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Blockchain

S.Korean firms adopt the x-to-earn model for data, community building

What began as a move-to-earn model has evolved to cash generation from driving, game-playing, and more

By Aug 19, 2022 (Gmt+09:00)

3 Min read

KakaoVX users accrue reward points playing simulated golf (Courtesy of Kakao Games)
KakaoVX users accrue reward points playing simulated golf (Courtesy of Kakao Games)


South Korean companies are embracing the x-to-earn (X2E) business model, by which users earn rewards by playing online games and accomplishing other tasks or objectives. 

While the initial reward is in gaming or metaverse tokens, it can be traded for fiat currency.

Australian fintech firm Find Satoshi Lab created the world’s first move-to-earn (M2E) app StepN last February. 

The app operates on the Solana blockchain and users accrue points based on the distance they run, tracked through GPS, and then receive rewards in crypto tokens for their progress. 

Other companies quickly followed suit, such as STEPapp and Sweatcoin.

In South Korea, Kakao Games Corp. subsidiary KakaoVX announced plans to launch shot-to-earn (S2E), which combines golf simulators and non-fungible tokens (NFTs). 

The country has “screen golf” centers nationwide where visitors can golf in front of simulators. 

Running platform startup Proground operates SuperWalk, an app that gives out a limited number of tokens daily and prompts users to compete with each other. 

A number of fintech apps began including pace counter functions in their apps, most notably Viva Republica Inc.’s Toss. 

IMPORTANCE OF DATA, COMMUNITY BUILDING 

Fictional detective Sherlock Holmes was quoted as saying, “Data! Data! Data! I can't make bricks without clay.”

More companies than ever are eager to accumulate data, leading to a growing number of apps that compensate users for data mining. 

Los Angeles-based Carypto was established with the mission to get drivers’ information and turn it into Big Data. 

Through its drive-to-earn (D2E) app, users can mine Carypto coin (CART). 

Sleep Future, which calls itself the world's first blockchain-driven sleep wellness ecosystem, is preparing a sleep-to-earn (S2E) app called Sleepy. 

Users can receive cryptocurrency by accumulating analytical data on their sleep quality. 

The better they sleep, the higher marks they get, which leads to higher compensation. 

The startup plans to expand its business to manufacturing sleep-assistance devices and offering sleep therapy. 

Blockchain healthcare startup MediBloc launched MediPass, which offers digital assets when a user achieves a certain number of steps or shares his or her medical information on the app. 

Others still are adopting X2E with the purpose of expanding and vitalizing their communities and userbase. 

User participation will become more important in Web 3.0, which will be more interactive than the digital space we are now familiar with. 

Short-form content provider CLEBe, media tech startup PUBLISH, Inc., and travel social media platform Tripbtoz offer compensation for engagement. 

Music platform FLO gives 50 won ($0.04) in fiat currency to the creator whenever someone listens to his or her creation.

Naver Corp.’s metaverse platform Zepeto is a well-known success case for compensating creators on its platform to expand its market. 

Zepeto users can design different items, such as clothing for avatars, to sell to other users to use on the platform. 

Zepeto, a metaverse platform built by Naver (Courtesy of Naver Corp.)
Zepeto, a metaverse platform built by Naver (Courtesy of Naver Corp.)


PONZI SCHEME CONCERNS

Concerns remain, however, on the X2E business model.

A bulk of X2E apps are used for marketing purposes for budding startups. 

When users swarm to an X2E app that does not have a solid revenue structure, the company may generate some publicity but may simply end up digging a hole to fill another. 

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Blockchain-based social media platform Steemit, which began its service in 2016, is a case in point.

The company let go of 70% of its staff in late 2018 despite previously being lauded as the future of media. 

Steemit users were not making money from the quality of their content but from how well they were able to accrue votes. 

“The companies should be able to show the exact structure they are using to give compensation to the users,” Hong Ki-hoon, an associate professor at Hongik University’s business management department. “If people play P2E games for the monetary compensation, it is no longer play but labor.”

Write to Da Eun Choi at max@hankyung.com
Jee Abbey Lee edited this article.
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