Sweatcoin made headlines recently when it announced a $13 million raise in funding in a round backed by several prominent blockchain investors, including Electric Capital, Spartan Capital, Jump, GSR, and the NEAR Foundation.
The platform token, $SWT also got listed on major crypto exchanges yesterday. But what is Sweatcoin, how does it work and how can you utilise it?
Here is an explainer.
What is Sweatcoin
It might be hard to understand the concept of Sweatcoin without having knowledge of Move-to-earn (M2E). M2E is basically an innovation for people to make passive income by performing everyday physical activities.
You can read about it here.
To our topic, Sweatcoin is a fitness app on the Move-to-earn concept that lets users convert their steps into cryptocurrency. As people walk, they earn SWEAT tokens that they can swap for rewards or trade on crypto exchanges.
The company was founded in 2016 by Oleg Fomenko and Anton Derlyatka. The motive was to promote health and fitness by incentivising the process. Sweatcoin reportedly has 110 million users in more than 60 countries and over 25 billion sweatcoins have been created so far.
How Sweatcoin works
Sweatcoin is available on the App Store and Google Play Store and can be used via a smartphone or Apple Watch. After downloading the app, you are required to enter your name, phone number and email, then you need to allow the app to access your GPS location.
The app then tracks how many steps you take in a day and rewards you with sweat tokens according to your movements. Sweatcoin can help you maximize your walks. The app’s motion tracking device works best while the app is running. If you quit the app, Sweatcoin might not be able to log your steps effectively.
Notably, some Sweatcoin reviews mention that the app might not be totally accurate on treadmills or other stationary devices. The app also has anti-cheat measures, you can’t earn more steps by swinging your phone back and forth.
Sweat tokens can be traded in-app for fitness gear, workout classes, gift cards and a number of other offerings. The token is also now tradable on top crypto exchanges like Okx, BitFinex, FTX, Bybit and Kucoin.
At the moment, 1,000 steps equal one SWEAT token. However, in keeping with the app’s mission to get more people moving – and to preserve the utility, because the model “represents an ever-increasing marginal cost of production” – SWEAT will get harder to mint over time.
Subsequently, each SWEAT will need more steps to mint than the last. The company estimates that in a year 1,000 steps will equal roughly 0.33 SWEAT, in two years 0.19 SWEAT and in 10 years just 0.02 SWEAT.
That means that while there is an unlimited supply of SWEAT to ensure that people keep moving, it will get increasingly harder to create.
There are talks that Sweatcoins are hard to earn. If you make 10,000 steps per day, that is 10 Sweat tokens. At the moment 1 token market price is $0.06 (according to data from coinmarketcap).
That means you have to make 20,000 steps to make around one dollar worth of tokens. That is even far-fetched because an average person does not makeup to 10,000 steps in a day.
Note: the iPhone XS listed on the sweat marketplace costs 20,000 tokens. It will take you over 30 years to make that amount if you take 10,000 steps per day.
Also, Sweatcoin admits that its verification algorithm is flawed: it only counts for about 65% of a user’s total steps on average. Then, the free version of the app only allows users to notch up five coins each day. To earn more, you need to upgrade to a higher membership level. This will cost you Sweatcoins rather than cash.
Lastly, Sweatcoin advises keeping the app running in the background at all times so it can accurately track steps. But this will be at the device’s battery expense.
With recent developments, it is evident that SWEAT will become a massive player in the M2E market.
The app is free to download. Inasmuch as you walk and do fitness activities without any pecuniary incentive, why not utilise a platform that rewards that, no matter how small?
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