Analysis of why StepN suddenly burst into flames Sustainable development?
Analysis of why StepN suddenly burst into flames Sustainable development?
Analysis of why StepN suddenly burst into flames Sustainable development?
StepN is rapidly becoming a global hit and has sparked a lot of thinking in the industry. Its success can't be separated from the choice of niche track, the satisfaction of user needs, the rapid development and implementation of the team, the thinking on the model and gameplay, the "tap water" of a large number of industry leaders, and the support of Binance. More importantly, the team has not fully unlocked the potential of the project itself for the time being, and it is worth paying attention to the future development direction after completing 0 to 1.
But on the other hand, both GameFi and Move To Run have their own cycles, which may be short-lived, and will StepN become a "flash in the pan" as the fever decreases, prices fall, old players get bored, or a lot of imitation plates appear? It is also worth thinking about.
I. StepN Reasons for the explosion
StepN is an app that combines elements of GameFi and SocialFi, attracting users from outside the crypto world through the move-to-earn model. the explosion of StepN can be attributed to two things: first-mover advantage and skyrocketing prices.
From Axie with play-to-earn, to Monaco with write-to-earn, to StepN with move-to-earn, a new way to play always attracts a lot of attention in a short period of time. In terms of game setup and token model, StepN is not fundamentally different from Axie (at least as of this moment), but its game experience gives people a sense of "out of the loop" and provides a long-awaited hot spot in the first quarter when the mood is low.
There are a lot of questions about it being much the same as CX Panchakarma, and FOMO has a more similar energy. But realistically speaking, there is no similar product in the mainstream of crypto field. stepN has received investment from Sequoia India, Solana, Binance, etc. Mainland users need to create an overseas account first to participate, and there is a high threshold. There is a relatively big difference with Funky.
In the crypto world, "pulling" is the best publicity, and the surge of GMT, StepN's governance token, is definitely the booster of StepN's explosion. Since its launch, the price has risen from the lowest $0.01 to the highest $2.23, thanks to the GMT unlocking cycle and the game's upgrade system, not to mention the boost from Binance.
The only GMTs that have been unlocked so far are Launchpad and the airdrop, which started on March 14. In other words, from the launch on March 9 until the airdrop date, the only selling pressure on GMT is Launchpad, which costs almost nothing (shorting BNB is a hedge against coin price fluctuations), so most profiteers will choose to sell a small portion and keep most of it for higher returns.
The game upgrade system is shown in the following table.
Source
Users who want to upgrade their shoes to the highest level must purchase GMT, so GMT is a huge buy up front. Not only that, the upgrade process takes a lot of time.
According to the table, it takes 465 hours, or nearly 20 days, to upgrade a pair of shoes from level 0 to level 30. (Although users could theoretically upgrade shoes to level 27 before GMT went live, in reality, there were almost no shoes above level 10 on the market before March 9. (Even if you start from level 10, it will take 17 days to upgrade). Users can only earn GMT if they upgrade to level 30, which means that GMT is only available for a small portion of the first 5 days for Launchpad, with airdrops appearing from day 6 onwards, and the real selling (i.e. "digging and selling") only gradually increasing until around day 17.
II. Sustainability of revenue and expenditure models
Consumer users vs. investment users
The traditional revenue and expense model of the game is essentially the same as insurance. The revenue of insurance comes from the majority of people who pay premiums without making claims, and the expenses come from the minority of people who make claims. If the premiums collected are not enough to cover the claims paid, then the insurance product cannot rely on the internal cycle to continue operating. For example, universal health insurance on one island and pension insurance in a large country can only sustain this game of income over expenditure by relying on government financial subsidies.
By the same token, if a game has more users making money than spending money, then it is ultimately a game of "left foot on right foot", and the money made by users must be the money lost by the later. That's why we've always emphasized that GameFi is about Game, not Fi. If a game can make users willingly spend money on skins and props without expecting monetary returns, then the game must be sustainable.
StepN follows Axie's dual token model, which can effectively prevent the game from being affected by the rise and fall of the governance token. From the perspective of game sustainability, the game token GST is more important than the governance token GMT. If we compare GST to an insurance product, then the upgrade, repair and reproduction of shoes are equivalent to collecting premiums, while running rewards are paying claims.
There are only two ways to regulate supply and demand: firstly, open source, i.e. increasing premiums; secondly, cutting costs, i.e. shrinking claims. In terms of cutting costs, the team has made a clever design. The first is to set a cap on the number of running hours per day.
The second is diminishing marginal returns: as you can see from the table, the more shoes, the shorter the average time and the longer the payback period (the specific payback time can be calculated on the WeChat app "STEPN Assistant").
On the open source side, StepN also designed many ways to burn GST, such as the aforementioned shoe repair, upgrade, reproduction, etc. But for users, the ultimate goal of all this is still to get more GST, if the burned GST is not as much as the earned GST, then no one wants to keep playing. But for users, the ultimate goal of all this is still to get more GST, if the GST burned is not as much as the one earned, no one will continue to play. Therefore, the real open source, should be the user even if the loss of money also willing to play on. Just like people buying accident insurance, most people don't expect this insurance to really come in handy when they buy it.
In other words, a good income and expenditure model should have a larger number of consumer users than investment users.
StepN's consumer users are mainly from the social sector
How can a regular GameFi program attract consumer users? That is to improve the entertainment of the game. Suppose GTA5 is changed to GameFi mode, then even if the coin price goes to zero, it will not drive away the loyal players. StepN, on the other hand, is a product that, I'm afraid, is difficult to improve entertainment from the perspective of the game. After all, no matter how much fun you add to play, you still have to implement "Move" after all, and "Move" is always boring.
Many people made the comment, "Even if the price of StepN's shoes went to zero, at least it gave me a workout." But this kind of statement is typical of the self-assurance after being trapped. Go running with the intention of making money, and once you lose money tell yourself I was exercising.
The fact is that running is just boring and most people have a hard time sticking with it without the drive of interest. So why can we see many people running in real life? In addition to the few who really love sports, most of them are just for the spiritual interest of "having a good body to improve the image" or "showing the number of kilometers in social media to show their rich life". In essence, these are a social attribute.
As a result, the future of StepN's consumer-based users will come primarily from SocialFi, not GameFi.
StepN How many consumer users are there now
Unfortunately, although the StepN team claims that the product is GameFi + SocialFi, we haven't seen much of the Social element so far. If it's Social when you just take a picture and share it on social media, then everything can be SocialFi. What we'd like to see more than a verbal commendation from Adidas VP Scott Dunlap to StepN on social media is for him to announce a digital version of the Rose Replica 1.5 in conjunction with StepN, preferably with a highlight reel of the NBA Top Shot of Rose. The best would be to include a highlight reel of the NBA Top Shot of Rose.
This is the sports blockchain project that I would like to see the most. At the moment it must be acknowledged that most people buy their shoes just to make money, because there is really nothing to play or show.
So is there a large percentage of investment-oriented users? To answer this question we need to analyze the net flow of GST. The following chart shows the net GST outflows as shown by the data on the chain.
The above address is the official wallet, i.e. Spending Account. users need to transfer GST from their personal wallet to the Spending Account to repair or upgrade their shoes, and they need to transfer GST from the Spending Account to sell them after they have acquired them.
On March 1, Binance announced the launch of its 28th Launchpad project, STEPN (GMT).On the same day, GST shifted from a net outflow (earned by running) to a net inflow (burned by repairing, upgrading or breeding shoes) and the coin price spiked from $2.6 previously to a high of $4.0.After the good news was out, GST entered net outflow again, and the coin price gradually fell back to around $3.4.The good thing is that since March 16, GST is basically in a balanced supply and demand situation, so the price of the coin has been stabilized.The price of GST will directly determine the price of shoes, so the floor price of shoes in the last half month basically remained at $800-$900.As you can see, the balance of supply and demand for GST is very dependent on the number of new players.With the opening of the rental market in the future, more and more "wool-gathering" users will come in.How to stabilize the GST price is particularly important: a sharp rise will discourage new users from joining (skyrocketing shoe prices), and a sharp fall will not retain old users (significantly lower revenue).
If the on-chain data of Spending Account reflects the real supply and demand of GST, then it means that there is a greater percentage of investment-oriented users like me. If the real data is not available from the chain, that's a different issue.
Summary
StepN is positioned as GameFi + SocialFi, but running is a sport that makes games less malleable, so the product should cultivate more consumer users from the social level. But so far, StepN has not shown much social elements. The official interview seems to be more focused on building the NFT market than on developing a more Web2-like social element.
Based on the current on-chain data, GST will be in a net outflow situation if no new users enter. So we have reason to worry whether GST will be able to withstand the selling pressure once the investment-oriented users come in with the opening of the rental market.
Attachment: additions to the team's interview
Q: Current number of users and regions?
A: Daily activity is about 100,000 people, monthly activity is about 500,000 people, we have not liberalized the registration, need to invite system, due to the restrictions of local laws and regulations, did not open the download of mainland China and other regions. The ranking of user sources are Japan, USA, France, Russia, UK, Taiwan, etc. Japan has a lot of Move to Earn game tradition, so it is accepted quickly. About 30% users are outside of the cryptocurrency scene. We don't want any gold-beating unions to enter and destroy the game's ecology, so we have also not opened up the rental market, nor have we removed the invitation system and opened up free registration.
Q: Cross-chain? The future direction of development?
A: We will cross-chain to BSC soon, cross-chain to Ether may be a bit later. Our future direction is to become an NFT marketplace, or even the largest trading platform in the NFT space. Users can buy not only shoes but also other NFT products from us. We are developing NFT marketplaces on BSC and Solana, and will soon merge platform wallets and local wallets.
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