Move-to-earn (M2E) applications are one of the rising trends in the web3 space as they offer people an opportunity to monetize their physical movements. Earning just by moving? Talk about free money, right?
But the question is: How do M2E apps exactly work? Do you really just have to walk and earn straight away? Or is there something else you need to do?
Plenty, to be honest. We’ll take a deep dive into M2Es’ fine print to set your expectations before jumping into one of these gamified fitness apps.
Here’s a complete move-to-earn guide that aims to show you how to earn from these apps, what limitations to expect, and clarify the myths surrounding them.
What Is Move-to-Earn? (M2E)
Move-to-Earn is a new class of gamified web3 apps that reward players with cryptocurrencies through their physical movements such as walking, running, and jogging. These decentralized applications (dApps) utilize a smartphone’s GPS, health sensor, and sometimes, even gyroscopes to accurately measure players’ motion.
M2E games offer a variety of health-focused experiences for players, from straightforward functions up to the most gamified and immersive ones, giving players, athletes, health nuts, or just about anyone who has spare time plenty of choices to staying fit (while also earning).
- Also check out: Top Move-to-Earn Apps
How Move-to-Earn Works
Users typically have two options to utilize these types of fitness apps: as free or paying players. But while they have the option to participate for free, the only way to really earn income from these games is to later become paying players.
In other words, you have to spend to be able to earn. No free lunch at M2Es, sorry.
The apps typically require players to purchase a primary non-fungible token (NFT), which usually comes in the form of virtual sneakers, before earning in the game. And even that may not be enough.
Once an NFT has been purchased, the M2E app will start logging players’ physical movements and turn them into cryptocurrencies. But their sneakers are usually designed to decrease in performance, so players would have to “replenish” them with in-game items or cryptocurrencies.
For this reason, users wouldn’t be able to advance far in the game and earn significantly higher relying on their primary NFTs and physical activities alone. Most M2E games are designed to push them into spending more on add-on NFTs or other tokens that would enhance their earning opportunities.
Moreover, players may not always have the luxury of withdrawing their earnings immediately. Some of these fitness games require a threshold of crypto balances or purchased NFTs before allowing you to cash out your hard-earned cryptocurrencies.
For players who may not have enough resources to purchase an NFT, some M2Es like Genopets offer a free version that allows them to play at zero cost. But they will have to purchase an NFT to advance, trade, and sell in the game.
DEFIT, meanwhile, allows fitness players to play straight away and earn tokens from its in-game challenges without any primary NFT. But at the end of the day, the same concept applies. You still need to purchase a digital asset at some point in order to earn significantly.
Can You Really Make Money While Getting Fit?
Yes, you can make money with move-to-earn apps, but they’re not get-rich-quick schemes, which means your earnings will likely not be significant enough to replace your job. Income earned from these apps should be seen as incentives or bonuses rather than a reason for playing.
While you may have seen or heard of countless people flaunting their impressive M2E earnings on social media, they’re not showing you the whole story. And the truth is that revenue generated from these games comes in the form of cryptocurrencies, which are known for their highly volatile nature, with values that can rise and crash in a span of weeks, sometimes even days. During a bull run, it is natural for tokens, including M2E assets, to rise in value due to hype, but they usually never last.
Considering the number of investors who have lost fortunes in the last few years amid crypto’s hype cycles, you better keep your head straight if you don’t want to end up the same. This should serve as a cautionary tale for players not to quit their jobs and make these games their primary livelihood.
Tokens earned from M2E games can motivate you to maintain a healthy body. They’re meant for leisure, not work. But if you obsess over the earnings, you’ll more likely to burn out or get your savings burned instead of your calories.
If you think of the income as a bonus for maintaining a healthy lifestyle, then you won’t be stressed over the earnings. And you’re more than likely to get your money back (plus profits) faster since you’re committed for the right reasons.
Is it a Ponzi?
Before answering this question, let’s first define what a Ponzi scheme really is.
A Ponzi scheme is a deceitful system that funds new investors with money coming from other investors to show that a business or an investment is “earning.”
This type of scheme needs to continuously bring new investors into the fold to keep the fraudulent operation going. But once participation dwindles and dries up, the entire scheme will collapse and burn investors’ money in the process.
Moreover, it usually promises “high returns with little to no risk,” compelling many people to get hooked and invest their hard-earned money.
Now, should move-to-earn apps be considered as elaborate Ponzi schemes?
Well, it depends on what aspects you’ll look at.
Let’s take StepN, Genopets, and Step, three of the most popular M2E games today, as prime examples.
By taking a closer look at their tokenomics and how they fit into their ecosystems, we can clearly see that these platforms don’t rely on Ponzi schemes. At least, it seems that way.
M2E applications have plenty of well-planned mechanisms to extract more value from their players. These revenue sources include primary NFTs, add-on NFTs, transaction fees, royalties, and governance tokens.
We’re not saying that these are exploitations as players gain clear benefits from what they’re paying for (incentivizing exercise and allowing users to enjoy a fitness game). But if a project ‘promises’ riches or something else beyond the reward tokens that they give users, that’s a different story.
Many M2Es don’t need to endlessly bring in new players into their platform just to generate revenue and sustain themselves. They usually have mechanisms in place to keep revenue flowing within their ecosystems even with their current users. STEPN, for instance, regulates the inflow of new gamers, which is counterintuitive to Ponzi schemes.
Now, let’s look at Ponzi’s second trait, which is promising high returns with little to no risk.
Any M2Es that claim to offer players significant and/or guaranteed returns with no risk (or along with these lines) should be considered a red flag. Gamers should know that no such legitimate investments or undertakings exist. Everything has a risk and it’s illegal to lie about that fact.
The only way to get high returns is to dabble with high-risk investments during a bull run, and should only be left to deep-pocketed degens. Low-risk investments, meanwhile, of course, also provide relatively lower returns.
The Move-to-Earn Business Model
Move-to-earn applications usually have five major sources of revenue: Their primary NFTs, add-on NFTs, secondary sales of digital assets, transaction fees, and sale of governance tokens. And M2E applications can only generate revenue if players would transact in each of these aspects.
While not all players may be willing to pay for all these things, M2E game policies are designed to push players into spending on them, one way or another.
‘Pay Later’ and ‘Pay Now’ M2E Games
M2E platforms have two primary ways of letting players enter their ecosystem: ‘Play-Now-and-Pay-Later’ and its counterpart, ‘Pay-First-and-Play-Right-Away.’
First, let’s take a look at ‘Pay Later’ M2E apps.
Platforms that provide free entry passes allow players to enter and play within their ecosystem without any cost. But the catch is that their gaming experience would be limited, and they’ll have to purchase specific in-game items to leverage a game’s full benefits.
These apps are ideal for gamers with limited resources who can’t simultaneously enter various web3 gaming projects and test their potential.
Moreover, a free-to-play feature is one of the best ways to promote a web3 game, as both hardcore and casual players can test it out and potentially lure other players through word of mouth. In other words, the chances of getting more paying players are high since both types of players can test the game without any restrictions.
Now, let us jump on the ‘Pay First’ M2E games.
‘Pay-First-and-Play-Right-Away’ M2E games require gamers to purchase NFTs before allowing them to play. StepN is one of the best examples for this category, but it may change soon with its potential rollout of a rental system that will allow new players to rent sneakers instead of purchasing them right away.
The ‘Pay First’ policy may sound unfair (and even illogical) at first since players are required to shell out initial investment without even letting them test a game. But web3 game developers know (and are confident) that this offering caters to the so-called degens, a sub-group (perhaps even the dominant group) of people in the crypto industry who aggressively invest in high-risk projects. These types are not afraid to throw money on high-potential web3 games just for the chance to be early adopters.
As with any successful web3 project, early adopters usually get the biggest slice of perks and benefits (mostly financial-wise). For some people, this is worth the risk.
One-time purchases of primary NFTs no matter how pricey they are may not be enough for M2Es to generate enough revenue.
What they need are multiple NFT purchases from players to maintain the sustainability of their platforms. But the problem is that not all players are willing to spend on primary digital assets repeatedly.
Their solution? Add-on NFTs.
These NFTs are usually more affordable (significantly priced lower) than primary NFTs, which are designed as a necessity to advance. Since most games’ policies require players to purchase add-on NFTs to progress or unlock new features in the game, players will be motivated to purchase these assets.
Moreover, add-on NFTs also serve as a luxury or vanity item for some players as they can use these assets to enhance the aesthetics of their game characters.
Now that M2Es have devised a way to generate revenue from players continuously, the next dilemma they need to solve is how to keep them inside their platforms.
Keeping players inside their ecosystem is critical for M2Es’ sustainability, as bored players will eventually leave in search of more engaging and profitable games. And with a long list of alternatives for fitness players, M2E games cannot afford to be complacent.
Game modes offer players a variety of gaming experiences, providing them with exciting reasons to stay longer in-game. Aside from offering Solo Mode, other M2E games challenge players to compete with friends and even against international foes!
This opportunity to compete keeps users inside the game, encouraging them to spend more on NFTs and enhance their rankings, which helps sustain the game.
Transaction fees provide additional revenue to web3 games by charging players fees for almost every transaction they do on each platform. Trading, selling, and withdrawing earnings are some of the primary activities that generate sales through fees, which usually range from 5-10 percent, and while seemingly low, the collective income of web3 games from its thousands (and even millions) of players can be potentially big.
On top of that, each player pays transaction fees multiple times in one sitting.
M2E platforms also generate income from the secondary sales of their NFTs. Royalties are the same benefits NFT artists enjoy, but on a much larger scale since the digital assets run on a fitness platform with thousands (and even millions) of active players selling and trading NFTs.
Governance tokens serve as important assets for gamers, allowing them to participate in decision-making within a gaming platform. The token’s importance provides M2E platforms with additional revenue streams, which enhances the sustainability of their ecosystem.
M2E platforms keep players in their separate bubbles because of their exclusive gaming experience and rewards. They have mechanisms in place (and continuously enhance them) to satisfy their players and encourage them to stay on their respective platforms.
In other words, they are doing everything they can to keep players’ money flowing inside their ecosystem and not let these resources “slip” on competitors’ platforms. While it remains a question if interoperable platforms or connected virtual worlds can be more profitable for M2Es, it’s clear that they’re not yet ready to run on this track.
You might also want to check our article on the top move-to-earn games.
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