Getting Paid Money To Move

GM frens,

It’s been another exciting week in the Web3 World.

Outside of A16 announcing their 4th crypto focused fund to the sum of $4.5 billion dollars, this week tech crunch broke the news that the exercise to earn NFT game StepN is generating $3 - $5 million in net profit daily!

In today’s edition of The Ground Floor we will be breaking down the past, the present, and the potential future of StepN.

If you haven’t done so already, please subscribe below so you never miss one!

Exercise To Earn With StepN

Breaking down the past, the present, and the potential future of StepN...

2021 was a big year for play to earn games.

Now, it looks like 2022 could be the year whereby exercise to earn games take off.

At the center of this newly formed compensation structure is StepN.

Building StepN

StepN was co-founded by Huang and Yawn Rong from Adelaide, Australia.

StepN debuted at a Solana hackathon back in October 2021.

Having successfully made it to the last 4 projects in this competition, StepN was able to acquire its first beta users at this event.

From here, they officially launched two months later in December 2021.

Raising Venture Capital

StepN isn’t your typical NFT project.

Instead, StepN is a startup leveraging the solana blockchain to create and scale a model whereby participants purchase in-game assets, and in turn earn compensation when they complete certain action — in this case, exercising.

With this pitch, they were able to secure $5 million from one of the very best investors in Silicon Valley, Sequoia Capital and others in November 2021.

Armed with this capital, the team has been in hyper growth mode ever since.

Exponential Growth

StepN proved to be an immediate hit with a growing community of people interested in exercising to earn money.

To sustain this exponential growth — the team had to cap the number of people who were able to access the product each day, adopting a very similar model to Clubhouse where users need an access code to access the app.

Today, StepN has between 2-3 million monthly active users worldwide.

How Does StepN Make Money?

Currently, the cost of entry to participate in this exercise to earn game is 11.7 SOL ~ $580, however, users can purchase more premium shoes which allow them to earn extra in-game currency which they can exchange for dollars.

When it comes to making money, StepN has adopted the same model as Yuga Labs, whereby they earn money from secondary sales of StepN NFTs — capturing 6% of the value of each transaction.

While 6% might not sound like much, StepN recently reported that they are generating between $3 - $5 million in net profit from trading fees each day.

For context, Doodles has earned ~ $14.8 million since the project's inception.

Is This Growth Sustainable?

For play to earn games to succeed, they need to constantly acquire new users.

This isn’t an issue StepN has encountered to date, with users having minted 91,424 new StepN shoes in the last week alone, and 16,087 in the last 24 hours, however, StepN is less than 6 months old.

It remains unclear if StepN will suffer the same fate as many of the innovative play to earn games that have come before it such as Axie Infinity.

In the case of Axie Infinity, the project had a very similar experience to StepN whereby they experienced a massive surge in demand for many months resulting in the in-game currency surging to over $160 per coin back in December.

Today, this in-game currency has declined in value to $20.49 per coin.

Looking Forward

While making money buying & selling NFTs has certainly proven to be a sufficient motivation to onboard the first million users to NFTs — we are not convinced that this will be sufficient to onboard the next billion users into the Web3 World.

If nothing else, StepN is succeeding in on-boarding millions of people into the Web3 World, without the lure of simply making money.

This is a massive achievement, however, there’s no denying that should StepN have any aspirations of being around a decade from now — they will need to learn many valuable lessons from the mistakes similar Web3 apps such as Axie Infinite have made.

3 Things You Need to Know

1) Major News For LinksDAO

Staying on the topic of the intersection between sports & the Web3 World…

This week LinksDAO, founded by Mike Dudas, Jim Daily & Chris Maddern announced a partnership with the billion dollar golf brand Callaway whereby the LinksDAO community will receive access to a long list of exclusive benefits!

This marks the very first move Callaway, a $3.9 billion dollar publicly traded company has made into the Web3 world, however, we suspect this is just the beginning of sports branding participating in this new economy.

2) When A Picture Paints A Thousand Words

Last weekend, GaryVee’s fleet of fans made their way to Minnesota for the very first VeeCon Web3 focused conference.

The conference was an outstanding success, however, this image began circulating on social media which painted an all too accurate picture of who was overwhelmingly in attendance at the inaugural VeeCon.

3) Too Good To Be True?

Free NFT mints have taken the Web3 World by storm this week.

At the time of writing, AIMoonBirds & Goblintown.wtf have exceeded 5,700 ETH ~ over $10 million in total trading volume in 24 hours.

With this excitement, scammers are making their very best efforts to trick people into minting more free NFTs such that they can drain people’s wallets.

The following is a great thread breaking down this bad behavior!

Tweet of the Week

It’s becoming ever more important for Web3 projects to offer utility.

Simultaneously, it’s equally as important for the founders of these projects to understand users underlying motivations for wanting “utility”.

Do these users want utility such that they can benefit from using these products / services… or do they simply want the number to go up?

Community Update

Degen Minting Channel Call Turned Blue Chip?

Have you heard of the new Goblins that have taken over the NFT world by storm? goblintown.wtf was called out in the Floor alpha channel when it was minting and a few members got in sub 0.1 ETH.

Now these Goblins are trading above 2 ETH each. Goblin Town has been running off meme’s since day 1 with many speculating that it was a stealth drop by Yuga Labs.

Now, there is no backing to those claims, nor do people believe that rumor any longer but it is interesting to see how meme’s and rumors could launch a free mint project into potential blue chip territory.

In just 6 days alone it has done nearly 10,000 ETH in trading volume on OpenSea alone earning it a verification badge in just a few days time.

Thanks for the read,

See you next time! — OB1, Pet & Corwin.

This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity.