As a pioneer of the play-to-earn movement, Axie Infinity inspired many new Web3 applications to apply the learning models to their respective ecosystems. Now, the focus is slowly shifting towards the move-to-earn model.
Moreover, the move-to-earn phenomenon is essentially a form of play-to-earn, where fitness is gamified through a non-fungible token. Also, the NFT holders need to engage in the application mechanics to receive the reward.
The latest project joining the move-to-earn movement is STEPN. It is a Solana-based Web3 application, where its NFT sneaker owners earn as they walk.
However, STEPN has programmed a factor to determine how much a person can make with sneakers. In addition, it also has an in-game token called the Green Satoshi Token (GST), which is currently trading at $5.74. Over the last 30 days, the token has surged over 77%. But is it sustainable?
While STEPN might be bringing some serious returns for investors right now, there are already a growing number of competitors. In addition, the new move-to-earn earning model could soon turn it into nothing more than a passing fad.
Although move-to-earn is relatively new, STEPN is not alone in the race. Recently, a decentralized application of Avalanche blockchain, Step App, has emerged as a competitor to tap into the $100 billion fitness industry.
Moreover, the Step App has multiple token emissions with FITFI and KCAL. However, there lies an imminent risk of creating a value extraction vacuum with token emission of any kind. To mitigate the possibility of inflation, Step App is integrating token sinks into its tokenomics. Thus, these burning mechanisms will indefinitely remove the tokens from circulation.
Unlike STEPN, Step App has plans for building a software development kit that lets others build within its metaverse. That makes it more Web3 native and would help it potentially mitigate bottlenecks that can impede Step App's overall scalability.
It is still unclear how these move-to-earn platforms will tackle saturation. Also, it isn't easy to develop a token mechanic that can sustain a healthy price point after gaining millions of users. It also comes with the risk of a potential drop-off in active users.
In theory, move-to-earn platforms are well intended for a user's health and wellness. However, the success of these models comes from incentivizing and trying to form habits in users. At the same time, studies show that habits are sustained better through intrinsic motivation rather than external rewards.
In 2021, play-to-earn was all the rage, but it has been reduced to a mere shadow of its former self. For this, investors should question the sustainability of the move-to-earn movement before investing for the long term.