Looking back at the past two months, especially with the recent opening of the BSC realm on the 30th of April, STEPN made an unprecedentedly bold move.
We certainly paid our dues in this attempt, but we also learned a ton. Herein, we try to review this expedition in an objective manner, and summarize our take-aways and action plans, hoping that we can upgrade STEPN’s economic system before the roll-out of the future realms.
In the Web3 world, users are not just users; they are also contributors to the project.
Therefore the team’s goal is completely aligned with the users. From previous interactions with you all, we have come to deeply appreciate your valuable feedback. We also respect your alignment with our long-term vision. Before we present you, our users, with the final solution, we’d like to offer the breakdown of the situation and our analysis, in the hope to build a long-lasting project with you all.
Before we start, let’s ensure our overarching expectations are aligned.
We hope that the product can operate for years to come, organically sustain the model to incentivize people to exercise, and really change people’s lives and wellbeing.
With these expectations, we distil the following goals as we analyze rationally:
1. VALUE: There should be consistently more external value inputs, which come from not only new users but also from other commercial means.
2. PRODUCT: The product should gradually more enjoyable by itself. We will be more than willing to pay for the empowerment, to build better entertainment and social experiences.
3. REALM: The new realm should not be overly-volatile. In the recent episode, it is undeniable that many of us have experienced wild financial benefits, but as it’s said “these violent delights have violent ends”
Therefore, before we introduce any future realm, we have identified some obvious and deep-rooted problems. We hope to make fundamental changes to address this.
We have some solutions but would love to hear from you first before making any specific changes. Ideally, we’d like to incorporate your suggestions into our action items.
Summary of Situation
Here is the summary of these problems, followed by our detailed explanation of each:
1. The cross-realm energy bridge brings about windfall profits and consequently quick exploitation of the BSC realm.
2. The pure mint-and-sell activities hinder the expected experience of the product.
3. The edge cases of dynamic mint cost are not being insufficiently considered.
4. The lack of self-adjusting mechanisms for the sneakers and gems, and the inflation of these assets.
The cross-realm energy bridge brings about windfall profits and consequently quick exploitation of the BSC realm
The problem review:
When the BNB Chain realm only opened for 20 days, the average daily energy consumption per user had reached an astonishing 9 energy per day. This was caused by the popular strategy of 1 pair of BNB-based + 8 pairs of Solana-based sneakers.
However, under this circumstance, an unfortunate positive spiral appeared:
The 8 pairs of Solana-based sneakers are very cheap -> with 9-energy one could very quickly return their principal -> yet the market is still pricing the sneakers based on the normal 30-day cycle -> hence the market price for 1 pair of BNB-based sneakers is far above the production cost -> inevitably, FOMO ensues.
In a nutshell, the cross-server energy bridge has become the catalyst for a FOMO loop in the new realm, causing immense volatility in the new realm experience.
We still hope that the cross-chain energy bridge can reward people with their contribution from the past realms and help the development of new realms. Nevertheless, we understand we need to ensure that there is a balance and boundary.
The pure mint-and-sell activities hinder the expected experience of the product.
The problem review:
In some videos, you would probably have seen the existence of Mint Factorys — dozens of phones are placed on a table, and these accounts just focus on upgrading and minting (and ultimately selling the shoes). This was certainly not what our app was intended for.
STEPN is an app that incentivizes people to work out. We hope that all users can get to enjoy the benefits of exercising while earning some money. We do not want STEPN to become solely a financial product where user experience is completely detached from exercising.
The frill cases of dynamic minting costs were not being insufficiently considered.
The problem review:
When GST was shooting too high (for sustainability), we released the dynamic minting mechanism, which had played a role in stabilizing the token prices effectively. However, when this recent “crisis” came, we identified 3 problems:
1. When the price of GST fell rapidly, we lacked adjusting drivers to stabilize it.
2. The relationship between GST and GMT prices gets more delicate as they gradually become closer to each other. This requires more detailed plans to respond.
3. Looking back to the BSC realm, when the GST price was (and still is) higher than GMT, there is no requirement for more GMT in the mint cost. This caused minting to be unreasonably lucrative and unsustainable.
GST is what users care about the most and we know that. Minting is one of the most fundamental mechanisms in STEPN. We expect to reasonably solve the above 3 problems and make the loop between Mint-GST prices become more healthy.
The lack of self-adjusting mechanisms of the sneakers and gems, and the inflation of these assets.
The Problem review:
This wasn’t a problem when we were in the boom cycle, but the recent “crisis” has exposed the problem when the cycle is trending downwards. Previously, both the sneakers and the gems had a solely one-way inflationary growth. The lack of recycling (deflationary) mechanism of these assets led to accumulation, which in turn blocks the normal economic circulation and causes a decline in user experience.
A good economic design should be a system that can flexibly “self-regulate”. That is, there should be self-adjustable mechanisms for both asset issuance and asset depreciation, depending on the market conditions, and these mechanisms should be beneficial to the users in both directions (i.e. users can extrapolate positive values from either way). We hope to introduce a number of effective, fun, and healthy recycling mechanisms for the sneakers and gems that can be beneficial to both our users and to the product.
For all 4 problems we have stated above, we will announce a solution 5 days later. In the meantime, we welcome and appreciate your suggestions in the form here
Thank you for reading this far. We can’t thank you enough for your participation in STEPN since our inception half a year ago. Thank you all for the support, participation, data analysis, and feedback/suggestions along the way. We couldn’t have gotten to where we have without your contribution, and your support is important to us.
STEPN is With You, For You, By you.
Now and Always.
- TEAM STEPN