Thread by @KuritoSensei

[Thread] 🔥🔥🔥Economic model in #STEPN: why is $GST -60% fall a GOOD news for every players? What is my prediction price for $GST for the next weeks? 🔮 (1/25)

@Stepnofficial $GMT #MoveToEarn #Move2Earn @crypto_bei @Lingethinvestor @NASTYAFENOMEN

2/ PART 1⃣. Anger & Disappointment.
April 29th was a fateful fay for $GST.
In just 34 hours, the price has fallen from 9.5$ ATH (All-time High) to 3.8$ (-60%) (Huobi price), a price GST has not seen for one full month of constant rise.

3/ As a reminder, sneakers floor price does not depend on Solana price, but depends on three factors:
- $GST price, as sellers breed sneakers by massively burning $GST, and will not sell at a lower price
- Supply and demand
- FOMO/hype

4/ Many newcomers who invested in STEPN just before the fall bought their sneakers at a very high price. As their ROI (return on investment) depends on $GST price ( $GMT earning is not yet available), they invested a lot, but the subsequent fall rightfully scared them.

5/ The fall was induced by the @Stepnofficial team with no prior annoucement (1-hour candle chart). That unexpected "surprise" was of course not well received by a lot of users, thereafter asking for making #STEPN a DAO (in which decisions are made by $GMT holders).

6/ PART 2⃣. Sustainability.
@Stepnofficial team have always reassured the community that #STEPN was expected to be a long-term project, not weeks,not months,but years.The economic model of the 2 tokens needs to be sustainable, with a healthy growth,constant with little volatility

7/ Here is an example of a non-sustainable token. You can make x10 within the hour, when the token is launched, but you lose everything after. This is the $SQUID rugpull token, riding the wave of the Netflix serie Squid game.

8/ Here is my own Bitcoin logarithmic curve since 2011. As you can see the growth is constant, punctuated by bullruns 4-year cycles and bear markets. But the rise is constant.
That is the kind of ideal economic model the @Stepnofficial team want to replicate for #STEPN.

9/ Here is my own logarithmic curves for $GST since the launch in December (price on Birdeye) until April 25th. Don't you think the chart mimicks BTC chart?

10/ Part 3⃣. Determination of $GST price.
Remember that formula:
Token price = Market cap / Circulating Supply

11/ Market price is the total value of $ invested into the token. Contrary to $GMT, it is hard to invest massively on $GST as the token is not available easily on exchanges (caution with the listing on FTX May 2th)

https://twitter.com/Krit_STEPN/status/1520768004480503808

12/ Circulating supply (Number of tokens) is theoretically infinite (no max supply) for $GST. Tokens are created by running/walking (minting), and destroyed by burning (level up, breeding, gems upgrades, opening boxes, etc.)

13/ The rarity makes the price rise. At EQUIVALENT market cap, the more the supply increases (minting > burning), the more price falls. And the more supply decreases (burning > minting), the more the token price rises (because the rarity makes the token cost more expensive).

14/ Here is the chart of $SLP, the equivalent of $GST for @AxieInfinity. The absence of massive burning incentives has driven down the price. The @Stepnofficial team learned a lot from Axie mistakes and made the game more $GST burning-friendly, to avoid that.

15/ As $GST minting is globally increasing in a predictable way, as daily active users (DAU) increase, the team adapts constantly the game with new burning-incentives mechanisms when the price is too low or too high (red/green line): twins event, easter eggs, activation code...

16/ And we can say they succeeded in their purpose to maintain the price between a certain range since the beginning, with a constant rise with burning events. Until April 25th, everything was OK.

17/ PART 4⃣. Issues and resolution.
But, the ransom of success and explosive rise of $GMT increased the trust of many users in the project, who massively burned their $GST to breed sneakers, instead of cashing-out or simply holding $GST.

18/ The upper red line represents my previous ⚠️"extrem limit" $GST price. The economic model beyond is absolutely not sustainable. Users earn too much money, and the model CANNOT last weeks or months because #STEPN dip into their reserve funds to pay users.

19/ From April 26th to April 29th, contrary to what most think, #STEPN team was probably not reassured at all by that $GST rise probably due to massive burning. It was impossible for them, for the long-term continuation of the game, to let things go that way.

20/ How can we stop burning $GST and thus stop the rise? Simply forbid $GST burning to breed sneakers and make it full $GMT. AND make 300% Twins event to rise $GMT price by massively burning. See the reaction right away.

21/ In the minute I get the Twitter notification from @Stepnofficial I swapped all my $GST to $GMT, because the price evolution was easily expected when you have some understandings of how price evolution works: quick increase in market cap (buy-the-rumour) and then mass burning

22/ Then, when the $GST price reached a very low level (look at the reaction on the green Log curve), the team decided to go 50% $GST / 50% $GMT.
I swear I didn't touch a thing in my Log curves, the same curves have been previously published in my account!

23/ Is the $GST price manipulated by the team? Yes, of course, in exteme prices! But you shouldn't take it personally. Very low AND very high price are dangerous for the game. FOMO car ruin the game, and I totally agree with the team not to make a DAO at such an early phase!

24/ Imo, right now the price is still very high for $GST, beyond the red line, and it would not surprise me if the @Stepnofficial team announces soon a 75% $GMT / 25% $GST ratio to breed sneakers. Some adjustments will happen again, as the game is still in beta, don't forget it!

25/ PART 5⃣. $GST price prediction.
$GST optimal price should be between 4$ and 5$ imo, to earn enough AND keep an affordable floor price. Price prediction for $GMT will come in another thread, but I already answered in a previous one!

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