STEPN: How to use network effect to build platform in Web3

Why are we Building a Fitness App on the blockchain?

STEPN Official Medium

STEPN Official

0x711, BlockBeats

There are many fitness apps on the market. So why would we build STEPN on a blockchain? This is to ensure that:

1. Users can get rewards. That means more motivation to get fit.

2. Holding and selling in-game assets (NFT) in real life is smoother.

3. Token economics to ensure supply and demand.

4. Network effects bring millions of users to Web3.

We talked about that beforeBring the Web3 revolution to fitnessThe vision of the field, and how can we use technology to shape itThe future of fitness, this paper will introduce how to promote growth through network effects. This is an important aspect of how encryption creates network effects: people can create their social graph around their wallet address. One of the key elements of STEPN App is NFT, which represents a user's digital ownership -- owning and trading NFT is also the backbone of the application. In addition, building the App on Solana helps us achieve thisBuild a greener Web3.

Network effects have driven evolution for as long as societies have existed, helping us work together in tribes and cooperate for survival.

In the digital age, network effects remain the lifeblood of connectivity -- representing the underlying value of the largest and most successful companies. Look at social media like Facebook or e-commerce sites like Amazon, which are now the most valuable companies in the world.

What are network effects?

Network effects occur when the value of a network increases as the number of people joining it increases.

1900 年代初期电话的发明使网络效应第一次被提出并正式命名。AT&T 董事长 Theodore Vail 注意到，其公司的价值不在于电话技术，而在于公司的网络。

Vail 说，缺乏适当网络的电话「是世界上最没用的东西之一。它的价值取决于与另一部电话的连接——并随着连接数量的增加而增加。」

In other words, even if a new phone comes along with better technology or features, AT& T still retains its value. Consumers use AT& T is to connect with their friends or family, not for the clarity of the voice or the smoothness of the product -- the core need is the network, not the product.

With network effects, each additional user creates incremental value for all other users. For example, because of network effects, a telephone network of four people will be more valuable than the phone itself. At the same time, a phone network of ten people is more valuable than any one of them, because it increases the number of potential connections.

Once the number of connections reaches critical mass, competition for any potential competitors becomes extremely difficult and capital intensive. Once the number of users reaches an inflection point, it usually leads to exponential growth and a winner-take-all market.

The power of network effects

In the Web2 world, network effects build powerful empires -- big social media companies like Twitter, Instagram and Facebook. Together, these giants attract billions of monthly users and have a market value of hundreds of billions.

Their value proposition is simple -- the more friends users have on these platforms, the more fun and value they will get from them. While it's not a revolutionary concept -- most engineers can write a working social platform these days -- networking runs deep into these platforms, making it difficult for competitors to get in unless they can offer significant enhancements to entice large numbers of users to switch platforms.

In fact, NFXA study conducted in 2019 found that network effects accounted for most of the value created by tech companies since the Internet was born in 199470%. Once the network effect flywheel kicks in, it's hard for others to compete.

Network effects in Web3

在 Web3 中，在 move-to-earn 和 play-to-earn 领域的初创公司可以通过 Token 激励来实现复合增长，以覆盖建立网络的初始成本——这在 Web2 中通常需要数年或数十年的时间。通过提供加密货币等激励措施，初创公司基本上可以在几个月内Start a large-scale network.

STEPN 是一个 move-to-earn NFT 项目，它向用户支付加密货币以激励其进行户外运动。STEPN 势如破竹， 在几个月内吸引了超过 20 万月活跃用户和 9 万日活跃用户。

But once the network is established, success is not guaranteed. Play-to-earn games like Axie Infinity, for example, have amassed millions of users and driven billions of sales in just a few years. But as the game's growth began to slow, its in-game currency, the SLP Token, plunged more than 90 percent in January, leading some to predict the imminent collapse of the game's economic system.

So, recognizing the power of the web, STEPN is committed to building not just a fun, engaging, and rewarding premium game -- but a social foundation that will provide long-term success and value for all users.

因此，STEPN 不遗余力地培育了一个热衷于跑步和建立联系的社区，而不仅仅是赚钱。例如，尽管许多 Web3 项目都以不同方式关注增长——他们都持有一种「 越多人越好」的心态——但 STEPN 采取了完全相反的方法。

STEPN focuses on quality rather than quantity, such as deploying bots to remove unwanted spammers and scammers from Discord. The team also selects Discord managers and ambassadors directly from its user base and enthusiastic community members.

In addition, because STEPN's Token economics and game design are quite complex, it has invested a lot of resources in educating the community to ensure that users are aware of the project. The founding team will interact with the community on a weekly basis and answer every community question.

最后，STEPN 还计划在未来推出一个租赁系统，用户可以将运动鞋出租给其他用户。 租赁双方可以建立自己的小型经济体，这将有效地在游戏内创建数以千计的小型紧密网络。越来越多的人加入市场，将为双方增加更多价值。

conclusion

As we know, network effects are very powerful and are the foundation of the Internet. Today's need to build a high-quality network, not just focus on quantity -- which can make or break a platform in the long run.

On one point, STEPN is innovating, she will be more than just a running or fitness Web3 App. She plans to build a strong, tight-knit network to increase the value of the platform in the years ahead.

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