The Collapse of the Digital Sneaker
A hugely popular crypto platform is seeing its in-game token prices collapse before our eyes. The beauty of transparent blockchain; we can watch this in real time.
I’m a pro-crypto guy. That’s obvious at this point. Want to know another reason why I like blockchain so much? Even though I’m a big privacy advocate, I love being able to data mine with market activity on an open blockchain. The best part is there are terrific websites and protocols that aggregate it all for free. Some even provide terrific visualizations.
Remember my email about STEPN last week? Funny thing about that STEPN post… my crypto editor over at Seeking Alpha liked it and wanted to publish it. Since I get paid per article over on SA, I obliged. Since you guys already had it in your inboxes, I didn’t feel too bad taking it down from the website. The perks of actually being a subscriber, amirite?
In hindsight, it probably shouldn’t have taken me actually trying out the app to realize STEPN has a problematic model. Is it a Ponzi? Honestly, I don’t know. It sure looks like one. I swear I’m going somewhere with all of this… we can see in the data that the prices of the NFTs in the STEPN app are pretty much collapsing. I knew the top was in when a boomer at a cookout was talking to me about STEPN last Friday.
This is a cool looking dot plot from Magic Eden. It’s showing the NFT sale prices of STEPN NFTs over a 30-day period. They’re clearly rolling over. But this is just one part of the story. This is just the realized sales. It doesn’t factor in the whole picture of the changing dynamics in that market. Also from Magic Eden, here’s the floor price trend:
Now to be fair, this is floor price in Solana over the entire history of the project. You can see that steady build up in floor price from last November to right around the time people started to really catch on to the app’s existence. That floor price started to top out in the 12-15 SOL range and has fallen down near 4 SOL incredibly quickly. But wait, there’s more. For our next graphic we look to Moon.ly:
Here we see the floor price and volume both collapsing while the listings ramp up. Yowza. I don’t know what the bottom is going to be for these NFTs but these NFT SOL prices aren’t even adjusted for the nasty decline in the price of Solana - a blockchain that has been having way too many stoppages to be taken seriously at this point.
Not only is the price of the NFT collection measured in SOL taking a nosedive, but SOL measured in dollars is also taking a nosedive. But wait, there’s more!
This is the action in GST, the in-game payout token from the STEPN app. That token is also down considerably from the highs. This is a nightmare for STEPN NFT holders. The reward token is down nearly 90% from its high in just about a month. As a result, the NFTs yield less from in-game activity which means those assets have also collapsed. On April 29th the average floor price was just under 15 SOL. SOL closed that day at just under $94. The floor price in the NFTs is now a little over 4 SOL. As of typing, SOL is at $40. Adjusted for Solana’s price decline, those digital sneakers are now down 89%.
I think it’s safe to say the STEPN app produced a bunch of bagholders over the last couple weeks.
Disclosure: I’m not an investment advisor. I merely share what I do and why I do it. You shouldn’t take anything I say as investment advice and always do your own research when making investment decisions. Cryptocurrencies, tokens, STONKs, and digital trinkets could all go to zero. I have no job and I live in my wife’s basement. I’m the last person on the face of the earth who you should listen to for financial advice or life advice.