Web3 lifestyle app STEPN witnessed a massive crash following the Chinese ban, falling 75% from its all-time high. Analysts have criticized STEPN’s token economy, saying its play-to-earn altcoin projects are in danger of entering a similar death spiral.
Altcoin price raised red flags with news of withdrawal from China
Kriptokoin.com Web3 coin STEPN, related regulatory policies announced that it has closed the application for users in China due to Driven by this development, the price of STEPN’s token GMT witnessed a massive drop, raising red flags, losing 8.5% overnight.
STEPN, an app that works with Proof of Move (PoM) proof, has announced that it is abruptly shutting down users in mainland China, citing regulatory concerns. STEPN has informed its users on its Twitter account as follows:
In order to actively respond to relevant regulatory policies, STEPN will take an inventory of software users. If users in mainland China are found, STEPN will stop providing GPS and IP location services to their accounts on July 15, 2022 (UTC+8) at 24:00, according to their terms of use.
1/ 關於清查中國大陸帳戶的公告
尊敬的STEPN用戶：
為積極主動響應相關監管政策，STEPN將對軟體用戶進行清查，若發現中國大陸地區用戶，則STEPN將依據使用條款對其賬戶於2022年7月15日（UTC+8）24:00 停止提供GPS及IP位置服務。— STEPN | Public Beta Phase V (@Stepnofficial) May 26, 2022
The platform also means if they are using their account from an IP location in mainland China, asked users to make their own decisions about using in-app assets and NFTs. STEPN stated that more details on this development will be shared with users via media announcements and email.
The play-to-earn application, where users earn crypto money according to their movements as they are tracked by their smartphones, stated that it will continue to provide users with a superior experience and apologized for the inconvenience it caused. STEPN has refrained from engaging in any business in mainland China since the platform’s inception. While the platform is retrieving its app for users in China, users are reminded to be wary of scams.
Analysts believe the altcoin price may drop
Crypto analysts predict a drop to $0.50. Crispus Nyaga, a prominent analyst, argues that the four-hour chart is showing bearish signs. According to the analyst, a bearish pennant pattern has appeared on the GMT price chart, which is considered to herald an increase in selling pressure. Stating that the price of
GMT fell below the 25-day and 50-day moving averages, Crispus Nyaga believes that GMT can reach an all-time low by reaching the $0.50 level. However, at the time of writing, the altcoin managed to recover a little and rise above $ 1 . Despite this, GMT is 75% off from the $4.11 ATH level.
STEPN token economy may not be sustainable
While these developments are taking place, crypto experts are criticizing STEPN’s token economy, considering it unsustainable. Experts assess that if the growth of players in STEPN’s economy reaches a plateau, play-to-earn altcoin projects will be in danger of a similar collapse.
STEPN’s GMT tokens are available in limited supply and have a burn mechanism to reduce circulation of both GMT and GST tokens through in-app events. The STEPN ecosystem works on a dual token economy for fundraising and utility. The naive token GMT has a limited supply of six billion and can be earned through token creation events or minting money.
Green Satoshi Tokens (GST), which represent digital sneakers, can be used to purchase in-game utility tokens and in-app goods. GSTs have an unlimited supply and can be minted with basic movements. The STEPN app combines three elements in Blockchains, Web3, Game-Fi and Social-Fi. After witnessing a drastic increase in its price, GMT fell sharply. Especially the announcement of STEPN’s plans to leave China has triggered the recent decline.
