Colour Sneaker_move2earn
The same accusations that plagued the play-to-earn sector have started to be hurled at move-to-earn games like Stepn. (Photo via Stepn's media kit.)

Stepn, ‘Move-To-Earn’ Games Try To Convince Doubters They’re Not Ponzis

With promises to pay people to walk, a group of new startups ask you to trust that they aren't unsustainable pyramid schemes. “Everything is a Ponzi when you’re on the sidelines,” one happy user said.

Last October, the play-to-earn game Axie Infinity was riding high. The price of one of its crypto tokens had nearly doubled in a matter of days, reaching $138, as people around the world became enamored with the novel concept that people could earn crypto playing computer games.

That same month, a new spin on the increasingly popular play-to-earn concept debuted at the Solana blockchain’s hackathon. The project, created by the Australia-based Find Satoshi Lab, was called Stepn (alternately styled as StepN or STEPN), and was described as a “move-2-earn” game in which people got paid not to play video games, but to run or walk. Find Satoshi said it hoped to “attract million[s] of non-crypto runners to the crypto realm.”


The interest in the game was high from the jump. By January, the company had announced it had raised $5 million in seed funding from investors including Sequoia Capital. “STEPN is ushering a new wave of Web3 games in what they’re coining ‘move2earn’, which likely gives rise to more sustainable and net positive gaming experiences,” said one backer at the time.

The use of the word “sustainable” was a key part of the pitch. In the time between when Stepn debuted and secured its funding, the play-to-earn landscape had shifted dramatically. In particular, Axie Infinity struggled to respond to accusations from players and critics alike that it was little more than a Ponzi scheme in disguise, and its token prices plummeted. 

Now, Stepn and a growing number of competitors in the crowded move-to-earn space have emerged with a concept as simple as it is enticing. “Players can make handsome earnings by walking, jogging, or running outdoors,” Stepn says on its website.  A Stepn competitor, Walk With Step (or Step) has plastered New York subways with the tagline: “You’re Already Moving. Earn Crypto Doing It.” Talk on social media of earning hundreds of dollars a day has only added to the intrigue. Crypto writer Nat Eliason wrote in April that he was making the equivalent of a “six-figure salary just for going outside and spending time with my wife, kid, and dogs” with Stepn and said it could become the “first crypto app with truly mass appeal.”


Simultaneously, the same accusations that plagued the play-to-earn sector have started to be hurled at move-to-earn games. Critics say the possibility of earning money indefinitely for walking is too good to be true, taking particular issue with the game’s high cost of entry, and a constant need for new users to join and old users to not cash out en masse. “It’s not quite a pyramid scheme or ponzi, but it’s darn close,” Eliason wrote of Stepn in April. (Stepn did not respond to multiple requests for comment.)

To some of the move-to-earn movement’s own users, the Ponzi accusations have quickly become something of a joke, reflecting how so-called "Ponzinomics" have become almost embraced by many risk-taking crypto traders. “Stepn is a ponzi that forces me to walk every day,” Twitter user DonCrypto wrote in May. Another user joked, “Beautiful day for a ponzi run.”

The people behind the game have tried to tackle Ponzi accusations head on. In an April blog, the company admitted that play-to-earn schemes are tightly linked to Ponzi dynamics but said Stepn could avoid the problem with active management of its tokens. 

“With STEPN's model, it is not hard to see why long-term sustainability is usually one of the first questions raised,” the company wrote this month in a blog announcing an anti-cheat system. "The longevity and stability of the game are at the forefront of the team’s priorities, evidenced by the focus on crafting robust tokenomics. While updates on the anti-cheating front may not be the promises of wealth that some ask for, it is imperative that this issue be addressed."


Move-to-earn games could become the next big thing in crypto games, as its boosters claim. But with Stepn’s token already suffering a steady decline in price, even the people playing and designing move-to-earn games are openly wondering if the projects will prove to be another house of cards wrapped in shiny new packaging. Some are even counting on it.

“At some point without new incentives the inflow will slow down,” the pseudonymous Stepn user “DonCrypto” told Motherboard in a message. “Basically the big bet is when that is going to happen.” 

Jens Willemen said he saw what was wrong with Axie Infinity firsthand while managing 120 “scholars” who played the game every day from Nepal to make money for him. 

“No one was playing the game for fun,” he said. Axie Infinity players see the game as a job— particularly in low-income countries like the Philippines and Venezuela—where people need to withdraw the money to make “ends meet,” he said. Because these workers often can't afford their own NFTs to start earning in the game, they work for "managers" who effectively rent their NFTs for a hefty cut of the profits. “We don't think that's a system that can ever work,” Willemen said. 

Willemen is now an adviser for a Dubai-based team building Step App, as well as a protocol layer geared toward similar projects. Like a lot of his competitors, Willemen believes his team’s own game will have more “sustainable tokenomics” than not only past play-to-earn flameouts, but the rest of the move-to-earn movement. “Some of these other apps feel a bit like a Ponzi, just like what happened with Axie Infinity,” said Willemen.


The typical move-to-earn game works similarly to Axie Infinity: A new user buys into the game with an initial investment, which can range from under $100 to $3,000. In return, the user gets an NFT —a digital shoe in Stepn's case—that grants them the ability to start making money. When they exercise, the user is able to earn some of the company’s signature token (in Stepn, that's GST, for Green Satoshi Tokens) but only for a set amount of time per day (say, 10 minutes). 

Players can cash out, but the game provides an incentive not to do so: They can often earn more money per day if they reinvest the money back into the system, for example, by paying to upgrade their NFT shoes or buying more of them—again, these shoes are not real—which allows them to earn for more minutes every day. The NFT shoes then become investments in and of themselves, able to be sold (or even leased) to the highest bidder. Stepn makes money from all this activity by pocketing a tax on in-app activities, including NFT trading and minting rentals. 

Stepn user DonCrypto said Stepn’s model was “very addictive.” He had been enticed by the possibility of making money for “an activity I do anyway for free,” he wrote in a Twitter direct message. DonCrypto originally paid roughly $1,000 for his first sneaker and from the start was making $60 per 10-minute walk, he said. 


But he wanted to earn more and has since spent an additional $14,000. He now has nine pairs of digital shoes, which allow him to earn $400 for a daily 50-minute walk, he said.  

Another Stepn user, Ahmed, a software engineer based in Washington, D.C., told Motherboard that the game had changed his life by giving him motivation to alter his sedentary lifestyle. “This game has incentivized me financially to get out and jog each day,” he said.

But the problems such a model faces can feel voluminous. In April, Stepn itself admitted that “most” play-to-earn games have proven to be “unsustainable” schemes of a “Ponzi-nature” that rely on “newer players constantly joining” and were generally “liable to collapse.” The U.S. government defines a Ponzi scheme as “an investment fraud that pays existing investors with funds collected from new investors.” While most crypto projects don't follow that exact playbook, "Ponzinomics" has become a popular term to describe the typical economics of a crypto project that depends on continuous investment and enthusiasm for its token price to remain high—if it crashes, then late entrants who don't cash out are the worst off, compared to investors who both got in early and dumped their tokens. 


Stepn and others in the move-to-earn movement contend they are working to figure out some solutions to their Ponzinomics problem. Eddie Lester is one such person. While developing a forthcoming “exercise-to-earn” project called MetaGym, he started to try and figure out a way to make sure his new company didn’t become a Ponzi scheme.

“What we typically see when we think of any ‘to-earn’ movement is anyone that gets into it early has a significant advantage and really—kind of like a Ponzi scheme, actually—favors the early users and then slowly takes away from those that come on later down the road,” Lester said. 

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MetaGym, Eddie Lester's new startup, promises to pay users for working out. Lester claims he has figured out a way to make his game more sustainable than the typical "Ponzi"-like play-to-earn game.(Source:

One of his main ideas for setting up a “sustainable system of earnings” is “balancing” two tokens against one another: an in-game token earned by exercising and a “governance” token, which confers voting rights in decisions affecting the project. That’s similar to a lot of Lester’s competitors, including Stepn. 

In Stepn’s case, there is an unlimited supply of GST, which can be earned from exercising, and a limited supply of so-called “governance” tokens called GMT. Stepn has attempted to maintain some price stability with a variety of tactics. For example, when the unlimited GST's price soared—making NFT sneakers pricey for new entrants—the developers added the option to spend the governance tokens to mint new sneakers and reduced the amount of necessary GST to do the same. This contracted the circulating supply  of GMT, making the tokens more valuable, and simultaneously lessened the “burn rate” of GST, reducing upward price pressure. 


To stop the app from growing too quickly, Stepn has only allowed people to join if they receive one of a limited number of activation codes that were given to active runners to hand out, though one such person said he had handed out 22 codes in the month they’ve been playing.

One thing all the companies share is a belief that move-to-earn games will prove more sustainable than Axie Infinity because people will end up enjoying the benefits of exercise more than video games. “Yes, users can make money from StepN in the early stage, but over time they will also grow accustomed to staying active, so they will continue to walk or run regardless of financial rewards,” Stepn co-founder Jerry Huang said in late May.

But this month, the company admitted that people have started to “fake” motion data and use other “dishonest tactics” to financially exploit the game and “earn more than their fair share of earnings.” Some videos online showed people who had purportedly figured out how to trick the app into thinking they were walking. 

The problem has become so “prominent,” Stepn said in a blog post, that the developer team was dedicating “nearly half” its resources to “developing anti-cheating mechanisms.” Stepn was transparent about the stakes, saying that “at worst, rampant cheating can actually undermine a game’s entire economy.” (After only three months of “training” a “machine learning algorithm,” Stepn claims to have a “best-in-class anti-cheating system.)


Willemen similarly told Motherboard that cheating has become a “big problem with all these apps now,” but he’s not naive to the fact that there will always be some level of financial motivation in any world where speculation is rampant. Instead, all he hopes to do is reduce “hyperinflation.”

“I'm not gonna sit here and say that it's all built on fundamental value because I think no system—not even any traditional system— is purely working like this,” Willemen said. “Especially in the crypto crowd, it's all about being an early mover.”

Bringing in new members, stabilizing prices, and solving cheating is not enough. The move-to-earn games also need to figure out a way to convince users to keep their money in the game. 

“People should be using the tokens to buy better sneakers,” said Willemen. “So they also spend it and put it back in the game. And it's not only extraction.”

Willemen’s company has already launched a feature in which people can lock up their governance tokens to have a chance to win an “NFT loot box” and other perks. Willemen said over 100,000 people have already chosen to do so.

Stepn and others offer up the prospect of more riches down the line if people opt to spend their tokens inside the game rather than pulling them out. People must “repair” their shoes in order to keep using them and also can earn more if they upgrade to more desirable digital sneakers. Using tokens in the game in these ways "burns" them, in theory contributing to price stability and thus the game's continued existence. 


The pitch has worked on Stepn users like Ahmed.

“I could have made back my roi weeks ago but have chosen the longer path of building up my account, getting more shoes so when I do start cashing out, it will be at a level that I’d be happy with,” Ahmed wrote in a message to Motherboard. “So I haven’t made back my money just yet, but see that happening in the near future.”

Ahmed hopes to buy enough Stepn shoes to get paid for 90 minutes of exercise everyday, which he says will earn him almost $500 per day at current prices. When I asked Ahmed where he believed the money was coming from, he said the answer was “new users.”  

Others said similar things, although many move-to-earn users expressed optimism that the games would figure out more sustainable income streams in the future. (“It may require new people to keep going at this point in the early beta,” said John, a Stepn user for a few weeks now, “but I'm just going to keep on running and earning for now.”)

The high cost of play has turned others off of Stepn. The user who joked about “taking a “ponzi run,” for example, told Motherboard he stopped using the app after deducing that “the initial cost to get profitable was possibly too high” for him.

To combat that concern, some games are toying with “freemium” models, having people pay off their digital shoe over time or even rent them “for free from other users to get started, with the earnings split later,” a feature Stepn says is coming soon and which mirrors Axie Infinity’s scholar system. One way or the other, the companies still need new users to make an initial investment to start to play, according to Willemen.


 “You need people to buy the shoes. Because otherwise there's no buying pressure on the system,” Willemen said. “It’s a very thin thread that we're walking.”

To combat the idea that they are all digital Ponzi schemes, the move-to-earn companies are hard at work thinking up creative, exotic mechanics that will rid them of the moniker. 

While searching for a low-market cap crypto token with some “fun” utility, J. Bern of the Netherlands simply chose to go with an app with a lower financial barrier to entry than Stepn. He went with Walk With Step, a mobile app that tracks metrics like steps, distance, and calories, from which an “algorithm” then calculates an overall score that determines rewards. His initial investment was 30-40 euros, which made it easy for him to make his money back, he said.

Walk With Step’s Italian founder, Carlotta Tatti, told Motherboard that she considers her own game “way more sustainable” than the competition because of her own twist on the model: a tax on each side of the transaction, whether people are buying or selling the token, that goes toward rewarding users. Sellers are taxed at 15 percent while buyers get taxed 5 percent.

As a result, Tatti doesn’t believe the Ponzi criticism is “valid” in the case of her own company, since the system also makes money when people exit.


“Our biggest competitor relies only on new users for feeding that pool,” she said, referring to Stepn. "We don't rely exclusively on new users but also on people exiting.” (The day we spoke, she also calculated the initial investment was just $150.)

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Walk With Step has plastered New York City with advertisements that offer to people pay to move. (Source: Maxwell Strachan)

Tatti said her long-term goal is to create a new crypto architecture in which human fitness performs a similar function as cryptocurrency mining, providing people a supplemental salary while they go about their lives. According to Tatti, one-fifth of Walk With Step’s users are new to crypto and many live in places like the Philippines, where Axie Infinity proved popular before it. Some even work in places like Amazon warehouses, where they are walking anyway, she said. 

“That is a lot of walking involved every day, so they are so happy” she said. 

With time, DonCrypto came to realize that “the real game” in Stepn wasn’t exercising for money, but minting new shoes, which he saw as “a perpetual money making machine.” Once users purchase two sneakers, they can create and sell their own.

“There is a mint cost that you cover by walking and the cost is lower than the market floor price of the sneaker, hence profits,” said DonCrypto.

Eliason, the crypto writer, has described Stepn’s minting system as a “runaway sneaker breeding problem.” As Eliason explained, Stepn’s setup is at risk of the same play-to-earn “doom cycle” that faced play-to-earn games before it. 

Should too many people start to mint sneakers, it would reduce sneaker prices, causing a spiral where people try to offload their sneakers in a race to the bottom. Alternatively, if too many people get the highest level of sneakers, the in-game token price will also fall since people won’t need to buy sneakers and burn tokens in the process. The question is whether Stepn’s stabilization mechanisms can adequately reduce this natural tension.

The system is so delicate that any unexpected news threatens destruction, as happened with Stepn in late May, when it announced in a series of Tweets that it would soon no longer allow people in mainland China to access the app in order to comply with local regulations. The news caused the price of GST to plunge from well over two dollars to roughly 60 cents.

DonCrypto isn’t too worried about the sustainability issues or about his $15,000 investment. “I can resell all my sneakers back to the market and recoup my initial investment,” he said. Whether that will always prove true is an open question. But for now, he’s just happy that he’s making money for something as simple as walking.

“Everything is a Ponzi when you’re on the sidelines,” he said, “and a miracle when you’re in it and make bank.”