Why are we building a fitness app on the blockchain?

STEPN Official
5 min readMar 31, 2022

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There are many fitness apps out there in the market. So why did we build STEPN on the blockchain? This is to ensure:

  1. The users get rewarded. This means more incentives to be fit.
  2. Ownership and selling in-game assets (NFTs) in real life with no friction.
  3. Tokenomics to ensure supply and demand
  4. Network Effects to bring millions of users onto web3

While we have covered our vision of bringing web3 revolution to fitness and how we are shaping the future of fitness with technology earlier, in this article we will cover how we use network effects to leverage growth. This is where crypto becomes a strong aspect of creating a network effect where people can build their social graph revolving around their wallet addresses. NFT is one of the key elements of the STEPN app, which represents the digital ownership of users — and owning and trading NFTs is the pillar of the app as well. Not to mention, that building on Solana has been instrumental in our promise of building a greener web3

Since the dawn of society, network effects have driven human evolution, helping us work together in tribes and cooperate to survive.

In the digital age, network effects remain the lifeblood of connection — the underlying value that drives the biggest and most successful businesses. Just look at social media apps like Facebook or e-commerce sites like Amazon, which are now some of the most valuable companies in the world.

What are network effects?

Network effects occur when the value of a network increases with the number of people who join.

The first network effect to be observed and formally named was in the early 1900s, around the invention of the telephone. Theodore Vail, chairman of AT&T, noticed that the value of his company lay not in the phone technology, but rather in the company’s network.

A telephone without a proper network, said Vail, “is one of the most useless things in the world. Its value depends on the connection with the other telephone — and increases with the number of connections.”

In other words, even if a new phone came along that had better tech or functionality, AT&T still retained its value. Consumers used AT&T in order to reach their friends or family, not for the clarity of sound or sleekness of the product — the core need was for the network, not the good.

With network effects, each added user brings incremental value to all other users. For example, a four-person telephone network is more valuable than a four-person telephone network. Meanwhile, a 10-person telephone network is exponentially more valuable than either of these, adding on countless more permutations of potential connections.

Once the number of connections reaches a critical mass, it often becomes extremely difficult and capital-intensive for any potential contenders to compete. The number of users reaches an inflection point, a critical mass that often results in exponential, hockey-stick and which translates into winner-take-all markets.

The power of network effects

In the web2 world, network effects have built powerful empires — massive social media companies like Twitter, Instagram, and Facebook. Together, these giants attract billions of users every month while commanding hundreds of billions in market value.

Their value proposition is simple — the more friends you have on these platforms, the more enjoyment and value you’ll get from the experience. While that’s not a revolutionary concept — most engineers these days can code a working social platform — the networks that are woven into these platforms make it extremely difficult for competitors to enter, unless they can offer significant improvements that attract a critical mass of users to switch away.

Indeed, a study done by NFX in 2019 shows that network effects are responsible for 70% of the value created by tech companies since the birth of the internet in 1994. Once the network effect flywheel is in motion, it’s hard for anyone else to compete.

Network effects in web3

In web3, startups in the move-to-earn and play-to-earn space can compound growth through token incentives, overcoming the initial cost of building a network — which can often take years or decades in web2. By offering incentives like crypto, startups can essentially bootstrap massive networks in a matter of months.

STEPN, is a move-to-earn NFT project that pays users in crypto to run or move outside. Riding the wave, STEPN has attracted over 200,000 monthly active users and 90,000 daily active users in a matter of months.

But once that network is in place, games aren’t necessarily guaranteed success. For example, play-to-earn games like Axie Infinity have amassed millions of users in just a couple of years and moved billions in sales volume. But as the game’s growth has started to slow, its in-game currency, the SLP token, plunged over 90% in January, and some are predicting the imminent collapse of the game’s economy.

In anticipation of this, and acknowledging the power of a strong network, STEPN is dedicated to building — not just a quality game that is fun, engaging, and rewarding — but a social foundation that will provide long-term success and value for all of its users.

Thus, STEPN has taken painstaking care to foster a community that is passionate about running and making connections, not just earning. For example, while many web3 projects are fixated on growth by any means — a more-people-the-better mentality — STEPN takes quite the opposite approach.

Focusing on quality, not quantity, STEPN has built bots to remove unnecessary spammers and scammers from Discord. At the same time, the team organically sources Discord managers and ambassadors directly from its user base, seeking out its most enthusiastic community members.

Further, since STEPN’s tokenomics and game design is quite complex, it dedicates considerable resources to educating the community to make sure its users are informed about the project. The founders sit down every week to answer each and every community question that comes up.

Finally, in the future STEPN also has plans to implement a rental system, where users will be able to rent sneakers out to other users. This will effectively create thousands of small, tight-knit networks within the game itself as renters and rentees create small economies of their own, adding more value on both sides as more and more people join the marketplace.

Conclusion

Network effects are incredibly powerful and underpin the internet as we know it today. Building a business in the modern age requires creating a quality network, not just quantity — this can make or break a platform in the long run.

Anticipating this, STEPN is innovating beyond just a running or fitness web3 app. It has plans to establish a strong, tight-knit network that will bolster the platform’s value for years to come.

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STEPN Official

STEPN is a Web3 lifestyle app with Social and Game elements.