim an APE sneaker NFT for free. Surprisingly the hype didn’t live up as the majority of BAYC holders felt quite meh and some don’t even bother claiming the free NFT. Anyhow, the APE Sneakers NFT was trading around 2 ETH on the first day of its launch. (The airdropped NFT in the first hour was sold even much cheaper at around 0.5 to 1 ETH but the record is nowhere to be found)

The floor price of the APE Sneakers NFT, a decrease of 86% in slightly over a month. Now you can get even cheaper NFT in STEPN's own marketplace

The APE Realm went live on July 18th and its utility token – GST (ETH) – is trading between $3 to $5 on average in the first two weeks. Unlike the sensation that once happened on the BNB chain, both the ETH sneakers and tokens never get a chance to pump, instead trading sideways and falling gradually. From the history of the previous two chains, once the price falls, it will never recover and the declaration of death is just a matter of time.

The price chart of GST (ETH) - STEPN’s utility token in Ape Realm

Stats show daily users are getting lower and lower. Source: Dune Analytics @lightsoutjames

The number of new users in the APE Realm is pathetically low. Source: Dune Analytics @ash1na

From the charts above, it is obvious that STEPN can hardly attract new users now. A pair of sneakers can earn you a net 8 GST per day, which is worth around $0.35, $0.48, and $3.50, for SOL, BNB, and ETH chains respectively. Say to earn that $3.50, you would need to buy the sneakers NFT first by paying 0.14 ETH (~$230 USD) and constantly walking 10 minutes on a daily basis. Provided the token maintains its current price (which is unlikely), you need 66 days to recover the invested principal. The number of days might be prolonged if the token price drops in future. The paywall, unstable token price, and unattractive reward have stopped new users from even trying to install this GameFi app on their phones.

If you would really like to try out a move-to-earn game, fear not, there is a decent one that requires no payment but only your step count. Check out Sweatcoin here if you have missed out on the last article from us! Link: https://www.coinlive.com/news/detail/?id=10066

Written by: [Coinlive] Nell