China ban, falling profits: what’s happening with STEPN and can it recover

STEPN is one of the most hyped crypto projects in recent months. It’s a game where you can earn money for leading an active lifestyle. Not only has the game become very popular, but many people claim to have actually managed to make some money off it.

But the last week has been difficult for STEPN. Token prices within the application (it issues its own tokens to reward users) have fallen dramatically. Many investors have lost money. Let’s try to make some sense of what actually happened.

What is STEPN

STEPN is a mobile game. Its essence is simple: you buy NFT-sneakers, walk or run so that the app tracks it, and then you get paid.

The STEPN app was developed in the fall of 2021 by the Australian company Find Satoshi Lab. Its founders are Jerry Huang and Yaun Rong.

How to start playing STEPN: detailed instructions

• Download the STEPN app (IOS, Android);

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  You will need a code to register. The code can either be requested from another player or found online. The codes are published on the official game channels in Telegram and Discord.

• After that, you need to replenish your account with the Solana (SOL) or BNB coins. You can transfer them from a crypto exchange or your wallet.
• Buy a pair of the available sneakers. The application has dozens of options at different prices. Different shoes are suitable for various activities: Walker, Jogger, Runner, Trainer. Previously, the cheapest pair cost about $1,000. Now you can find them cheaper, for as much as $300. You buy sneakers for SOL or BNB.
• After purchasing the running shoes, you must turn on the app and start walking. The GPS on your phone fixes your movement. Your steps are rewarded in the app’s internal currency, GST or GMT, depending on your sneakers.
• The number of coins earned depends on the activity’s duration and the sneakers’ characteristics. Among the latter are Efficiency, Luck, Comfort, and Resilience. 
• The more pumped your sneakers are — the more you’ll be able to earn. But there’s a catch: you must also spend money on “pumping” the sneakers. Sneakers can be sold and bought in the in-game store.
• Sometimes sneakers get torn or damaged. In this case, you need to repair them — again, not for free.
• Finally, you can sell GST and GMT on a crypto exchange for fiat money.

How STEPN got popular

The word got on quickly. There are many games of this type on the market today: AGLET, Step Up, and Calo run, among others. But when STEPN launched, there was much less competition. And with fewer users than today, it was more challenging to make money in such apps.

STEPN users recently claimed to be earning thousands of dollars. For example, here’s a video of a video blogger who said he was making $400 a day.

In March, the game had 100,000 users. In May, the developers announced there were already 2.3 million users. More and more sneakers appeared in the game. Some models now cost tens of thousands of dollars.

Some users considered the project a financial pyramid from the very beginning. Anyway, as long as new people came, there was money to be made.

Why STEPN was down

The first week of June was the worst in the game’s history. On May 26, the developers announced that the project was leaving China because cryptocurrencies were prohibited there. In July, all users from China will be disconnected from STEPN.

We don’t know precisely how many STEPN users there are in China. There are reports of only about 50 thousand among the whole 3 million user base. Having lost the ability to play the game, those players rushed to sell their sneakers.

The price of the GST and GMT tokens also fell. The GST cost $7, and now its price is less than $1. GMT went up to $4, and now its price is also less than a dollar.

STEPN user experience

We spoke to a STEPN user, Aleksey, who found out about the game by chance — a couple of months ago, he saw the GMT coin growing rapidly on a crypto exchange. Alexey started to look for information about the project and found out about STEPN. The game seemed interesting, and it turned out that Aleksey’s boss had already invested in the sneakers. Alexey also decided to buy.

He bought his first pair of sneakers for $1,300. Then he increased the investment and, in total, put $5,000 into the game. Everything went well, so after two months, he began to withdraw about $200 a day. In total, he managed to withdraw about $1700.

Then Aleksey saw the opportunity to make money quickly by investing another $15–20,000 in BNB. He put all of his own money ($9,000) into it and took some from friends for a total of $18,000.

His plan didn’t work. At that moment, the developers announced their withdrawal from China. The prices within the game began to fall because the players started to sell their sneakers. Alexey and his friends decided to wait and were wrong again. Prices continued to fall. They were losing $1,000 a day. As a result, Aleksey sold his assets and recorded a loss of 74%.

“For a long time, I convinced myself that this was not a scam or a pyramid scheme. I believed in the prospects of the project. I was sure I had taken risks into account, but I was wrong. And I decided that fixing losses is the best option in this situation. In my opinion, STEPN is a well-thought-out pyramid scheme. Whoever got in first and left on time earned well. The only hope for a good future for the project is if developers come up with some kind of innovation. But due to the ban on working in China, I think the chances are low,” says Alexey.

What is next for STEPN

Even if many STEPN users are disappointed at the moment, the app is still running and continues to make money while developers are actively working to introduce new features.

In recent weeks, STEPN had to fight off several major DDOS attacks and did it successfully. The project also announced a new upgrade that effectively blocks the opportunities for cheating.

So, even given recent troubles, STEPN is by no means can be deemed a failure and, considering the growing interest in play-to-earn games, may have a still greater future.