Can't keep blaming X to Earn for Stepn's issues anymore

Author: Twitter: @26x14eth

1: Whether an economic system is stable essentially looks at the dynamic relationship between token output and token consumption.

A user buys an NFT as an entry ticket; if they wish to make a profit, the fiat price of the tokens they earn within a certain period must cover the cost of the NFT they purchased within their expected timeframe, or the price of the NFT in the secondary market must continue to rise. However, the continuous increase in the secondary price of NFTs is difficult to sustain; the fiat price of the tokens earned is also highly correlated with the efficiency of token consumption. Especially in the current "dual-token" model, where in-game tokens are produced in unlimited quantities, the consumption efficiency of tokens in the market is hard to keep up with, necessitating the identification of "paying" players.

What factors are related to the efficiency of token consumption? The diversification and complexity of interaction scenarios, addictive design, and users' social asset flaunting. The thinner the product, the harder it is to achieve sufficient satisfaction in the design of token consumption efficiency. Therefore, a highly playable SLG game has the potential for a long lifecycle. Conversely, if a tool-like product suddenly becomes popular at a certain time, leading to a surge in the entry ticket price of NFTs, while the fiat price of in-game tokens depreciates due to untimely token consumption, it is very likely to be quickly abandoned by users.

2: When we examine X to Earn projects today, we largely need to see what X is, and whether the corresponding scenarios and products have significant space to design token consumption.

The problem with Stepn is the inherent limitations of the scenario. You cannot stare at your phone screen while running or walking; it just stays silent in your pocket; and when you are not running or walking, you are even less likely to open this app.

In such a scenario, how can users derive enough enjoyment to pay? If there is no online earning attribute, how many users would willingly lose money to buy its NFT? Some say that buying a gym membership without exercising benefits the offline gym, which is a business model, but how many offline gyms can continuously make a profit? In web3, if you buy an NFT but do not engage in activities and do not claim tokens, you are indeed giving profits to the project party, but you are not enjoying the experience while paying; you would complain about it, and the resulting negative public opinion would affect the platform's ability to continuously attract users.

Stepn also struggles to integrate social features to increase richer token consumption. It is hard to imagine that an app whose core function does not allow users to keep their eyes on the screen can successfully penetrate social aspects. No running app in Web2 has successfully integrated social features, except for those with online earning elements. Even WeChat has not successfully made the running feature social; haven’t you also quietly turned off the running friend reminders on WeChat?

Stepn also does not provide users with enough social assets to flaunt, whereas RTFKT, which follows the IP route, finds it easier to achieve this. Whether this area can make a mark is determined by its temperament, and the product's first-day user experience and vibe are crucial.

3: There is no difference between off-chain products in web2 and web3, and user screens are the same. Web3 tokens do not solve the issue of whether users are willing to pay for scenarios or products. If a similar product or scenario finds it difficult to get users to pay in web2, it will also struggle in web3. Therefore, for the X to Earn model to be healthy, it should actively seek what X is that can already generate revenue from users in web2, and on this basis, it must also meet effective verification capabilities to prevent fraudulent activities.

Game Meta, live streaming, voice chat rooms, online literature, these X scenarios are both "breaking the circle" for web3 and have high-frequency product interactions and stickiness, and they have already been validated in web2 for their ability to charge users directly. In the context of web3, it is also necessary to consider which aspects can effectively prevent bot scripts.

If X to Earn does not address whether users pay, then what does it solve? It solves the acquisition of new users and the resonance between creators' productivity and platform interests. Without a paying user model, relying solely on new user acquisition and incentives for creators will still be difficult to sustain.

However, some argue that token acquisition will only attract users with profit motives, and users willing to pay will not come from this channel; they are still in traditional web2 advertising channels. Therefore, in the future, there will be more and more web2.5 models that support both web2 users' free-to-play + premium channels and web3's NFT + token channels, gradually guiding web2 users into web3, allowing users who contribute DAU and earn tokens to serve and satisfy paying users. Additionally, this will improve over time; with changes in public opinion, media, and the overall climate, the users brought in through token channels will increasingly include those willing to pay for products, especially the younger generation, which is already changing.