Jun 22, 2022
Move to Earn: When Fitness Pays
Most people want to improve their health and fitness. And yet, more than 60% of US adults do not engage in enough physical activity whereas a staggering 25% are almost completely inactive.
These figures aren’t much better when looking at the global perspective, since more than 28% of adults worldwide don’t get enough physical activity.
Move-to-earn (M2E) looks to change this by providing financial incentives for individuals to increase their physical activity and, in turn, improve their health. Leveraging a combination of activity tracking, blockchain technology, non-fungible tokens, and cryptocurrencies, these Web3 applications are now fueling a new wave of interest in health and fitness.
It is widely agreed that the move-to-earn industry is derived from the success of the recent play-to-earn boom — which saw users earn potentially lucrative rewards for playing, competing in, and creating content for their favorite games.
Now, there are well over a dozen move-to-earn applications in operation, many of which have generated significant hype in recent months.
The Boom
The term ‘move-to-earn’ was first coined by the blockchain-based gamified NFT application known as Genopets back in August 2021. But it was arguably popularized months later by STEPN, a blockchain-based fitness and lifestyle app that rewards users for walking, jogging, and running.
In the last year, move-to-earn applications have exploded in number and diversity, and there is now a wide range of platforms that reward users for improving their health through fitness. That said, the industry was still relatively small and obscure until the STEPN token sale on Binance — where the project raised $4.2 million.
Shortly after, STEPN conducted its token generation event, and the project saw its market capitalization swell from under $10 million to over $2 billion in under two months. It also racked up more than 200,000 unique users and 150,000 Sneaker NFTs minted. Many of these users were completely new to the cryptocurrency industry, painting STEPN as a major retail on-ramp.
This meteoric growth saw STEPN separate itself from an otherwise declining market, allowing its native tokens to multiply in value while Bitcoin (BTC) and other major cryptocurrencies demonstrated a strong bearish trend.
As you might expect, a large part of the reason behind STEPNs success stems from the fact that its benefits are twofold: not only does it help users improve their fitness by increasing their activity, but it also provides financial incentives for doing so. Indeed, with the right combination of NFT sneakers and physical activity, it is possible to earn upwards of $1,000 per day using the app. That said, the vast majority of users will earn somewhere in the order of $10-$30/day with basic NFTs.
Riding on the trail blazed by STEPN, a wide variety of new move-to-earn projects have been launched, and there are dozens pending their public launch. Though many of these can be considered simple STEPN clones, others are looking to improve on STEPN’s model using a variety of innovations.
Market Leaders
As we previously touched on, the move-to-earn landscape is currently dominated by STEPN, which has a market capitalization that exceeds that of all other move-to-earn projects combined.
It also leads the market in terms of public perception thanks to its success on the Google Play Store and Apple App Store, where it managed to climb the rankings to take a place among the top 50 most popular apps.
Now that STEPN has proved the market, a wide variety of move-to-earn platforms are now in development, and many are now up and running. Most attempt to bring something new to the market whereas a small handful lacks any major distinguishing features or ambition.
Some of the most prominent M2E projects currently include:
Sweatcoin
Sweatcoin is a simple fitness application that rewards users in the form of an in-app currency known as SWEAT for being active. Launched back in 2015, Sweatcoin is by far the best-known fitness rewards platform and currently has a staggering 75 million users.
Despite this, it cannot currently be considered the largest move-to-earn platform, since it doesn’t offer blockchain-based rewards. That said, Sweatcoin is poised to migrate to the blockchain in summer 2022, at which point the in-app SWEAT reward point will be minted as a token on the NEAR blockchain.
The platform has an extensive ecosystem of more than 600 partners, many of which tie into its rewards program. SWEAT tokens can be spent in Sweatcoin’s in-app marketplace on a range of goodies and discounts.
“For every 1,000 steps you take, you earn a Sweatcoin that can be redeemed for goods and services in the app from brands including Sonos and Reebok, or to donate to important charities such as Save the Children via Sweatcoin for Good,” said Anton Derlyatka, Co-founder at Sweatcoin.
Step App
What once appeared to be a simple STEPN copycat has now evolved into potentially one of the most promising fitness rewards applications.
The platform is set to incorporate blockchain, metaverse, and augmented reality technology to provide an immersive move-to-earn experience that makes getting fit both fun and rewarding.
Step App is unusual among M2E platforms in that users do not (currently) need to buy SNEAK NFTs to begin participating. Instead, they can simply stake the platform’s native governance token (FITFI) to earn lootboxes that can contain these NFTs.
The platform is also hoping to power an entire FitFi metaverse with the Step Protocol SDK — which third parties can use to build move-to-earn and FitFi applications.
MoveZ
Billed as the first deflationary move-to-earn project, MoveZ looks to provide a sustainable platform that rewards users for getting fit — whether that be by running, swimming, surfing, or more.
Like Step App, MoveZ doesn’t require users to purchase NFTs to begin earning since it features NFT lending, organizational accounts, and (in a later update) NFT sharding. Together these help to make it one of the most accessible move-to-earn applications.
Besides rewarding users for their fitness efforts, MoveZ also incorporates several gamification and competition features that help users get to most out of the app. This includes personalized challenges, local events, and a variety of leaderboards, which some of the more competitive users can take opt to take advantage of.
The MoveZ app is currently in closed beta and expected to launch for the public in Q2 2022.
Genopets
One of the earliest move-to-earn platforms, Genopets is completely different from many M2E projects in that it is centered around digital critters known as Genopets — which are raised, battled, and nurtured as part of a massive online role-playing game.
Like the other entrants on this list, Genopets uses the physical activity of users and allows them to earn rewards for being active. But unusually, this activity data is also used as part of a meditative, tranquil experience that sees them slowly imbue their Genopets with their quirks and personality.
Built on the Solana blockchain, Genopets hopes to provide a competitive, engaging, and social experience that helps players improve their physical, mental, and emotional health — all while earning $KI rewards.
Benefits and Drawbacks
The Move-to-earn model is widely thought of as a promising innovation for the fitness industry and may be able to help hundreds of millions of people worldwide better achieve their health and fitness goals.
But it’s not perfect. While it has several clear benefits, many M2E applications are currently struggling with several common drawbacks. These are briefly outlined below:
Benefits:
- Profitable fitness: Rewarding individuals for improving their fitness sits at the core of the move-to-earn model. By providing rewards that are usually directly tied to a user’s fitness output and/or for completing specific fitness milestones, they help to provide the boost needed for users to progress along their fitness journey. Various studies have found that financial incentives can directly contribute to improved physical fitness in adults, including this recent meta-analysis of over 23 studies. In addition, larger rewards are shown to motivate otherwise unmotivated individuals to improve their fitness.
- Multiple access paths: To help make move-to-earn opportunities as accessible as possible, many M2E applications include a variety of potential access paths — ensuring that even those from low-income regions can access the applications without necessarily needing to shell out potentially sizable sums to access M2E opportunities. Some of these alternate access paths include STEPN’s NFT lending and revenue share system as well as MoveZ’ organization account solution — which allows groups and firms to onboard users and incentivize activity through a shared pool.
- Social opportunities: Since fitness is often as much a social endeavor as it is a health one, many move-to-earn platforms are beginning to incorporate social features — allowing participants to form communities and engage with one another in various ways. This includes local and international events, competitions, meetups, and more. Perhaps the most prominent example of this is MoveZ’ boost zone feature, which allows users to increase their rewards by exercising in specific local zones and interacting with the local community.
- Athlete exposure: Most M2E applications have public leaderboards which are used to track the relative performance of users. These can be local, national, or even international leaderboards, which participants can climb by competing with other users. In some cases, this performance can be used to secure sponsorships and allows athletes to gain recognition and exposure for their achievements.
Drawbacks:
- Gamability: Move-to-earn applications typically rely on fitness data tracked by wearables or the device itself. While this data is generally accurate, it can often be manipulated in various ways to falsify the amount of activity it detects which, in turn, can be used to fraudulently increase the rewards earned. Though many M2E applications use techniques like machine learning and GPS data to help detect cheating, some fraction of the reward pool will always be siphoned off by fraudsters — reducing the rewards for genuine users.
- Speculative: Since the vast majority of move-to-earn applications reward users in a volatile cryptocurrency (e.g STEPN’s GST or Step App’s KCAL), the amount people earn can fluctuate over time, irrespective of their exercise output. In some cases, this can be beneficial if the token appreciates in value, but more often than not it will be a drawback when the token loses value.
- Poor sustainability: Depending on the tokenomics of the platform’s utility and reward tokens, it is common to see M2E applications with highly inflative token supplies. Since these tokens often have limited utility other than staking and rewarding users, this can lead to significant downward pressure on the market, gradually diminishing the value of the rewards. Likewise, since users can often earn tens, hundreds, or potentially even thousands of dollars per day using the app, this can lead to a rapid influx of new users, further increasing supply-side demand.
- Limited accessibility: In order to balance sustainability with rewards many M2E applications limit both the number of users that can earn at any one time (e.g. STEPN’s invitation feature) and the amount of rewards distributed per day. This, combined with the requirement to hold either expensive NFTs or a large amount of governance tokens to participate can make it difficult for regular users to begin earning.
Future Outlook
With some of the most popular move-to-earn applications now racking up hundreds of thousands to millions of participants, it is clear that the model has the potential to motivate a huge number of people to take charge of their fitness.
However, In their current iteration, many Move-to-Earn platforms are unlikely to be viable long term. Ranging from potentially significant inflation to high barriers to entry, and excessive returns for a small handful of users, many M2E applications suffer from extreme supply-side pressure — which can drive down the value of rewards for users.
That said, many move-to-earn projects are beginning to take measures to better balance supply with demand, such as by improving token utility, limiting the number of participants, adding burn functionality, and providing rewards that are commensurate with effort. Others are beginning to unveil innovations that could catalyze a measurable change in many people’s lives — such as STEPN’s upcoming quest system and social elements, MoveZ boost zone functionality, and Sweatcoin’s powerful charity initiatives.
It is likely that while many M2E applications will experience prolific short-term success, only the most adaptable and sustainable will be able to survive in a post-speculative era. The others will likely slowly erode value and users to the few platforms with the right mix of features, team, community, and partners.
Want to learn more about blockchain technology and keep informed of the latest Master Ventures news? Consider following us on Twitter and Medium!
About Master Ventures
Master Ventures is a blockchain-focused venture studio helping to build the next generation of blockchain-based Web 3.0 system innovations within the crypto industry. Launched in 2018 by Founder and CEO Kyle Chassé, the company’s ethos can best be summarized in the acronym #BeBOLD: Benevolent, Open, Love, Decentralized.
Master Ventures co-creates with entrepreneurs and businesses worldwide to turn the best ideas into innovative and disruptive products. They do this by investing as strategic partners through offering advisory services to the projects they believe in. To date, Master Ventures has invested in over 40 crypto projects, including the likes of Kraken, Coinbase, Bitfinex, Reef, DAO Maker, Mantra DAO, Thorchain, and Elrond.
For any questions, please feel free to reach out to us on:
