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Play-to-earn projects were hugely popular at the beginning of last year and still are. And now, with STEPN, a FitFi app is coming that is triggering a real hype.

Hundreds of videos are published on TikTok , in which enthusiastic users tell how they make 50-100 euros from a 10-minute walk. Others film themselves jogging and rave about how they can generate passive income during workouts thanks to FitFi.

But can this be true? Can you make money by walking or jogging? Sounds kind of too good to be true and tastes a lot like a Ponzi scheme. That’s why I took a closer look at the phenomenon and at the beginning of the week started a self-test with the currently most popular FitFi app called STEPN .

A self-experiment with the STEPN app

The STEPN app can easily be downloaded from the App Store. But when I register, I already encounter the first hurdle. I need an activation code. On the Internet I find out that I either have to get this from friends who are already using the app, or that 1,000 new codes are activated on the STEPN website every day at 3:00 p.m. sharp.

Since I don’t know anyone who uses the app, I visit the website two days later and get hold of an activation code. Finally we can start. But the next shock follows immediately. In order to use the app, I first have to buy a digital shoe. Cost: 10 Solana (about 1,000 USD). I close the app, puzzled. I can’t get used to the idea of spending the price of an iPhone on a digital NFT sneaker.

The money is calling

But the app won’t let me rest, so two days later I decide to watch the whole thing again. Unfortunately, the price for the cheapest NFT sneakers has already risen to 13 Solana (about 1,264 USD). Grinding my teeth – on the one hand because of the astronomically high price, on the other hand because of the lost profit – I send Solana (SOL) from the crypto exchange to the STEPN app and buy a sneaker. It’s a strange feeling: instead of a new iPhone, I now own a digital NFT shoe. I’m still unsure whether I’m ‘the biggest idiot in town’ or an ‘early mover genius ahead of the curve’.

Now it’s time to put on jogging clothes and earn money. But unfortunately I have to realize that I have no energy – digital energy, of course. According to the app, I get 0.5 energy points every 6 hours, which allow me to go jogging for 2.5 minutes for a fee. So I can run FitFi for a maximum of 10 minutes per day. If I want to run longer, I have to buy more sneakers or upgrade my existing ones with the cryptocurrency I have earned.

Earning money with STEPN works quite well

Six hours later I set off with my first energy. The app uses GPS to recognize how fast and how far I am running. And indeed, after 2.5 minutes of jogging, I am credited with 2.75 Green Satoshi Tokens (GST) with a total value of around 14 USD. After deducting the repair costs (about 2 USD) for my now somewhat worn digital sneaker, I earned 12 USD in 2.5 minutes of jogging. Not bad at all.

I repeat the whole thing three more times within the next 24 hours and so after one day I have earned around 60 USD, whereby the strong price increase of the GST has helped a lot. I now exchange the earned GST into USDC and send it back “safe” to my crypto exchange via the Solana network, which works smoothly.

Therefore check who binds himself

My head is rattling and calculating now. If I do this every day, the price of the NFT sneaker would have amortized after 20-25 days, or rather it “ran out”. In addition, I would still own the NFT sneaker and could resell it if necessary for hopefully at least the purchase price. A worthwhile business.

But the emotional high is short-lived. Soon the left brain brings me back down to earth with logic and rationality. “Something can’t work out here,” I think to myself. “Why should anyone – except maybe my health insurance company – have an interest in paying me for my sporting activities?”

Is STEPN a Ponzi scheme ?

As is so often the case in the crypto world, a closer look is once again required. Because if you look at the details, you often find old wine in new bottles. After I found a LinkedIn post about FitFi Ponzis, I ask the author what the difference is between a good crypto game and a Ponzi scheme. His answer is simple and immediately helps me to see more clearly.

He says: “Consider whether there is a natural demand for the game or service that is independent of the monetary component. Or are the users mainly concerned with extracting as much monetary value as possible from the game.” In plain English: Would I use the app even if I didn’t get any money for it?

For STEPN, the answer for me is clearly “no”. The fun and benefits are simply not enough for me. The app is funny and jogging makes you feel like you really deserve the tokens. After all, expending physical energy somehow feels like work that should be rewarded.

Two sneakers can also be “created” from other sneakers, which can be resold for good money. The game is also designed in such a way that players have a strong incentive to invest a large part of the tokens they earn directly. As a result, the GST rose sharply at times.

So the whole thing seems playful, everyone can take part and the concept is exciting because it has never existed in this form before. The catch, however, is that the concept only works as long as new players are constantly being added. The main goal of the vast majority of players is likely to be to make money. The immediate sale of the tokens that have been earned is delayed by the numerous opportunities to reinvest them. But in the end, players want to earn as many tokens as possible and exchange them for other crypto or fiat currencies.

If at some point fewer and fewer new players come along and meet an ever larger number of existing players, there will be fewer and fewer buyers for the newly created sneakers. This causes their price to implode. In addition, more and more players will want to sell off the GST they have earned, while only a few players will ask for the tokens to upgrade their shoes. This will also depress the price of the GST.

However, as the GST price falls, players earn less and less for their sporting activities, which in turn makes the game unattractive for new players and thus increases the downward spiral.

An exciting example of a play-to-earn crypto game currently in such a phase is Axie Infinity. There, the price for an Axie NFT has fallen by a factor of 10 in recent months. It is more than uncertain whether the price will ever recover. The losers are once again the latest to come, who bought in for big bucks and are now seeing the value of their NFTs plummeting at a rapid pace.

Happy ending or black eye?

After these considerations, yesterday morning I set off on a last jogging session in bright sunshine and earned another 60 USD. After that, I advertised my NFT sneaker for 16.5 SOL (about 1,556 USD) on the STEPN marketplace. Luckily for me, the price of the digital shoes has risen sharply again over the past few days.

To my astonishment, it said that I had to give 4 percent of the sales proceeds to the artist (which artist?) and an additional 2 percent transaction fee. That means: 97 USD goodbye.

The shoe was sold within an hour. All in all, I earned 130 USD by jogging on the STEPN app for two days, and another 250 USD by selling my digital NFT sneaker higher. So a happy ending?

Probably got away with a blue one. Just a few hours later, the GST has fallen by 30 percent and sneaker prices have fallen back to 12-13 Solana (SOL). Maybe this was just a small bump on STEPN’s continued upward journey, but in the long run this hype will probably die down too, leaving thousands of gamers with dearly bought, worthless digital sneakers.

But the next FitFi app is already in the starting blocks. Step App launched their token Step App (FITFI) a few days ago. The accompanying app will soon be available in the app stores. So a sporty step into the next Ponzi? We will see.