The world of crypto tends to reward us for sitting at our screens and hunching over our desks. However, the move-to-earn (M2E) movement rewards users for staying active. Sweatcoin is a top-selling mobile app that rewards users for their movement. The recent “token generation event” (TGE) marked a transition into Web3 by enabling holders of the legacy “Sweatcoin” to mint an equivalent amount of the new “SWEAT” token. In the coming months, the SWEAT token is expected to generate new revenue streams for users via decentralized finance (DeFi) and non-fungible token (NFT) integrations. So, if you’re wondering, “what is Sweatcoin?” – read on!
In this article, we’re going to dive deep into the Sweatcoin ecosystem. We’ll explore the basic concepts of the move-to-earn (M2E) movement. Plus, we’ll discuss Sweatcoin’s transition into the world of Web3 with the SWEAT TGE. Also, we’ll answer common questions such as “what is Sweatcoin?” and “what is move-to-earn?”.
What is Move-to-Earn (M2E)?
Before we answer the question “what is Sweatcoin?”, let’s first take a look at move-to-earn. Move-to-earn (M2E) is a new paradigm for value creation in Web3. It takes inspiration from the play-to-earn (P2E) gaming model. With P2E gaming, users can earn crypto rewards for participating in gaming tournaments and challenges; however, M2E rewards participants for being active and participating in physical challenges and sporting initiatives. Also, many M2E gaming platforms combine elements of decentralized finance (DeFi) to create financial incentives for users.
Furthermore, because public blockchains record M2E tournaments, it’s incredibly difficult for any bad actor to manipulate the scores or results. Accordingly, participants can rely on provably fair results for each type of event or game. Also, many M2E gaming platforms use non-fungible tokens (NFTs) and elements of the metaverse to create immersive experiences.
Moreover, M2E platforms allow users to earn a passive income with crypto by participating in various physical activities and putting their skills to the test against other competitors. This helps lower the barrier to entry for sporting events and allows anyone – from anywhere – to participate.
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What is Sweatcoin?
So, what is Sweatcoin? Sweatcoin is a leading activity tracker and step counting application. It rewards users for stepping outside and walking around. The first iteration of the Sweatcoin app dates back to 2015. However, the project recently integrated blockchain to supercharge the top-selling app. Sweatcoin works by tracking your GPS location and verifying your outdoor steps via your smartphone’s accelerometers.
Users earn “Sweatcoins” for every 1,000 steps they complete. Until 2022, Sweatcoins are exchangeable for goods and services via affiliated partners. Nonetheless, the introduction of the SWEAT token allows users to earn cryptocurrencies for their movement. The Sweatcoin token generation event (TGE) will enable any Sweatcoin user to match their Sweatcoin earnings with SWEAT tokens, which are tradeable on secondary markets. What’s more, users will retain their original Sweatcoins to claim rewards within the app. Following the TGE, the first 5,000 steps a user walks will enable them to mint SWEAT tokens. Any subsequent steps will entitle users to additional Sweatcoins, which will remain within the app.
Moreover, the SWEAT token generation event (TGE) will see the official conversion of Sweatcoins to SWEAT tokens. During the TGE, the non-profit organization, Sweatcoin Foundation, will facilitate the exchange of Sweatcoins within a Sweatocin wallet for SWEAT tokens at a ratio of 1:1.
The Sweatcoin project is committed to preserving user privacy. Neither the Sweatcoin team nor Sweatcoin Foundation sells user data. Instead, they allow users to decide how they want to monetize their data through the app. One of the biggest criticisms of Web2 apps is that they harvest user data. Often, users don’t know who is buying their data or what it’s used for. However, Web3 apps such as Sweatcoin put users in control of their data and allow them to decide how they want to be rewarded for it.
For example, a Sweatocoin user could provide insights about their movement data to a healthcare provider or insurance company. If users decide to enter their data into an aggregate pool for such institutions, they can earn SWEAT token rewards while retaining ownership of their data.
Sweat Economy takes inspiration from the original Sweatcoin app. However, it incorporates elements of non-fungible tokens (NFTs) and decentralized finance (DeFi) to facilitate new value creation for users. The only way to mint SWEAT tokens is via verifiable movement. As such, the more people who adopt the Sweatcoin app and become more active, the more SWEAT tokens there will be in circulation. Also, rewards for steps decrease with volume. This means each new SWEAT token you mint by moving requires more steps.
Furthermore, Sweat Economy aims to create new markets whereby anyone can earn rewards for staying active. Depending on how you use the Sweatcoin app, your interactions equate to something between passive income and active income. For example, if you use the app to count the steps you take on your way to work, you might consider this a type of passive income as you would make the journey anyway. Nonetheless, anyone who uses Sweatcoin as an incentive to go out and exercise may see Sweat Economy as an incentive to earn a (physically) active income.
Movement Validators are essential components of Sweat Economy. They ensure that all registered movements are legitimate and broadcast data throughout the Sweatcoin network on-chain. Also, Movement Validators are vital for the smooth running of the SWEAT token reward mechanism and the integrity of the ecosystem.
Furthermore, Movement Validators earn one SWEAT token for every 1,000 steps they validate. They must analyze each step and detect any fraudulent entries before broadcasting data back to the network. Currently, the only official Sweatcoin Movement Validator is SweatCo Ltd, the business entity overseeing the project. However, the project plans to include additional Movement Validators once the ecosystem is established. In turn, this will help the Sweatocin network to become more decentralized and democratize the validation process.
Moreover, Sweatcoin will open the validation process to third-party fitness tracker manufacturers and fitness apps. These companies will be able to stake SWEAT tokens to become validators and earn rewards for their efforts. Plus, these collaborations will help to generate new markets for movement data.
The Sweatcoin Token Generation Event (TGE)
The token generation event (TGE) took place on September 13th, 2022, following a month of delays from the original forecast. Over 40,000 users participated in SWEAT’s public sale, with all allocations selling out in record time. However, the TGE created an opportunity for the remaining 110 million users.
The TGE allows eligible users to mint an equal number of SWEAT tokens to their Sweatcoin balances. This enables users to convert their old Sweatcoins into the new SWEAT cryptocurrency while still holding on to their old Sweatcoins. Also, it requires no token burning and creates an effective token generation rate of one Sweatcoin for every 1,000 steps. After the TGE, users will be able to mint SWEAT tokens for their first 5,000 steps. Each step beyond this number will generate Sweatcoins.
In the future, the project may introduce a tiered minting system. The Sweatcoin Foundation and DAO will create mechanisms to incentivize activity, including fees for downtime. When the formation of the Sweatcoin DAO is formalized, members will have the opportunity to define the parameters of these fees to align with the community’s goals.
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SWEAT is built on the NEAR blockchain. The SWEAT token is also available on Ethereum in the ERC-20 standard. At the time of writing, SWEAT is trading at around $0.028, with a market cap of $80 million and a circulating supply of 2.7 billion, according to CoinGecko. A significant amount of the revenue created during the TGE and token launch events enabled Sweatcoin Foundation to create additional incentives and expand the application. This includes NFTs, DeFi, advertising, and subscription services.
The revenue generated from these features will initially make up part of a buy and burn mechanism for the SWEAT token, overseen by Sweatcoin Foundation. However, subsequent revenue will go towards the Sweatcoin DAO for protocol governance. The project will also work with third-party NFT providers, who will pay for the right to sell their NFTs using the SWEAT token. This will generate extra value and utility that can be redirected to Sweat Economy.
Furthermore, the project will integrate DeFi services such as staking and liquidity provision to generate fees for the community. Plus, Sweatcoin will provide valuable advertising space to third parties. Also, with over 100 million users, Sweatcoin is positioned to become fertile ground for advertisers. What’s more, advertising will be paid using the SWEAT token.
During the early stages of the SWEAT token launch, users can stake SWEAT tokens to earn staking rewards. There will also be a tiered staking reward system that enables participants to earn greater rewards for larger stakes. During Q4 of 2022, Sweatcoin will introduce dynamic NFTs that grant holders extra rewards and earning potential. The project will also introduce a fiat on-ramp during this period to enable users to purchase SWEAT tokens directly in the app without friction.
Furthermore, Sweatcoin will introduce a crypto exchange sometime between 2023-2024. The project will also create an NFT marketplace during this period to host the sale of third-party NFTs. This time will also see the expansion of a referral scheme and the introduction of tiered transaction fees. Plus, Sweatcoin Foundation will begin transferring governance to the Sweatcoin DAO.
The SWEAT token has an uncapped supply. However, the rate of SWEAT token rewards will gradually decrease, making it more difficult to mint them. Moreover, over time, the inflow of new users will dictate the SWEAT token supply. Estimates suggest that rewards could reduce to a round 0.33 SWEAT per 1,000 steps after one year, dropping to around 0.2 SWEAT for the same movement after ten years. This model aims to incentivize more movement over time and make it more difficult to earn SWEAT rewards.
Exploring Sweatcoin (M2E) – Summary
Sweat Economy incentivizes participants to stay active using the SWEAT token and its various reward mechanisms. Staying active has several benefits for the body and mind. However, only a small group of those who participate in physical activities have financial incentives to do so. Sweatcoin is one of the most highly anticipated move-to-earn (M2E) platforms. Also, as a top-selling app, it already has a significant fan base. As such, Sweatcoin can potentially be a major driver of crypto adoption.
Although the project is still rolling out many of its crypto features, the transition from Sweatcoins to the SWEAT token marks a major milestone in the project’s roadmap. In the coming years, we can expect to see the SWEAT token play an increasingly diverse role in incentivizing people to move around and stay active.
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