Gamification, or the incorporation of game-like features to enhance activities, is an important component of many Web3 services and the unfolding metaverse. In the context of blockchain, these emerging technologies enable users to monetize their time, data, and efforts.
One form of gamification gaining more traction is the move-to-earn (M2E) model. Also known as FitnessFi (Fitness + decentralized finance), this emerging model incentivizes physical activities (jogging, walking, exercise, etc.) by applying a combination of features drawn from blockchain and existing technologies.
Get paid to walk? Sounds easy, but is there a catch? To explore this intriguing concept, we invited Oleg Fomenko, the co-founder of the move-to-earn app Sweatcoin, to share his views. In our one-on-one conversation, Oleg describes how fitness merges with finance, highlights the ways to get started, and discusses the economic value of the rewards generated through participation.
Please shed some light on the concept of move-to-earn. How does it differ from the play-to-earn model?
Oleg: All ‘to-earn’ models seek to incentivize a behavior by offering a reward of some kind for it. Play-to-earn incentivizes consumers to play games to win digital rewards (a token, NFT, digital accessory, etc.)…arguably a web3 variation on the ‘attention economy’ we all know so well.
Move-to-earn seeks to incentivize something a little more beneficial to society, i.e., physical movement, that benefits not only our physical and mental health as individuals but our communities, our employers, and our economy as a whole. If we’re healthier and happier, we are more productive!
Most of the “earn” projects use a mix of non-fungible tokens (NFTs) and in-game currencies as rewards to incentivize users. How does this reward model work, and what are its benefits outside the on-chain economy?
Oleg: Most engage-to-earn projects operate a circular business model. People buy an NFT; why do they want that NFT? To increase their earning potential of the token. Why do they want more of the token? Simply to upgrade and maintain their NFT. There is a lack of fundamental value. Demand for these tokens is purely speculative, and people engage with the games and products to try and get rich.
I’m not sure if the rewards from other models can be used in the outside world, but our proposition is different. Users need only move more and take steps in the real world (counting it via their smart devices) to earn a token. Most move-to-earn and play-to-earn (P2E) project users engage largely in a speculative hope of getting more out than they put in. That’s not sustainable.
Our business model is hugely different; we have tried and tested B2B and B2C revenue streams, which we redirect into the token. For example, users can use their SWEAT tokens to access rewards – things people really want – like stablecoins, event tickets, NFT drops, and discount cards from blue chip brands like Amazon and Nike. This is real value for users, not a speculative hope of getting more back than they put in.
Do you think the existing blockchain tech stack is well-equipped to compete with traditional/centralized models using similar incentivization models, especially in terms of utility, scalability, and user experience?
Oleg: It is now, but it wasn’t always! We actually began this journey in 2016 and decided to start centralized simply because blockchains weren’t up to the volume and throughput we were anticipating. Now, NEAR (our chosen chain partner) can handle these mass-market demands – up to 2 million daily transactions & growing.
What crypto allows above and beyond traditional centralized models is the ability to cut out intermediaries, to allow a traceable record of who has done what, and to allow people to earn and use their reward (the token) in more ways.
Web3 is still in its early stage, and a lot of developmental work is in progress. Accordingly, the P2E and M2E concepts haven’t found much footing outside the crypto community. What do you think needs to be done differently to reach the public?
Oleg: I might politely disagree! With Sweatcoin, we have been running this model for over five years, and while it’s been centralized to date as opposed to decentralized, we have built a successful, profitable business out of it and grown a mass consumer behavior. The Sweatcoin app already has over 110 million users – in Q1 2022, users redeemed their SWEAT tokens for $70 million worth of discounts on goods and services.
We just didn’t call it M2E back then. People don’t have to be consciously aware that they are engaging in an ‘M2E’ ecosystem. So long as they are moving, enjoying the app, and having a rewarding experience.
P2E games are often criticized for focusing more on the “earn” part and less on the “fun” part. Is move-to-earn any different? If yes, please share some examples/use cases.
Oleg: You’re right. And most M2E are equally focused on the earn part. These apps are currently behind Web2 standards, and people aren’t using them for their brilliant interfaces or for their fun gameplay.
We have already made an app people love – and are creating a really enjoyable Web3 experience. For example, our NFT game has been designed to be fun. We make it clear that the earning potential is secondary. We want people to enjoy our apps, to enjoy engaging with a product that is supporting them to be a healthier version of themselves.
Most rewards and in-game currencies have no use in the outside world. To get something out of these altcoins, users need to convert them into other widely recognized cryptocurrencies. Isn’t this a significant entry barrier? What can developers do to add more utility to their in-game currencies?
Oleg: Our rewards program will give people access to on-chain and off-chain rewards. People can get stablecoins and NFT drops, or they can get concert tickets and vouchers for Amazon. That’s a leap forward in real-world utility, in bridging the gap between Web2 and Web3. That will solve many barriers to entry – and the Sweat Wallet is already the first crypto wallet for millions of people.
We have made the barriers to entry almost non-existent – all you need is a smartphone. We hope that the ease of use – the one-click log-in and real-world rewards – will make this the wallet that brings crypto mainstream.
What is Sweatcoin doing to add more utility to its native currency? How does it help with user experience and bridge the massive gap between traditional and digital economies?
Oleg: Sweatcoin will remain very much the same, a Web2, non-crypto in-app currency. The team is always working on new deals, new partnerships, and collaborations to bring our 35 million MAUs (monthly active users) rewards they love.
