Sweatcoin, a popular health and fitness app, is moving from Web2 to Web3 by expanding its current “Sweat Economy” ecosystem to give users crypto rewards for participating.
Well-known blockchain investors like Electric Capital, Spartan Capital, Jump, GSR, and the NEAR Foundation have given $13 million to the jump.
Polkadot co-founder Bjorn Wagner, Polygon co-founder Sandeep Nailwal, and Civic creator Vinny Lingham are among the other well-known investors in this round.
Sweatcoin’s Web2 version gave users a Sweatcoin for every 1,000 steps they took, which they could then exchange for branded items, digital services, or donations to charity. Over 100 million people already use the app to get more out of their daily movement.
Now that the company has more money, they want to bring in even more users by improving their step-counting system and making a new cryptocurrency called SWEAT.
The SWEAT Foundation is helping to pay for the change, which will also mark the start of its own decentralized autonomous organization (DAO) that will handle governance issues.
SWEAT will be available at first as an ERC-20 (Ethereum) token and a NEP-141 (NEAR) token on the NEAR blockchain. Through a dedicated bridge, SWEAT will also be available in other EVM-compatible token formats.
The company says that customers don’t need to pay an initial fee or get an NFT in order to get started. You just need to download the app, and your steps will be counted, verified, and turned into Sweatcoins (not SWEAT tokens).
On September 12, users’ Sweatcoins will be matched with the SWEAT token. Then, these holdings can be bet on to “take advantage of a variety of Web3 offerings, promotions, and incentives from a variety of partners,” including an NFT offering.
“Users do not require an NFT to earn SWEAT for their steps, but NFTs will come with plenty of rewards and bonuses,” Sweat Economy co-founder Oleg Fomenko said. “Users will be able to purchase an NFT which corresponds to tiers of rewards.”
He said that a higher reward tier would give more benefits, like being able to mint more coins every day and getting discounts on services in the new app.
“Owning an NFT will allow users to partake in SWEAT-related games, such as head-to-head step challenges, where users place a wager on who can complete more steps in a given period of time,” said Fomenko. “Winner takes all!”
Stop moving and earning SWEAT
But the co-founder of Sweat Economy stressed that the NFTs inside the SWEAT ecosystem would change: “If you stop moving and don’t feed it with SWEAT, it will die.”
Decrypt went to SWEAT’s Litepaper to find out more about this specific feature. It says, “To encourage mobility forever, the [SWEAT] Foundation will implement an inactivity fee.” This means that the DAO will charge users a fee if their activity stays below a certain level for a long time.
The Litepaper says,“Not only does this align with our mission of promoting consistent habits, it will also contribute to the exponentially decreasing rate of inflation,”
When asked under what circumstances users would be charged an inactivity fee, Fomenko said that the exact details of the fee “will be up to the community DAO vote, so we will leave it up to them.” Some reasons for inactivity include being sick at home or taking a long flight.
He is surely said that “until the DAO is formed, we will be implementing [the fee] as it is key to our overall mission—to get the world moving more.”
Fomenko told Decrypt, “It discourages inactivity [and] encourages people to move a bit every day—the threshold won’t be very high and the penalties are negligible if people just move less for a day or two,”
The SWEAT wallet is now on the market.
Sweatcoin is also making a second non-custodial crypto wallet where all SWEAT token transactions will happen to help its Web3 push.
Fomenko said, “Because it’s a whole new product, we decided not to add the crypto offering to the software we already have.” “The Sweatcoin app will still be the movement-validator app, but the Sweat Wallet App will give Web3 a new interface. It will offer customers a variety of crypto services, such as buying popular cryptos with fiat currency, crypto-to-crypto exchange, non-fungible tokens (NFTs), gamification, and more.”
The co-founder of Sweat Economy also said that the company wants to keep Sweatcoin “working as usual” for people who “can’t access crypto in their location or prefer sweatcoins over SWEAT.”
Still, Sweatcoin says that up to 11 million people “have already chosen to build their non-custodial wallet connected to the app.”
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