The debate over whether play-to-earn games are sustainable has been prevalent in the crypto world, with one such game – Steppen – being scrutinized for its sustainability. Play-to-earn gaming involves playing a game and earning tokens that can be exchanged for real money. The concern is that these games rely on a steady stream of new players to sustain their economy and, without it, the game may crash to zero. As for Steppen, there are concerns over token inflation and a lack of sustainable token sinks. However, the game’s team needs to create net negative sinks to decrease inflation.
Is Stepping a Ponzi? The Truth Behind Play-to-Earn Games
Introduction: What are Play-to-Earn Games?
Play-to-earn gaming is a simple concept where players earn tokens by participating in the game. These tokens can be traded for real money and used for in-game actions. However, the criticism against play-to-earn games is that they are unsustainable and operate as Ponzi schemes.
Section 1: The Ponzi Nature of Play-to-Earn Games
The success of Play-to-Earn games depends on a steady stream of new players entering the ecosystem. If demand drops, liquidity pools get drained, and existing players take profits, leaving no money for new players. This is the essence of a Ponzi scheme. Axie Infinity, the most popular play-to-earn game, experienced a drop of 75% of daily active players as prices of tokens and NFTs dropped.
Section 2: Steppen’s Two Token System
Steppen is a move-to-earn platform where players earn tokens by physical activity. The two-token system comprises GST and GMT tokens. GST tokens are utility tokens used for in-game actions, while GMT tokens are governance tokens used to increase the probability of minting better sneakers.
Section 3: Steppen’s Unsustainable Areas
Token inflation poses a problem for Steppen, where the more users that join, the more GST is printed to reward them leading to runaway inflation. The team must design great token sinks such that the tokens stay within the ecosystem. The Steppen team must also create net-negative sinks, reducing the inflow of tokens into the ecosystem.
Conclusion: Investing in Steppen
The sustainability of stepping depends on the team creating great token sinks to reduce token inflation and keep tokens in the ecosystem. While play-to-earn games appear unsustainable, Steppen’s two-token system provides potential for a more sustainable model.