Stepn plans to spend more than $6 million Q2 profits to purchase back and burn GMT tokens.
Stepn is a HTML3 fitness app that claims to be a “move–to-earn” experience. Today, the startup revealed that it will use part of its Q2 profits for token purchases and burning.
The company reported that it made $122.5 million from platform fees in the second quarter. It plans to spend 5% ($6.125 million) on Stepn’s GMT governance tokens and burn them.
The current price for a token is $0.87. This would mean that just over 7,000,000 GMT tokens will be permanently removed from a maximum supply of 6 billion. 600 million have already been issued. Crypto firms–including exchanges like Binance and PancakeSwap–sometimes initiate such buybacks to reduce supply and drive up token values.
“The buyback-and-burn accrue value back GMT–our unifying thread throughout all the initiatives we undertake at Stepn,” Shiti Manghani, Chief Marketing Officer, told decrypt today. “Be it the sustainability of the game economy, launch of our [decentralized] exchange, DOOAR or new launches on horizon.”
Stepn isn’t the only company that has used its profits to buy back tokens and burn them. The firm announced in April that it would spend $26 million to accomplish this. Its official website shows that it has burned more GMT tokens than any other company. Stepn plans to buyback and burn additional tokens every quarter.
Stepn is a mobile application that rewards users for walking and running in the real world with cryptocurrency. It’s an experience Manghani described recently on Decrypt’s gm podcast, as “Strava meets Pokemon Go.”
NFT digital sneakers must be purchased using cryptocurrency. Users can then earn token rewards by moving and getting out. Manghani stated in June that the game had more than 3,000,000 active users since its launch less than six months ago.
The app was in high demand due to the rise in prices for GMT and GST reward tokens. However, prices have dropped amid a larger crypto market crash. Stepn currently relies on the Solana Blockchain, but the company also offers digital sneakers on BNB Chain (formerly BinanceSmart Chain).
Stepn also announced last week that it will expand into Ethereum’s ecosystem in near future. This will allow holders Bored Ape Yacht Club NFTs – valuable collectibles worth more than $100,000 each – to get a free pair NFT sneakers on Ethereum.
An NFT token is a crypto-token that represents ownership of an item. Although Ethereum is currently the largest NFT network, there are some drawbacks to the blockchain network. It has slower transactions and higher costs than Solana or BNB Chain, and also has a greater environmental impact.
Stepn acknowledged that some of these concerns were raised in a blog post last week. However, he suggested that Ethereum offers a great opportunity to bring more people onboard. Stepn highlighted the history of innovation and decentralization in the blockchain platform over the years as well as the large number of decentralized applications (dapps) it has.
Manghani stated that “it is in line with the mission to onboard 100 million users,” Decrypt. “This can be achieved by welcoming new communities. The Ethereum community is one of the most prominent.