This Fitness NFT Gave Users $100 per Mile Walked

A popular NFT project on Solana‘s (SOL -8.91%) network is motivating users to get active, but does it have long-term value? In this Motley Fool Live segment from “The Crypto Show,” recorded on June 1, Fool.com contributors Travis Hoium and Chris MacDonald discuss the potential future of projects such as this one. 

Travis Hoium: This has been one of the hot NFT projects on the Solana network. It is also a token that is, I believe tradable on Coinbase so is one of the tokens that Coinbase started trading. Which is a little bit strange given what this NFT is. I will just give a little bit of background. This is not one that I own, but I looked at a couple of months ago and I couldn’t figure out how, there was really any long-term value there, so we can debate that. But the idea here is you have an NFT that is represented by a shoe. The image I have there is one of the NFTs. You buy that and then you download an app, connect your wallet as you move so you go for a mile long walk. It will reward you with tokens for moving, basically for doing fitness activities. It got to the point where people were earning a $100 to go for a mile walk. Now you had to buy an NFT to earn that token. Then you had to turn around and sell that because if you’re holding the token and it collapses, which it has over the last couple of weeks, then you’re not actually earning $100, you are earnings significantly less.

But the idea here is, it goes into the tokenomics of play to earn, move to earn, do something, to earn a token. I think a lot of people in the NFT and cryptocurrency communities are really interested in, but we don’t really have a full understanding of what will make these systems sustainable long term. The two tokens involved here GMT, which is the governance token, that is the one that is typically called the STEPN token. That is what reached about a three billion dollar valuation, I believe. Then GST which is significantly smaller, that’s actually the token that you earned for moving. But both of those have dropped in value recently. But they did have some really big market caps. Even the GST would’ve been close to a billion dollars at its peak. But it’s an interesting concept to say, hey, if you move you can earn something.

What I didn’t see in their road map and in their current business model is where the money is coming in, except for traders coming in and buying the token, speculating on the price of the token. Some of the other projects that we’ve talked about, like medical blockchain, you would sell data or sell something to somebody who is interested in buying it or advertising with your products. There will be funding coming into the token and then as a user, you would be monetizing that funding indirectly. But I think it’s a really hot project. It did generate a lot of value for people who bought in early and were able to earn that token for moving. Then you have to spend some of that total stockings to upgrade shoes as you wore them out. Interesting concept. I don’t know how much you guys dove into this, but it hasn’t proven to be particularly sustainable over the last few months. But we’ll see if it can make a comeback a little lower level.

Chris MacDonald: I have to agree on everything that you just said there Travis, the altruistic element with this is certainly good. On the one hand, I’m thinking, the sustainability of the model is a key issue. If they’re only getting revenue by selling their shoe NFTs then essentially giving that money back to people who are walking. If people stopped buying these shoes then they can’t keep paying, or people stopped speculating on the token and it kind of falls apart. However, if you buy this shoe and you run a 100 miles at the end of the day, even if you lose your money, you still are a bit healthier.

Jon Quast: Altruistic, Chris.

Chris MacDonald: Yeah, there you go. I like these stories that you’re trying to do something good and there’s a purpose behind it. But like you said, sustainability of it. This is one that screams out to me like Anchor did with Terra, that it’s not sustainable. I don’t see how it is. But who’s to say they won’t put Nike on the side of their sneakers.

Travis Hoium: That’s what’s interesting here is they had some pretty big backers. I mean, they are venture backed. There’s some really big names behind them. I was interested that there wasn’t a more flushed out business model here because it does seem like something where Nike, Garmin, just thinking about like I wear a Garmin watch, why isn’t that a perfect tie to something like the STEPN, because it could just connect. That’s what some of these medical NFTs are starting to do is say like, we’ll connect with these different fitness apps. Then you have lots of different advertising that you can bring in instead of sending me flyers in the mail, now you know, on the blockchain what my activity level is, that should be pretty valuable data that you can bring into the tokenomics. Yes, definitely possible that they bring that into the future, I have not seen that yet and I have been a little bit surprised that that hasn’t been a piece of the business model, but this is early step in the right direction, maybe in trying to figure out these business models. We’ll see where it goes from here.