One of the biggest challenges in fitness is that humans are very impatient creatures, unable to motivate themselves long enough to enjoy the long-term rewards of being active. Keep fit and you’ll likely end up living a lot longer, but there’s no immediate, noticeable advantage to working out, even if doing so is obviously beneficial. Because of this, many people lack the motivation to bother trying.
Looking to change this is Sweat Economy, creator of the move-to-earn fitness app Sweatcoin, which is aiming to make society more active by making it profitable to move.
The idea that “movement” in itself has value may seem strange at first, but it’s actually quite logical when we consider the impacts it has on our health.
“Sweat Economy believes that your physical activity – namely, your steps – has tangible value, to yourself, your family, your doctor, your health insurer, your employer and ultimately even the country you live in,” said Oleg Fomenko Co-founder of Sweat Economy.
The point is that being active results in long-term health benefits, which means physical advantages for the individual concerned. It translates to improvements in your mood, your productivity at work and reduced absenteeism at work, Derlyatka said, ultimately benefiting society as a whole. In other words, the act of moving has value because it enables people to live longer and more productive lives, he said, and it’s this value that the Sweatcoin app is tapping into, rewarding its users with cryptocurrency tokens based on the number of daily steps they take.
“As we incentivize people to be more physically active, we increase human productivity, alleviate the burden on the social healthcare system and create a healthier planet,”
Derlyatka said. So it makes sense that movement has value because it brings tangible benefits. Sweat Economy’s mission is to transform that value into something that’s immediately beneficial, to motivate the world to create even more value by moving more.
The Sweatcoin app wasn’t always about crypto. When it first launched back in 2015, the sweatcoins that users earned as rewards for taking a minimum of 1,000 steps a day were originally just reward points that could be redeemed for lucky prize draws and discounts on certain products sold by its partners. However, crypto was the plan all along, it’s just that Sweatcoin’s founders came up with their idea a little too early, before the infrastructure was in place to bring the concept to life.
“We wanted to make the world more physically active by offering incentives,” Derlyatka related. “We were looking into forking Bitcoin in 2015, and in 2016 we met Vitalik Buterin to see if we should be creating the currency of movement on Ethereum, but he told us blockchains weren’t ready yet. So we opted to start centralized, get the user base and business model correct and then go from there.”
So Sweatcoin came into life as a Web2 fitness application, though it always intended to transition when the time was right. With the launch of Near blockchain’s mainnet in 2022, Sweatcoin finally decided that it was ready to make the leap into Web3, swapping its in-app reward points for a new cryptocurrency token, SWEAT.
The Largest Web3 Onboarding Event In History
For an application that had already amassed more than 120 million users, the decision to suddenly jump from Web2 to Web3 might be seen as a risky one. While crypto has its supporters, there are just as many – if not more – detractors, who worry that it’s a scam, has no value, is too difficult to understand, risky etc.
Realizing the need to placate these fears, Sweat Economy took multiple steps to ensure the onboarding process was as smooth as can possibly be. For one thing, there is no upfront investment required by users, Derlyatka explained. Both the original Sweatcoin app, and the new Sweat Wallet app, are free to download and use. Moreover, there is no KYC process or complicated user interface, as is often the case with most other digital wallet applications.
“We created a simple and seamless UX on Sweat Wallet to onboard our users from Sweatcoin,” Derlyatka said. “So the user simply logs in with their Sweatcoin account, the wallet is created for them without any barriers such as needing to know what a seed phrase is or how to store it safely.”
The other aspect of getting existing users onboard with Sweat Wallet and the idea of earning SWEAT tokens was to eliminate all of the crypto and Web3 jargon that’s more or less exclusive to cryptocurrency enthusiasts. So instead of “staking” your SWEAT tokens to earn interest, users have the option to “grow” their holdings. It’s a language that regular folks understand, and allows Sweat Economy to quite literally ‘walk’ people into the world of crypto, in more ways than one.
It’s a strategy that has borne fruit. Of Sweatcoin’s 120 million global user base, more than 13 million of them created a Sweat Wallet at the time of SWEAT’s token generation event in September 2022, making it the largest Web3 onboarding event in history.
“Not just the largest, but the largest by a factor of ten!” Derlyatka said.
Since then, Sweat Economy has gone from strength to strength, with organic growth of around 10,000 new Sweat Wallet sign-ups per day, with the app itself consistently ranking in DappRadar’s top 10 Blockchain Dapps since its launch in September.
Derlyatka said Sweat Wallet’s success shows that the world is ready for a low-barrier entry into Web3, and he anticipates even more rapid growth when the company launches a more aggressive marketing strategy that will encourage users to buy NFTs to enhance their SWEAT token rewards.
A Sustainable Economy Based On Movement
Sweat Economy’s second major challenge was to ensure that SWEAT is able to actually represent the value of movement. What’s to stop millions of people from earning SWEAT every day and flooding the world with SWEAT tokens and diluting its value? This is where its unique, sustainable “tokenomics” comes into play, along with several different forms of utility.
The first aspect is that SWEAT is designed to be anti-inflationary, with an ever decreasing rate of inflation. Derlyatka explained that, as more users sign up to the Sweat Wallet, it becomes progressively more difficult to earn each SWEAT coin. Already, just six months after its launch, SWEAT is now three-times more difficult to mint, he said.
In addition, Derlyatka explained that Sweat Economy’s treasury is committed to using a minimum of 50% of its profits, derived from its Web2 revenue streams, to buy SWEAT tokens from the open market. Those tokens are then either burned – removed from circulation – or distributed as “staking” rewards, based on what the democratic and decentralized Sweat Economy community decides to do with them. The result is that, even as more users join in and start earning SWEAT, the number of tokens in circulation will remain fairly constant.
SWEAT also has tons of utility that encourages users to put their rewards to use. Users are encouraged to deposit their earnings in what are known as “growth jars”, which allows them to receive an attractive return on those deposits. Essentially, it’s just like staking in other types of cryptocurrency, only in addition to the returns, users also stand the chance to win amazing prizes, including iPhones, fitness gear and a Tesla Model 3, for example. Alternatively, Sweatcoin users can just take their earnings and swap them for Bitcoin or some other cryptocurrency on a third-party crypto exchange, essentially cashing out their rewards.
However, users who want to be able to influence the Sweat Economy community would do better to keep a hold of their rewards. Derlyatka said Sweat Economy’s decentralization strategy envisions a much larger role for SWEAT in future, providing governance rights to users.
“Token holders will have power with regard to key decisions around Sweat Economy, starting with token burning,” Derlyatka said. So Sweatcoin’s users themselves will have a say in ensuring that the economic model remains sustainable and continues to bring value to movement.
According to Derlyatka, Sweat Economy’s ultimate ambition is to build a global economy in which millions of people can experience the value of movement.
“When someone asks one of our users, ”what makes SWEAT valuable?”, they won’t have to launch into a list of jargon, utilities and use cases,” Derlyatka said. “They will simply be able to say, it represents the value of their physical activity.”