The future of fitness might be a Ponzi scheme

By June 15, 2022The Sandbox
Click here to view original web page at www.morningbrew.com
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Illustration: Francis Scialabba, Photo: Martin Novak/Getty Images

For 7,400 Binance stablecoins, an aspiring metaverse athlete can buy a pair of Asics sneakers. That’s about $7,400 in fiat, making the multicolor low-tops some extremely expensive shoes, even for the most dedicated sneakerhead. The Asics are NFTs that grant access to an invitation-only digital exercise space, StepN. Cofounder Yawn Rong recommends that users get started with three pairs. (Yes, that’s more than $20,000 worth of NFT sneakers.) Thousands of dollars on digital shoes might sound excessive, but it’s a steal compared to the NFT Nikes someone bought in April 2021 for $134,000. But unlike the Takashi Murakami-designed Nikes, the Asics promise the buyer a chance to earn back the money—by exercising.

StepN is one of the many fitness-focused metaverse companies that are broadly called move-to-earn. It’s a simple concept: Users exercise IRL and generate in-game currency that can be used to edit their in-game avatars, upgrade their in-game equipment, and in some cases, convert that currency into cash. The value of the in-game currency fluctuates, meaning a grueling run today might be worth the same amount as a sluggish walk to the mailbox tomorrow. To a mix of applause and groans, move-to-earn is here. Some critics, and even some fans, are calling it a Ponzi scheme. Those who are building move-to-earn universes say it’s the future of fitness. Either way, it’s a logical next step for the metaverse, where the name of the game seems to be financializing everything, including your morning walk.

Move-to-earn, the underlying concept of the fitness metaverse, has connections to both the wider metaverse and the regular meatspace. Nintendo’s Wii Fit, launched in the United States in 2008, encouraged users to gamercise, though it didn’t offer any monetary reward. (In fact, the games could cost the user their TV screen if they lost grip on the remote.) And in 2012, an app called GymPact allowed users to earn monetary rewards for meeting their weekly gym visit goals, paid for by users who missed theirs. But none of these efforts could quite match the intensity of a traditional gym, plus they didn’t come with the potential to get absolutely shredded while earning cash.

Only 23% of Americans meet the CDC’s guidelines for leisure-time physical activity, according to a 2018 survey, so there’s a market to financialize the simple act of moving around. Metaverse companies are hoping to capitalize on that market, not just through earning tokens but through rethinking the relationship between gaming and exercise. OliveX, a Hong Kong-based company that’s focused on different types of gamified fitness, introduced a jogging app called Dustland Runner where users follow an audio storyline about a dystopian world infested with pirates. Runners complete missions by, well, running, and earn DOSE tokens (short for “dopamine, oxytocin, serotonin, endorphins”) for their efforts. There’s also an app called 22 Pushups, an extremely utilitarian push-up counter that tracks reps via your phone’s camera. Users generate DOSE tokens in several OliveX games, except for those in the US, where OliveX does not issue the tokens where regulations prohibit it. Instead, users earn “completion tickets,” which the company hopes can be converted to DOSE tokens later on. OliveX also invested in Genopets, a move-to-earn game in which users care for a “digital spirit animal” by moving around and completing cognitively stimulating puzzles for GENE tokens, said Marisa Lam, head of marketing and communications at OliveX.

"Everyone is talking about move-to-earn,” Lam said. “But we would like to give that a twist: It's move and earn. [For us,] it has always been about making exercise fun, long before blockchain."

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Image via OliveX Youtube channel

Aside from its external investments and standalone games, OliveX is focused on building out the “Fitness Metaverse,” specifically in the Sandbox, one of the largest metaverse platforms. One of the company’s first partnerships is a collaboration with Gym Aesthetics, a German athletic apparel brand. Users who purchase a Gym Aesthetics NFT will be granted access to an exclusive section of the Sandbox, where they can earn DOSE tokens with their activity, and exchange their expended calories for different digital items. It’s also partnered with the Bored Ape Yacht Club to offer Operation Ape, a special mission in the Dustland Runner game with apes (obviously). An NFT access pass is required to play—prices start at .07 eth ($93 at the time of writing)—and through this game, users can turn their DOSE tokens into ApeCoins.

In StepN, rewards come in the form of Green Satoshi Tokens and Green Metaverse Tokens. According to StepN cofounder Rong, users are making anywhere between the equivalent of $200 and $4,000 a day just by turning on the app and moving around. (Morning Brew could not confirm those numbers.)

Move-to-earn is probably familiar to crypto enthusiasts and gamers. Axie Infinity, a play-to-earn game that rewarded users for making a Pikachu-esque (unrelated to the actual Pokémon franchise) character mine and battle for materials that can be converted into tokens, turned gamers into workers who played Axie full-time. Last March, Axie was hacked to the tune of more than $600 million, and its two associated cryptocurrencies plummeted in value. In 2021, Rong was having a beer with his future cofounder, Jerry Huang, and they thought they could come up with a better system than Axie’s play-to-earn model. Subsequently, they launched StepN. Like Axie, StepN’s appeal is international, but where Axie failed, Rong believes StepN can succeed. Axie’s failures came from a lack of urgency in dealing with hacks, inconsistent product updates, inflation of its in-game currency, and singular focus on one game, Rong said.

In Axie Infinity, users must buy three NFTs before they can begin playing, the same number Rong recommends for starting on StepN. Rong prefers calling move-to-earn “not move to lose.” Because, he said, “you will never make the money back if you don't exercise.”

If it sounds too good to be true, then it might be. Even Rong described the mechanics of the fitness metaverse as "Ponzinomics.” If a crypto product’s maturity is ranked by its highest-profile celebrity shills, then it’s definitely still early days for the fitness metaverse. As Bahamas-based crypto exchange FTX counts Tom Brady as a celebrity endorser, his teammate, Rob Gronkowski, is pushing the Fitcoin app in the fitness metaverse, which he said is “going to disrupt the move-to-earn category in a big, big, big way."

Even though it’s called move-to-earn, don’t expect a giant payday for a Sunday 5k, since hard-earned walking-around money could just disappear. On May 26, StepN users in mainland China found out they’d soon lose access to the platform, as the company announced it would cut off GPS to its users in China—a move to apparently preempt a crackdown from the country that has deemed all cryptocurrency transactions illegal. Following this announcement, StepN tokens quickly dropped in price. Ponzinomics, indeed.

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