Is STEPN [GMT]’s failure a consequence of the tokenomics strategy?  Here’s the review

Is STEPN [GMT]’s failure a consequence of the tokenomics strategy? Here’s the review

Is STEPN [GMT]’s failure a consequence of the tokenomics strategy?  Here’s the review

STEPN [GMT] was recently highlighted in a recent Messari Twitter wire showing his achievements before and after Solana. evaluated [SOL] network trouble. The thread shows how market changes can disrupt and potentially destabilize dapps.

According to the Messari report, Solana accounted for about 20% of the fees generated by Solana users before the crash. This was during the second quarter of 2021, during which STEPN leveraged Solana’s robust growth.

Fast forward to the present and STEPN struggles to gain new users, profitability is significantly lower.

A faulty token model?

Many upcoming crypto projects are taking advantage of the hype surrounding the crypto market. They often align their platform mechanisms with user growth and use the incoming revenue to pay users as part of their tokenomics strategy. However, this approach often does not take into account the other side of the coin.

The market is subject to wild swings where prices can fall and interest rates fall as well. This is exactly what happened when the market crash came. This was followed by other challenges, such as Solana’s network downtime. These events are adversely affecting STEPN’s user growth and profitability.

The tokenomics model overinflated STEPN’s native token GMT. This outcome made the ecosystem less attractive. So this impacted STEPN’s ability to attract new users, while also discouraging most existing users.

Plans for a comeback

STEPN is another project based on an interesting and appealing model. Unfortunately, it is one of many that has been let down by a bad tokenomics model. STEPN may need to pursue a different tokenomics and financial model in pursuit of future success.

Recognizing the need to do things differently, STEPN’s developers have highlighted plans for the future of the platform. The platform aims to generate value for its users by pursuing new revenue streams. A recent blog post from STEPN noted that the platform,

“Introduced new revenue streams to create value for our community members – we launched our own decentralized exchange, DOOAR, to channel additional money into STEPN’s ecosystem.”

One of the key points of STEPN’s journey is the value of having the right tokenomics. An important aspect that dapp developers should take into account. Bad tokenomics can get in the way of success, no matter how good their idea is.

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