StepN, exit on time, or panic sale?
In my first analysis of the StepN project on May 23rd (“Can investing in StepN be profitable now?”), I considered the conditions suitable for investing in the StepN project, but something unexpected happened on May 26th, The project team announced that from July 15, Chinese locations would no longer be able to operate in the StepN app, causing significant fluctuations in Shoes and GST prices.
Also, in the next analysis of StepN’s situation, which I wrote 5 days ago, I tried to examine the Chinese influence on the StepN project, and finally evaluated their impact on the program as a transient shock. (“The Chinese storm in Stepn!”)
Now, with the huge drop in shoes and GST prices, I want to answer the question, can StepN get through this difficult situation safely?
First, we need to get acquainted with the function of coin and tokens used in StepN:
Solana coin: Solana’s inflow StepN indicates users’ willingness to invest in the project, and Solana’s outflow indicates their unwillingness to invest.
GMT token: The inflow of this token into the project indicates the desire of users to roll up their shoes.
GST token: Currently, the inflow of this token indicates a desire to roll up and mint new shoes and buy Gems, and its outflow indicates that users do not want to stay inside the app and prefer to withdraw their daily income.
Now, according to the above concepts, we can better analyze the project’s on-chain data.
The figure below shows the net inflow and outflow of Solana to StepN over the past 60 days.
As you can see, the situation was good until May 26 and was often positive, but after May 26, the outflow of capital from some users has increased and the outflow of capital to Solana means increasing the supply of shoes and reducing their prices.
In the figure below you can see the net inflow and outflow of GST
The GST token had about 6.4 million outflows and about 8.6 million inflows tokens from April 26 until yesterday. In my opinion, the reason for the drop in GST prices is the sales of traders, not users who use StepN apps.
The figure below shows the total number of new users
As you can see, their number has been declining in recent days, but we can say that part of the reason is due to the fear that has occurred in recent days.
Conclusion :
Based on the other data of on-chain and Community projects, I can say that Chinese users may have been less in number than other users, but in terms of volume of activity and especially having shoe mint farms, having a significant role in shoe production and their exit has caused sales pressure.
At present, if we consider the price of GST to be around 90 cents and the price of the cheapest shoes to be 5 SOLs, the project breakeven days will be approximately 30 days. But those who have bought shoes in the last week are now at a great loss, But it seems that the attractiveness of ROI for newcomers can incense the demand side and attract more people to the project.
As we have seen in the figure for net GST, it seems that stepN app gameplay is very successful and its users are more engaged in the activity inside it than the daily harvest of GST.
The good news is that the Chinese user exit gap can be repaired. Provided that StepN’s team can overcome the fears of new users with their plans for the future and encourage them to invest in the project.
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