STEPN’s GMT price crashes after China ban, showing serious red flags
- STEPN, web3 lifestyle app, witnessed a colossal crash, plummeting 74% from its all-time high after the China ban.
- Analysts have criticized STEPN’s token economy, believing it is in danger of entering a death spiral, similar to play-to-earn games.
- The move-to-earn game suddenly announced that mainland China users would be banned due to regulatory policies.
STEPN announced a ban on users in China in response to relevant regulatory policies. In response to STEPN’s rollback on its Chinese users, GMT witnessed a massive drop in its price, posting 8.5% in losses overnight.
STEPN GMT nosedived 74% from its all-time high
STEPN, the move-to-earn app, suddenly announced a ban on mainland China users, citing regulatory concerns. GMT token declined nearly 9% overnight in response to STEPN’s plan.
The app’s Twitter handle informed users that,
In order to actively respond to relevant regulatory policies, STEPN will conduct an inventory of software users. If users in mainland China are found, STEPN will stop providing GPS to their accounts at 24:00 on July 15, 2022 (UTC+8) according to the terms of use. and IP location services.
1/ 關於清查中國大陸帳戶的公告
— STEPN | Public Beta Phase IV (@Stepnofficial) May 26, 2022
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。
The platform asked users to make their own decisions about handling in-app assets and NFTs if they use their account from an IP location in mainland China. Further details would be shared with users through media announcements and email.
The move-to-earn app, in which users earn cryptocurrencies based on their movement, as tracked by their smartphones, has remained committed to providing users with a superior experience and apologized for the inconvenience caused. STEPN has refrained from engaging in any business in mainland China since the platform’s establishment. Users are reminded to beware of scams while the platform rolls back its application for users in China.
STEPN token economy may not be sustainable
Crypto experts have criticized STEPN’s token economy, considering it unsustainable. If the growth of players in STEPN’s economy plateaus, it would be in danger of a collapse, similar to play-to-earn games.
STEPN’s GMT tokens are available in a limited supply, and a burn mechanism is key to reducing the circulation of both GMT and GST tokens through in-app activities. The STEPN ecosystem runs on a dual-token economy for fundraising and utility. GMT, the naive token, has a limited supply of six billion and can be earned either through token generation events or minting.
Green Satoshi Tokens (GST), which represent digital sneakers, are the in-game utility tokens, and can be used for purchasing goods in the app. GSTs have an unlimited supply and can be minted through basic movements.
The STEPN move-to-earn app combines three elements on blockchains, web3, Game-Fi and Social-Fi. After witnessing a spike in its price, GMT suffered a decline. GMT price nosedived as STEPN announced plans to exit Mainland China, declining service to users with IP locations in the area.
Analysts believe STEPN GMT price could collapse
Crypto analysts have predicted a decline to $0.50. Crispus Nyaga, a leading analyst, argues the four-hour chart shows signs of decline. A bearish pennant pattern has featured in the GMT price chart; this is considered a precursor to a rise in selling pressure.
GMT price has dropped below the 25-day and 50-day moving averages; Nyaga believes it could drop to an all-time low, hitting the $0.50 level.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
