A Guide To The STEPNverse

Or, how to master the game that took web3 by storm, one STEP at a time 👟

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Oh boy. A lot has changed since I first wrote about STEPN in February 2022:

• Monthly Active Users grew to 2+ million (!) from just 60,000 users

• Daily Active Users grew to 500,000+ (!) from just 15,000 users

• GMT became a top 50 coin by market cap, flipping Axie Infinity

• GST almost 3x’d going from $2.25 to $6.00+

• NFT Sneaker floor almost 2x’d from 6.5 SOL to 12+ SOL

Most importantly, STEPN was able to deliver on its mission and to successfully onboard hundreds of thousands of people onto Web3 while incentivizing them to live a healthier and more active lifestyle.

However, as the game grew in popularity I have been drowning in private messages from people asking me about gameplay mechanics and optimal (read - profit maximizing) strategies. With that, I decided to write a quick guide on how to think about the various ways you can play STEPN. This essay will dive into both the qualitative and quantitative analysis, and I will even provide my own model for readers to play around with their own assumptions to see impact on expected returns.

In particular, this essay will cover the following:

1. What Sneaker(s) should you get? (type, rarity, quantity)

2. What strategy should you pursue? (GST, GMT, Breeding, Mystery Boxes)

3. Nuances (a few caveats / details to consider)

For those that are short on time, please see the below TL;DR recommendations:

• Sneaker type: Jogger (flexible, good value)

• Sneaker rarity: Uncommon (highest yield, quickest payback)

• Sneaker quantity: 3 or 9 (25 or 50 minutes of daily earn time, respectively)

• Game strategy: optimize for GST minting (max efficiency)

Let’s dive in!

Note #1: This article assumes you have basic familiarity with how STEPN works and will primarily focus on profit maximizing strategies. If you are relatively new to the app, I suggest reading my original deep dive first.

Note #2: The game mechanics are subject to change - the app is still in its Beta and management team is constantly monitoring metrics and making tweaks as appropriate to ensure the game’s long term sustainability.

Note #3: This is NOT financial advice - just my opinions. Do your own research. Cryptocurrencies can be very volatile and result in permanent loss of capital.

What Sneaker(s) should you get?

There are four key decisions each new STEPN player has to make:

1. Sneaker type (Walker, Jogger, Runner, Trainer)

2. Sneaker rarity (Common, Uncommon, Rare)

3. Sneaker quantity

4. Sneaker points

Let me quickly explain the tradeoffs of each so you can decide what’s right for you.

1. Sneaker type (Walker, Jogger, Runner, Trainer)

Each shoe type has a specific speed band within which the player must stay in order to earn GST rewards. Below I rank the shoes from most to least flexible.

Source: Author

Conclusion. Most people should get either a Jogger or a Trainer (if comfortable with higher upfront cost) as they are the most flexible. Walkers and Runners are cheaper but are only good for 1 use case, which may require you to get a separate Sneaker to complement.

2. Sneaker rarity (Common, Uncommon, Rare, Epic)

So should you get a Common or Uncommon or your main Sneaker? Or should you go all out and get a Rare? As always, the answer is… it depends.

As a recap, higher Rarity affects earning potential in three ways:

1. Higher base attributes at Level 0 (which is important for boost from Gems)

2. More points to distribute to attributes per each level up

3. Bonus energy units (more earn time)

From a purely ROI perspective, Uncommon sneakers generate the highest yield (and therefore quicker payback period) and generate higher earnings in absolute terms (compared to Commons). On the other hand, Rare sneakers imply the lowest yields (and longest payback period) at current prices, but can earn considerably more income per day when paired with Level 2 or Level 3 Gems (which provide a 70-220% boost to base attributes). Of course, your risk appetite / available liquidity will also be a major consideration when deciding how much capital to have at risk.

Conclusion. For most people, an Uncommon or Common Sneaker is the way to go.

3. Sneaker quantity

As a reminder, the number of NFT Sneakers you own determines the amount of “Energy” you have, which in turn determines the amount of your daily move2earn time (1 Energy = 5 minutes). Crucially, your Energy levels do not increase with every additional Sneaker you own - instead, there is a scale with specific “break points” at which your Energy will increase:

Source: STEPN Whitepaper

Therefore, unless you are buying/minting Sneakers for potential capital appreciation (i.e. selling them at a higher price in the future), for most users it makes sense to own 1, 3, or 9 Sneakers since any additional Sneakers in your portfolio will not earn any additional income until the next “break point” is met.

Similarly to the Sneaker Rarity, the primary constraint here will be a user’s liquidity and risk appetite since each Sneaker costs at a minimum ~$1,200. With that said, no matter what type of Sneaker, portfolios of 3 Sneakers or higher will always result in higher ROI and quicker payback period (despite higher upfront investment).

Finally, one more thing to consider here is your schedule. Before going with a 9 or 15 Sneaker portfolio, ask yourself if you can commit to daily walking/running of 45-60 minutes - if the answer is no, it might make sense to go with less Sneakers since you wouldn’t be maximizing your ROI.

Conclusion. Get 9 or 3 Sneakers for best results (if comfortable with upfront cost).

4. Sneaker Attributes

Last thing to cover is point allocation at each level up. The optimal allocation will depend on the game strategy of your choice (we will cover this more in the next section). But as a rule of thumb:

• For earning GST → maximize Efficiency

• For Mystery Boxes → maximize Luck

• For earning GMT (not available yet) → maximize Comfort

Please note that you will also need to balance this with some allocation to “Resilience” to reduce your Sneaker’s repair costs (especially relevant if you are exercising for 45+ minutes a day). You can play around with points allocation in this helpful calculator which can estimate your revenue, repair costs and profit.

Summary

Before we get into the more detailed math and some more nuanced strategies, let’s quickly recap the recommendations for an average user (again, these can vary based on your circumstances, DYOR):

• Primary Sneaker Type - Jogger

• Primary Sneaker Rarity - Uncommon, if too expensive get a Common

• Shoe quantity - 9 or 3

Now let’s dive into how you can actually make money playing STEPN.

What Game Strategy Should You Pursue?

What makes STEPN fun is that there are multiple ways to play the game and earn rewards. At present, the primary strategies users can pursue in the game are:

1. Mint GST token (best risk/reward)

2. Earn Mystery Boxes (higher risk, higher reward?)

3. Breed Sneakers (lowest risk, lowest reward)

4. Mint GMT (not yet available)

But which strategy is the best one?

Mint GST (Best Risk/Reward)

This strategy is the most well understood and at present offers the best risk/reward. To truly maximize your daily yield you will need to own multiple Sneakers (9 or 3 preferred), have one primary high earning Sneaker (preferably an Uncommon), and exercise daily. The primary risk players assume is the price of GST token itself, which in turn will affect the price of the Sneakers purchased (if GST drops, so will the Sneaker price). As such, upfront capital investment should be balanced with your risk appetite and expected payback period at various GST prices.

Below I provide an illustrative returns analysis for 3 and 9 Sneaker portfolios with a Level 28 Jogger as a primary Sneaker. Given that prices/game mechanics can change any time, please refer to this model see impact on ROI under different assumptions.

Source: Author, stepn.guide

A few quick observations from the above maths:

• If you are going with a Common jogger as your primary Sneaker, you are better off buying a Level 28 Sneaker (vs gradually leveling up from level 0)

• If you are going with Uncommon jogger, it is more economical to level up from zero (though it will take ~18 days to reach max level and your earnings will not be maximized until then)

• Rare Sneakers currently yield the lowest (given high upfront cost) but will earn by far the greatest daily income in absolute terms

• Upgrading Sneaker to Level 28 from Level 0 will take ~18 days, which means that your Sneaker will not be earning at its max potential until then

Earn Mystery Boxes (Higher Risk, Higher Reward?)

Users can earn Mystery Boxes containing Gems from their daily workouts which can be used to boost Sneaker attributes or sold on the in-app marketplace. The frequency and rarity of the Mystery Box depends on duration of the exercise (and therefore # of Energy spent) and on the Sneaker’s Luck attributes. While exact probabilities are not known, the STEPN community was able to crowd-source unofficial data to get a better idea of what is required to earn various Mystery Boxes:

Source: StepnStats

A few quick observations:

• To earn a Common Mystery Box you will typically need to spend at least 5 Energy (25 mins) per run and have more than 10+ Luck attribute

• To earn an Uncommon Mystery Box you will typically need to spend 10 Energy (50 mins) per run and likely have 20+ Luck attribute

• To earn a Rare Mystery Box you will likely need to spend 15 Energy (75 mins!) per run and have 30+ Luck attribute

This make Mystery Box earning a fairly advanced strategy that requires significant upfront investment (for most people this would mean 9+ Sneakers with a dedicated Sneaker with maxed out Luck). But what does this mean economically?

Firstly, not all gems are created equal. Higher Level Gems are significantly more valuable than Level 1 Gems, with Level 4 Gems priced in the tens of thousands:

Source: Author

However, earning an Level 2 or Level 3 Mystery Box DOES NOT guarantee that you’ll receive a gem of that same level (i.e. a Level 3 Mystery Box might contain multiple Level 1 or 2 Gems instead of a Level 3 gem. Luckily, the STEPN community was able to crowdsource the expected profit from each type of Mystery Box based on thousands of data points:

Source: StepnStats, Author

This means that consistently harvesting Uncommon or Rare Mystery Boxes can still be quite profitable, adding thousands of dollars in potential weekly income in addition to regular GST rewards (which would be lower for Sneakers with lower Efficiency and higher Luck). Given that each box takes about 1 week to unlock, a user can expect to earn up to 4 boxes per week, generating $600 to $2,400 on average, with attractive upside from receiving an Uncommon or Rare Gem.

Conclusion. If pursuing a Mystery Box strategy, go with at least 9 shoes and 1 Uncommon (resulting in 10 energy) with a 30+ Luck attribute.

Breed Sneakers (Lowest Risk / Lowest Reward)

To play STEPN each new user needs to own at least one Sneaker. However, given that there is a finite number of Sneakers in circulation, existing users are economically incentivized to breed (create) new Sneakers to onboard new users.

This is arguably the lowest risk (most quantifiable) and therefore lowest reward strategy in the entire game. However, it is an essential component of the game as it directly impacts new user growth, so it is worth exploring in more detail.

As a reminder, each Sneaker can be used for breeding a maximum of 7 times, with each consecutive mint requiring increasing quantities of GST and GMT:

Source: StepnStats

As long as the price of a Sneaker is greater than the cost to mint, users are incentivized to mint new Sneakers and earn a risk-free profit:

A few quick notes on the above math:

• Mint prices can change from time to time - management is constantly monitoring supply/demand dynamics and tweaking economics of shoe minting as appropriate

• At current price it is profitable to mint Common Sneakers and unprofitable (on average) to mint Uncommon Sneakers. This is because when you open an Uncommon shoebox there is a 25% chance you will get a Common Sneaker, resulting in a steep price discount of Uncommon Shoeboxes relative to the Uncommon Sneakers.

• Minting process can be time consuming. Each Sneaker must be upgraded to Level 5 first which will take a total of 30+ hours. Following each mint there is also a “cool down” period during which the Sneakers are not available for secondary mint.

Conclusion. This is a strategy that can be pursued in parallel to GST minting once your primary Sneaker is maxed out (since you cannot level up two Sneakers at once). Otherwise, for conservative players, this strategy can provide an attractive 6-7% “risk free” return on capital every few days.

Mint GMT (not yet available)

The final strategy to earn a return in STEPN is to mint GMT. This feature is not yet available in the game, but is expected to be added in H1/2022. We don’t know the exact game mechanics for this other than the Sneaker’s GMT earning potential will depend on the Comfort attribute and on the total number of users minting GMT (i.e. the more users earn GMT at a given time, the less GMT earning will be available per user and vice versa).

Given lack of any specifics on how this will work exactly, there are separate approaches to playing this strategy:

1. Do nothing - when details come out consider ‘resetting’ your primary Sneaker into a GMT earner (by maxing out Comfort attribute)

2. Level up a new Sneaker on the side without attributing any points until GMT earn mechanics are clarified (then optimize appropriately or sell Sneaker)

3. Sweep Comfort Gem floors in anticipation of price appreciation ahead of GMT earning functionality

Nuances

STEPN is an incredibly complex game with many moving parts and variables. Make no mistake - this is by design - obfuscating ROI with complexity makes the game:

1. More fun to play and explore, and

2. Harder to exploit / rent-seek

3. Provides management with more levers to control / protect the economy

With that said, there are a few nuances worth mentioning / flagging as you begin your journey within the STEPNverse.

Gems

We briefly touched on these earlier on but these are worth mentioning once more - higher level Gems (i.e. Uncommon, Rare and Epic) can substantially increase the earning power of your Uncommon or Rare Sneaker. For reference, a Level 3 Efficiency Gem applied to a Level 0 Rare Sneaker with 25 base Efficiency (middle of the range) would result in Efficiency of a 100 (!) - this is what a fully maxed Common Sneaker would have at Level 30!

Conclusion - don’t sleep on Gems, especially if you have a higher rarity Sneaker.

Multi-Purpose Sneakers

In the preceding section we talked about different strategies you can employ in the game and the different Sneakers you may need to pursue them. In reality, many users choose to have a “multi-purpose” Sneaker - one that is “pretty good” at multiple things (versus optimizing for just one). This is particularly practical to do with Uncommon and Rare Sneakers given the higher available points to distribute across each attribute (for example you can have Luck at ~30-50 points to increase chances of earning Mystery Boxes and then the rest allocated to Efficiency for GST earning).

Conclusion - consider owning a more universal Sneaker that be used for multiple strategies instead of a Sneaker optimized for just one strategy

Renting

The high upfront investment required to play the game is no doubt a limiting factor for widespread adoption - not everyone can fork out $1,200 for a virtual NFT Sneaker. To reduce onboarding friction and provide an additional revenue stream for existing users, management plans to introduce “renting” functionality, which would enable new users to “lease” Sneakers from existing users in exchange for a revenue share. While this will likely result in tremendous new user growth (due to lower barriers to playing the game), this could have unexpected consequences on the prices of GST and NFT Sneakers themselves:

• Increasing utilization rate of otherwise “idle” Sneakers should reduce demand for buying new Sneakers resulting in 1) lower price of Sneakers 2) lower minting demand → less GST burn/deflation

• Renters introduce the risk of being parasitic/extractive to the ecosystem as they convert their daily GST rewards into USDC, providing additional sell pressure

Conclusion - we don’t know yet how renting will work, but it is something that may introduce fluctuations in the price of Sneakers and GST in the future

Liquidity

One of the nice things about blockchain-enabled games is that you have full control over your digital assets which you can sell to other users on the open market. While this is certainly the case for STEPN as well (it’s in-app marketplace is fantastic), it is worth noting that liquidity varies greatly across different items sold on the platform. Unsurprisingly, the more expensive the Sneaker or Gem is, the less buyer demand there will be (less users can afford a high price tag), resulting in diminished liquidity.

Conclusion - keep in mind you might not be able to easily dispose of your higher priced items due to a smaller buyer universe (relevant for fully maxed Sneakers, ultra rare Sneakers/Gems, etc).

Conclusion

Since its launch in late December 2021, STEPN took the crypto world by storm - and rightfully so. It is one of the most innovative, daring and impactful web3 projects of the year and it has pushed the boundaries of what’s possible in the play-to-earn.

The game is being developed real-time, and if one thing is for certain is that the founders will continue to innovate, iterate and improve the gameplay as the app continues its meteoric rise.

I am excited to continue following STEPN on its journey of onboarding millions more people onto web3 and plan to keep STEPN daily to get my daily exercise in ;)

Disclaimer: The author has long positions in GST, GMT and NFT Sneakers mentioned in the essay. This is NOT financial advice. DYOR.