“In August of last year, we were really bored. We were semi-retired and had nothing to do. I had turned my business over to fund managers, and I was just making Legos at home,” Rong said..
“We started this project as something meaningful to do. We wanted to build a mini-game, running on the blockchain, to fight climate change.
“We donate part of our profits to buy carbon offset credits, and we also help people get healthier. We were still confined at the time and wanted to get people outside and exercise.
How it works
The game became so popular so quickly while still in beta mode that to moderate the influx of users, the company now only releases 2000 access codes every day, via Telegram and Discord. This helped keep the hype around the game going, but also allowed the founders to continue developing the app’s infrastructure while early adopters tried it out.
Once users have an access code and signed up, they must purchase and transfer Solana’s native cryptocurrency, SOL, to their StepN wallet, which can then be used to purchase their first pair of digital sneakers.
StepN’s digital sneaker marketplace.
The problem? The sneakers cost over 12 SOL each, which equates to around $985. Last week it would have cost $1200, but SOL sold alongside all other cryptocurrencies. The most expensive sneakers cost the equivalent of $820,000.
“We targeted the affluent population who can spend thousands of dollars on virtual sneakers, and people concerned about their mental and physical health, as well as climate change,” Rong said.
“These people are traditionally hard to target, but with tokenomics they help us spread the word.
“I studied molecular biology in college, and it’s like the spread of a virus.”
A note from Delphi Digital earlier this month indicated that StepN’s SOL transaction volumes were so high that it had already become the dominant force within the Solana NFT ecosystem, with volumes reaching $57 million ( $82.8 million) per day. This volume generates revenue for StepN, which charges a 6% fee (2% trading fee and 4% royalty) on every trade in its app.
Each pair of sneakers comes with characteristics – rarity, stats and energy, which influence the earning power (token generation) of a wearer.
Each energy point allows users to earn rewards for five minutes of training, and 25% of energy is replenished every six hours. The app tracks a user’s steps, movements, and GPS location to prevent cheating.
The company, Rong said, also has ongoing partnerships with Nike and Adidas to launch NFT sneakers.
While the app was an instant hit with users, investors were sent on a wild ride thanks to its token price volatility.
The startup has two tokens: its utility token Green Satoshi (GST), which has unlimited supply, and the Green Metaverse (GMT) token, its governance token. In early March, StepN GMT was priced at just US$1¢, but in late April it peaked at over US$4, before falling back to around US$1.57. It slipped to US82¢ in last week’s crash.
Prior to the sale, early investors raved about how the returns outpaced tech unicorn Canva. Although volatility has put a hammer to these returns, the tokens are still worth hundreds of times more than what early investors bought them for.
Mr. Rong said the sale did not affect StepN.
“While the crypto market liquidated over $1 trillion in three days, our user growth was not affected at all. It’s certainly good to see the bubble getting tighter and still when it happens , the real opportunity emerges.
“STEPN came out during the bear market and we’ve been fighting this battle against the wind since day one, so I actually didn’t feel anything.”
The early investors are all subject to escrow agreements, in which they cannot sell any tokens for at least 12 months.
Mr Shi, who also invested in Catapult Sports, Airtasker and Sezzle before they listed, said he had been a significant investor in the company’s $5 million raise. He says he evaluates crypto opportunities like StepN the same way he does any seed investment.
“I pass for a traditional VC, and also for a Web3 and crypto investor,” he said.
“I know the team. I almost decided to invest after the first meeting with one of the founders, Jerry, who has a very good and solid background.
“I look at people’s stories, where they come from and how desperate they are to succeed.”