As of March 2024, The GST (Green Satoshi Token), Stepnās in-game currency price is so high that it might can be used to fund Universal Basic Income for parts of the world.
[Primer for Stepn: Stepn is a game/app that users can run/walk and get GST. The longer and faster you walk the more you get GST. But to be able to do that users need to equip sneakers NFT.]
This is just a fun thought experiment and I will keep it simple.
$20 a day for an hour walk!
In Stepn, users can walk or run and get GST. As of now, the daily maximum GST users can get is 300 GST which value is around $20. Thatās around $600 monthly! It is more than double of minimum wage for half of the world. (And the global poverty line is at just $2.15 daily).
But those who use Stepn would argue that you need upfront investment to do that. Letās do quick calculations here.
Initial investment for $20 a day for an hour's walk!
- Main sneakers ~ $150
- Gems ~ $600
- Sneakers for Energy ~ $600
Total ~ $1350 or roughly equal to just 2 months of walking every day!! Kind of too good to be true, to be honest.
(There are some other variables which I will discuss later)
Why it can be used for UBI.
Iām not an expert in this field but here is my line of thought. Traditionally a country can fund a UBI program through taxation in the hope that UBI as social welfare can be a security for the vulnerable, improve well-being, and reduce admin costs (for example social security). And all of these, in the long run, could lead to better productivity of a nation.
If Stepn is used as a method, people would need to walk or run for an hour per day to get UBI. And that will have direct benefits to health and well-being as UBI intended.
Letās do some feasibility calculations.
- Assume a country of 70 million people with a healthcare expenditure of around $22.5 billion. (I just reference from a middle-income country)
- Assume walking an hour per day could reduce health expenditure by around 7% or $1.6 billion a year.
- The country would need to fund the initial cost of $1350 per person. ~ $94.5 billion for the whole country.
- If health expenditure is the only benefit a country could get, a country would get all the initial investment back by 59 years.
Is this feasible for a country? Iām not sure. But to me, this sounds promising since other benefits are not included in the calculation such as less admin cost, more productivity, etc.
The most important question is: Will GST stay at this price level?
GST supply is minting when users walking and running which is capped at 300 GST per person daily. To counteract that, GST is used (and burned) for many in-game activities. The activity that we can calculate somewhat accurately is the sneaker repair cost.
- For every 300 GST mint, there will be a repair cost of ~ 35 GST (Well, that makes monthly income less than $600 but itās still high compared to minimum wages)
The rest of the activities are harder to estimate (This cheat sheet will give you GST rate for each activity.) These activities are:
- Mint new sneakers - range from 180 - 40k GST
- Enhance sneakers - range from 360 GST
- Gem upgrade - range from 50 - (at least) 800 GST
- Mystery box - range from 9 - 10k GST
- Sneakers level up cost - range from 1-100 GST
- And please don't forget the demand for speculation in this degen society š.
For unlimited supply GST to stay at this price level, the equilibrium of demand and supply should be met. Will these activities in the game burn enough GST to stay at this price level? I do not know but the Stepn team might know.
The above back of the napkin calculation is so crude it omits some complexity of the Stepn tokenomics of dual currency mechanism and many many complexities of a nation's economy itself. Anyway, I think Stepn is interesting, especially if you are already a regular runner, you could easily get compensated for what you already do. Couldnāt ask for more!
