Could Web3 and NFTs transform the future of fitness or is it another fad?

Is this the future of fitness?

Web3 — Hype or the real deal?

This post is focused on how NFTs (non-fungible tokens) could transform and complement the in-person fitness experience. There is a significant amount of hype around Web3 and I am still a little sceptical about the tangible benefits. Typically, we start with customer problems and work towards a solution. Nevertheless, I propose to start from the Web3 technical solutions to see if we can apply any relevant use cases to the fitness world.

Firstly, what is Web3?

According to Chris Dixon, Partner, Andreessen Horowitz: “Web3 is the internet owned by the builders and users, orchestrated with tokens”. Central to Web3 then are NFTs, blockchains but also the metaverse, the immersive 3D space which even inspired Facebook to change its name. Web3 promises much:

  • It has been trumpeted as the future of the internet and is characterized by internet services and mobile apps rebuilt on decentralized blockchain technology.
  • It often includes a broad spectrum of emerging technology like cryptocurrency, DAOs and digital assets like NFTs.
  • It puts ownership and value capture back into the hands of creators and suppliers, allowing them to create direct relationships with consumers and to eliminate centralized platforms acting as middlemen.
  • It has been hyped by sales of NFTs for millions of dollars.

In terms of consumer behaviors, we’ve seen creators being able to sell their content as non-fungible tokens (NFTs), play-to-earn games that have helped people make a livelihood playing games and a community-organized investing collective mobilizing enough capital to bid for the U.S. Constitution at a Sotheby’s auction.

What are NFTs?

A token is a record of ownership of an asset. NFTs are essentially one-of-a-kind cryptocurrency tokens; because each of them is unique. They are typically used as certificates of ownership for virtual objects like artwork or digital cards (i.e. Sorare). Fungible tokens are interchangeable (e.g., the US dollar, bitcoin etc). Enthusiasts hope tokens will one day power ecommerce in the metaverse — tipped to be the futuristic digital avatar-filled virtual world.

With art, the valuation of an NFT is highly subjective based on the artist’s personal brand, their marketability, and collectors’ sentiments about their future potential. With digital collectibles, the value is tied to scarcity and hype. I’m bullish on collectibles use cases (like NBA Topshot and Sorare) and Utility NFTs i.e. NFTs that unlock real world utility. However, the generative art ones are mainly built on speculation. The risk is that the majority of these projects will fade in the future as they will not be able to create a sustainable business. In contrast, NFT projects that focus on real-world utility and with strong communities will have much better success in this space.

Utility beyond digital assets

Utility NFTs are an emerging class of NFTs which typically include real-world perks, access, rights, and additional opportunities for the token holders. When someone buys an NFT they automatically enter an exclusive and limited cohort of token holders. This blockchain based connection creates a bridge between NFT creators and investors that can be leveraged in numerous ways. Utility NFTs have clearly outlined intrinsic value beyond their purported scarcity. I believe that the majority of value extracted from NFTs will come from those with functional utility beyond simply being a digital asset and are key to mainstream adoption of NFTs. This creates opportunities to incentivize real world actions that could translate into your profile in the metaverse.

Nike and Adidas recently have stepped into the metaverse as well. In December 2021, Adidas sold $22 million worth of NFTs from its ‘Into the Metaverse’ collection within hours of making them available. Apparel brands have always been early movers in defining the culture so it is likely that health brands will follow. Some connected fitness brands like Peloton are well positioned to execute on NFTs given the significance of their cult-like communities.

What could it mean for fitness operators and members

Fitness thrives in communities and people are craving community now more than ever. According to a study from Latent View, pre-Covid, an engaging community was one of the top reasons people went to the gym. Making up 80% of fitness club members, research shows that Millennials and Generation Z are behind the trend. To succeed in the NFT space, it’s clear community comes first and everything else follows. This is where there are some parallels between Web3 and existing fitness communities. Recent studies also show that giving people financial incentives can improve retention and get people to return to their studios and gym — “receiving a tiny monetary reward at the right moment could play an outsize role in motivating us to exercise.” Could this be where NFT tokens step in?

Below are some potential models of how we could apply NFTs to the fitness world. The question remains of how many of these scenarios could already be solved through Web2.0 technology today?

  • NFT Gym Membership: Become a member by purchasing the NFT of the gym or studio which will give you:
  • Special discounts on all add-ons/merchandise etc
  • Special events/sessions only for NFT holders
  • Holding an NFT token could unlock exclusive experiences, entry to members-only virtual and IRL events etc
  • Imagine a world where you can earn rewards for working out and using these rewards in either virtual or real world
  • NFT Aggregator Pass — obtaining a membership that allows you to access any gym on the blockchain (assuming all gyms buy into this approach)
  • Loyalty and Rewards: Gyms can create a reward system and incentivize workouts where they airdrop NFTs to their customers based on NFT level with free gifts, discounts, early access, events etc.
  • For example, members that check-in 10+ times in a month. These NFTs could be burned for apparel, credit for membership payments, insurance rebates etc
  • Special Attendances or Badges using POAP (Proof of Attendance Protocol). These NFT badges are given out to prove attendance of an event, whether it took place virtually or in the real world. Each badge is unique, meaning that the only way to get a certain POAP is to be at the event or session.
  • Member Signup flows: Signing up for a gym could be seamless just connect your wallet once + click sign. No need to put in all of your personal and credit card information.
  • Payments: Instant & feeless transactions clearly have utility
  • Transfers not cancellations NFTs are transferable so could be useful for gyms and studios with waitlists. Or if a member doesn’t want to cancel their membership it can be transferred to another member
  • Data Privacy and Security: Data is decentralised so additional privacy and security for end members — particularly now dealing with health data through wearables etc
  • Brand Building: Customized NFTs in line with gym and studio brand
  • Gamification: The connection between Web3 products and IRL experiences has become a popular method of incentivizing users. Using in-person attendances/data/metrics to progress in metaverse competitions/leaderboards. Imagine earnings spendable in the metaverse or tradable on an exchange? Or taking users’ money and putting it into a smart contract which unlocks when goals are hit?
  • Fitness Creator/Influencer monetization Same use cases as a gym or studio
  • Virtual gyms/studios in the metaverse: Will we see fitness brands follow the lead of retail space and purchase real estate in the metaverse to host their virtual fitness classes?

Existing Health and Fitness NFT projects

The first fitness brand to offer a free NFT as part of their membership is trailblazing brand KickHouse Fitness. KickHouse is a modern kickboxing concept that was established in 2020 and has already scaled to over 35 locations across the US. They recently launched an offer that new members receive a free KickHouse NFT to help build their wallet.

KickHouse CEO Jessica Yarmey says, “When you’re afraid of anything, you have a choice: you can run away, or you can face the problem full on.” With our KickHouse NFTs collection, you will learn about the calorie-burning advantages of kickboxing, and you’ll also be exposed to NFTs.” The KickHouse NFT collection is minted on Litemint in collaboration with JPEG DAO. This is certainly a differentiator with added value for members that will help attract new signups during the January busy period — at the same time increase general awareness of the Web3 world for these new joiners.

Another project that is looking to merge real life experience with an NFT project is Gymbros. Their aim is to be the first NFT project in the world to build a gym in the Gold Coast, Australia. This doubles as your membership to the GYMBROs ecosystem, which includes the GYMBROs HQ and Gym (Gold Coast, Australia — planned in 2022) and the GYMBROs Store — an Australian gymwear brand.

Apex Optimizer avatars

Apex Optimizers is the first collaborative NFT project focused on health and human performance optimization across sleep, nutrition, fitness, mental clarity etc. Unlike other NFT projects, owning an Apex Optimizer unlocks real-world benefits like product drops and discounts to top health brands, access to pro athletes and health experts, giveaways, virtual and in-person wellness experiences, and a community of health enthusiasts. This is an inclusive community of data-driven health enthusiasts and to deliver tangible, real-life utilities that help people improve their health.

It’s still early days for a lot of these Web3 projects and most are in an embryonic stage with emerging real-world use but the value will grow overtime as partnerships continue. This doesn’t mean the ideas might not be relevant but rather that these specific projects are mere examples of what some communities are currently working on, rather than practical solutions that people can readily integrate in their day-to-day lives.

The Gamified Metaverse — is “move-to-earn” gaming the next phase?

In recent times, play-to-earn gaming has helped drive NFT and crypto adoption. Participants are rewarded with cryptocurrency or NFTs for playing games. Move-to-Earn could become the next shift in the NFT gaming space.

Genopets, a Solana-based non-fungible token (NFT) “move-to-earn” game where players are rewarded for the steps they take in real life raised $8.3 million in March 2021. Genopets is looking to bridge the gap between crypto and non-crypto gamers to attract a mainstream audience. The company also foresees future partnerships between “move-to-earn” style games and wearable tech companies.

One of the more established crypto health projects Sweatcoin, which launched in 2016, rewards people for walking, with steps counted and converted into a new type of currency, sweatcoins. These can then be redeemed in exchange for exclusive rewards including gift cards, lifestyle products, gadgets, digital subscriptions etc.

Defit is a cryptocurrency coin that aims to stand out as a fast, secure, and dependable transactional alternative payment to fiat currencies for its growing online community. The DEFIT token will allow users to improve their privacy, engage in in-app gamification, and build user loyalty through staking and exclusive rewards and incentives. Is there an opportunity to have a common fitness currency across the industry?

Calo Metaverse is another fitness app that integrates blockchain, augmented reality and virtual reality technology with fitness and sports to enhance the sports practice experience, motivates people to exercise regularly and improve health. This application also helps users to generate income. By burning calories when participating in the challenge in the Calo App, users obtain a corresponding amount of tokens that can be used to buy, sell and exchange items (NFTs), thereby earning profits.

Gen Zs and Millennials spend more time playing video games than any other leisure alternative. There is huge potential here in leveraging real world health and performance data through wearables to drive these web3 use cases and ultimately get people moving more. Could “move to earn” gaming actually be a way of getting more people to the gym?

Final thoughts

According to Amara’s Law, we tend to overestimate the short-term impact of new technology and underestimate its long-term effect. With respect to the impact of Web3 on fitness, it’s still unclear whether we will see an impact in the short-term but given the recent digital transformation of fitness we may underestimate the longer term impact.

One of the biggest threats facing the fitness industry in the next 5 years is complacency. Digital technologies are having a transformative impact on business in general and will continue to do so but at a faster pace. In the future, the most successful fitness operators will be those who remain open to innovation — who embrace new technologies. Operators who are open to technologies like Web3 are more likely to thrive.

Will other fitness franchises follow in the footsteps of Kickhouse and launch their own NFT in 2022? The one thing fitness operators, influencers and brands have over any standalone NFT projects is the instant level of consumer reliability, safety, and trust to its NFT offering through brand association.

As we emerge from the pandemic, fitness consumers’ behaviours and expectations have been transformed. One of the potential biggest hurdles of bringing NFTs and Web3 to the masses is accessibility and the crude user experience currently in place to enter the crypto world.

The other consideration is the environmental impact and the cost of each transaction given the energy consumption required. These fees associated with NFT transactions are ironically called “gas fees.” There are multiple potential fixes to the climate pollution problem of NFTs in the works to varying degrees, but they haven’t fully implemented yet. As a result, this will impact the wider adoption as there will still be people who refuse to participate in a system that they think is inherently harmful to the environment.

Some people claim NFTs are the next big thing; a multi-trillion-dollar generational shift is underway. Others say they are an unregulated securities market with a lot of bad actors which is a stark reminder of what happened with ICOs in 2017. Either way the pandemic has exacerbated the obesity epidemic and whether there is real value for fitness consumers or it’s a fad, the positive impact of these projects are they are ultimately aiming to drive a collective shift towards more physical movement and a healthier future.

In part two I will explore how decentralized ownership and DAOs could disrupt the gym and studio ownership model and how the health insurance world may be transformed on the blockchain.

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Co-Founder and CPO of Glofox (glofox.com). Empowering the next generation of fitness operators to build a healthier world.

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Finn Hegarty

Finn Hegarty

Co-Founder and CPO of Glofox (glofox.com). Empowering the next generation of fitness operators to build a healthier world.

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