A web3 app that wants to pay you to walk or run

Welcome to this week’s deep-dive. I love running and I’m exploring Web3, so I couldn’t resist the urge to dive into Stepn, a Web3 fitness app that operates a “play-to-earn” model. This morning I made $24 worth of token (5 tokens = $24) while walking my dog and it felt great.


Read on to find out what that this is and how it works.

Context: Inspiration from gaming

Gaming is one of the sub-sectors in Web3 that is ahead of the curve. Play-to-earn mechanics were first introduced in gaming, a market estimated to be worth ~$200 billion in 2022.


Citi released a report on the Metaverse and Web3 (incidentally they estimate it to be worth between $8 trillion and $13 trillion by 2030). The report has a neat table summarising how gaming models have evolved over time.


In the first iteration, users bought games and the purchase price was the only source of revenue. In the second iteration, games were free to play. Gaming companies made their money by upselling within the game.

The latest model, called play-to-earn, allows players to earn rewards while playing. NFTs are a huge unlock for gaming because they’ve spawned open in-game economies.

Open in-game economies facilitate trade between players

The gaming company earns revenue from these assets by charging a percentage of all sales. The graphic below shows the difference between closed and open in-game economies (the deep-dive is an interesting read if you want to learn more).


Let’s look at how these models are being applied to real life use cases.

Stepn: we’ll pay you to run

Stepn is a Web3 fitness application with gamification. It is an open in-game economy, meaning that it allows users to buy, sell and rent sneakers from each other.


Here’s how Stepn works:

  1. Buy sneaker: Users buy a digital sneaker. Link here if you want to take a look. Sneakers cost ~10 Sol or more ($1,000 at the time of writing). In the future, users will be able to rent sneakers.
  2. Walking / running rewards: When a user with a digital sneaker walks or runs, they earn tokens. These tokens can be GST (pure money) or GMT (money and voting power). The current price of GMT tokens is ~$2.25 and GST is ~$5.0. The amount of tokens you earn depends on the sneaker you bought and a bunch of other factors.
  3. Upgrades: Users can also spend their tokens (called token burning) on sneaker repair, customising, levelling up and so on.
  4. Resell / rent: Users can sell their shoes, and in the future, rent them out.
  5. Mint sneaker: after users achieve a certain level, they can create their own shoe by combining two existing shoes.

Here’s a summary of the events that lead to money in and money out for Stepn. For money in, the percentages show the cut that Stepn makes.


Okay, where does the money come from?

First, I wanted to understand how long it takes users to break even. At least 4 - 5 users have reported being able to break in within a month.

As a crude assumption, let’s say every user earns ~$1,000 per month if they are active. Stepn needs to make $1,000 per month per user to cover the costs of rewards.

Stepn makes money when users spend money in the game. Spending involves repairing sneakers, buying upgrades, minting new sneakers or selling sneakers. These happen more often than you think. For example, sneakers degrade over time and need to be repaired. To keep its economy sustainable, Stepn needs an engaged user base that is constantly spending.

Lessons from Axie Infinity

Axie Infinity is the original game that started the play-to-earn trend. The price of a game’s token is one of the best indicators of users’ confidence in the game. Axie Infinity has gone through it’s fair share of turmoil. In November 2022, users become concerned with inflation.

Inflation is a killer because it makes assets in the game less valuable, and users want to cash out immediately.

The price of the token started falling due to inflation and users begun cashing out of the game leading to a death spiral.


In the case of Stepn, there is promise for three reasons. First, these games depend on users having fun and being engaged. And right now, Stepn definitely has this going for them. The app is witnessing tremendous growth and has users sharing their “earnings” all over social media. Second, Stepn’s game is attached to a real life event - walking and running. It’s something anyone can relate to and something that happens naturally. Third, the creators have introduced a number of ways to spend your tokens to combat inflation. These factors make me cautiously optimistic. I don’t have the resolve to say it’s definitely sustainable, but I’m also hesitant to say its a ponzi scheme.

Ultimately, it’s a bit like a country:

Traditional economy
Get a passport
Buy a digital sneaker
Get paid to work
Get paid to run or walk
Inflation by printing money
Release more sneakers
Commission on activities

And just like a country, the sustainability of the economy depends on how good the monetary policy is. To date, Stepn seems to be able to cover it’s outflows on most days.


Renting will be one of the biggest determinants of success. It allows users to participate without a big upfront investment and Stepn earns the most from this event.

Partnerships are another source of revenue. The app announced that it has 200K daily active users. Sneaker brands are going to flock to the application sooner rather than later. In a recent interview, they mentioned an upcoming partnership with a “big brand”.

Will real life web3 networks be sustainable?

Stepn is an example of a peer-to-peer network enabled by Web3 that touches real life. There are other examples popping up. Hivemapper is trying to create a decentralised map. Helium has built a decentralised wireless network.

Only time will tell if Stepn is sustainable, but it’s an exciting prospect. Adding a little gamification to something like walking or running makes the activity appealing. It has the potential to get people to move and lead a healthier lifestyle.

It’s still early days, but real life applications of Web3 like this one excite me. If you’re interested in Web3, it’s also a great way to onboard into the space.