It’s STEPN [GMT]Is the failure a result of the tokenomics strategy? Here is the review

STEPN [GMT] was recently highlighted in a recent Messari tweet Thread which evaluated her performance before and after Solana [SOL] network problems. The thread shows how market changes can disrupt and potentially destabilize dapps.

According to the Messari report, Solana accounted for about 20% of the fees generated by Solana users before the crash. This was during the second quarter of 2021, during which STEPN leveraged Solana’s strong growth.

Fast forward to the present and STEPN is struggling to acquire new users, its profitability is declining significantly.

A faulty model?

Many upcoming crypto projects are capitalizing on the hype surrounding the crypto market. They often tailor their platform mechanics around user growth and use incoming revenue to pay users as part of their tokenomics strategy. However, this approach often fails to explain the other side of the coin.

The market is subject to wild fluctuations where prices can fall and interest can also fall. This is exactly what happened when the market crashed. Other challenges followed, such as Solana’s grid downtime. These events harm the growth and profitability of STEPN users.

The tokenomics model triggered hyperinflation of STEPN’s native GMT token. This effect made the ecosystem less attractive. Thus, this affected STEPN’s ability to attract new users, while also discouraging most of the existing users.

Planning to return

STEPN is another project based on an interesting and attractive model. Unfortunately, he is among many who have been let down by a poor tokenomics model. STEPN may need to follow a different symbolic and financial pursuit model for future success.

The developers of STEPN have recognized the need to do things differently and thus have outlined plans for the future of the platform. The platform aims to create value for its users by pursuing new revenue streams. A recent STEPN blog post noted that the platform,

“We’ve introduced new revenue streams to create value for our community members — launching our own decentralized exchange, DOOAR, to pump additional money into the STEPN ecosystem.”

One of the key takeaways from the STEPN journey is the value of having the right tokenomics. An important aspect for dapp developers to consider. Bad tokenomics can hinder success no matter how good their idea is.

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