The positive side of social signaling.

Yes, there can be one! STEPN is leveraging this power for better health and a better planet

A term coined by Julian Lehr, signaling-as-a-service is a phenomenon that has exploded into popularity in the modern era.

The two types of signaling products

As Robin Hanson and Kevin Simler write in The Elephant in the Brain, most of our everyday actions are rooted in some form of signaling or status seeking. In fact, the authors assert that “well over 90 percent” of human behavior can be attributed to a desire to signal.

Signaling-as-a-service

Across various industries, there are hundreds of businesses that offer signaling-as-a-service.

For example, lululemon sells not just yoga clothes, but also the social capital that comes with them. The buyer signals several messages, including that 1) they can afford top-tier performance products 2) they prioritize their well-being and 3) they have the taste to buy from a brand like lululemon.

This phenomenon bolsters an entire industry of luxury or high-end goods such as watches, purses, streetwear, and more. It’s a powerful, billion-dollar market that has only grown in recent years.

Signal amplification-as-a-service

Taking it a step further, signal amplification — in other words, getting the signal across to the right people — has become a service in and of itself. This has taken shape online in the form of social media. Twitter, Instagram, TikTok, and more are all signal amplifiers.

For example, if you simply wear your new lululemon fit to the studio and back, not many people will receive your “message.” However, if you snap a picture and post it online, that message gets distributed further and wider — to all the friends that you presumably care about receiving the signal.

The Big Wide World of Web3

Until the advent of NFTs, physical luxury goods were the main signaling economy, where buyers could purchase social capital and flex. But in recent years, blockchain technology has enabled digital scarcity in a way that the internet has never seen before.

Now, people across the globe can buy and own digital goods, with the requisite verifications that they are, indeed, the owners of that asset.

This is an entirely new ballgame, and burgeoning web3 projects are already finding that they have a leg up in the signaling space. With digital exclusivity inherently built in, NFT projects are blowing up — the NFT market had a breakout year in 2022 and, in the art segment alone, has generated billions in sales volume.

STEPN, a triple-layered social signaling force

An NFT project that understands the social signaling game extremely well is STEPN, a web3 running app that pays its users in crypto to move outdoors. In order to earn tokens, users purchase a digital sneaker from its NFT marketplace and walk, run, or jog outdoors.

Taking a closer look, you’ll find that the developers have built in a triple-layered mechanism of social signaling for its users.

The most obvious one is that of financial status. With some sneakers going for thousands of dollars on its in-app marketplace, owning a STEPN sneaker communicates a level of wealth and savvy — that “I can afford this NFT”, that “I’ve done my research and invested in this project that cares about the environment and helps me build healthy habits.”

That leads us to the next layer — there’s a prosocial aspect to owning a STEPN sneaker as well. While it’s still under development, users can vote to decide how much of STEPN’s treasury profit pool will go to purchase Carbon Removal Credit on the blockchain. Similar to why people buy from Patagonia, a company that is known for its integrity and environment-first policies, owning a STEPN sneaker sends a subtle message that the buyer cares about climate change.

Finally, the most powerful signaling mechanism of all lies in STEPN’s fitness component. Like Strava, perhaps one of the most successful social signaling fitness apps on the market, STEPN builds proof-of-workout into its product. You can read more here about how STEPN is bringing web3 revolution to fitness. While it’s relatively straightforward to repair and level up STEPN sneakers, it’s certainly not an easy or fast process. It can take users weeks to months to get to certain levels.

Thus, not only are high-level sneakers a financial status signal, but they’re also a powerful proof-of-workout signal, an asset that holds weeks to months of data. A single snapshot speaks volumes about the dedication and sweat that the owner has had to put in to get his sneakers to that level.

Closing Thoughts

Up next, STEPN has plans to work with top sneaker brands and more to add yet another dimension to its social signaling — coming full circle to physical status signaling and social capital.

The app has already experienced exponential growth, in just a few months. Much of this growth can be attributed to the power of its triple-layered social signaling mechanisms. Along with its strong game design, sturdy tokenomics, and enthusiastic consumer base, STEPN is poised to take off to even greater heights

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