The Sweat Economy – Oleg Fomenko, Co-founder
The best fitness apps are the ones that you use the most. But what if you could get rewarded for walking?
Sweatcoin is now one of the most popular health and fitness apps in the world. It managed to become that by gamifying physical exercise and rewarding users. Last year, the team behind Sweatcoin launched the Sweat Wallet app and SWEAT token, creating the Open Economy of Movement with the transition to crypto and web3.
We had the pleasure of getting to know more about Sweat Wallet, a NEAR-based crypto app and community, in our interview with Oleg Fomenko, one of its three co-founders. He shared learnings from its development history and gave us a glimpse into where it might be heading next.
Hi Oleg – you have previously worked in other industries and developed successful start-ups. How did the idea to build Sweatcoin come up?
OF: I’d always prided myself on my fitness, but like many others, found less and less time for it as I grew older and my career took off. When it got to the stage where I could hardly do a simple jog without breaking into a sweat, I knew I had to get in shape.
Around that time, I was watching WALL-E with my son – and in the imaginary future, there were ‘blobby’ people so out of shape that they were being wheeled around by forklifts. With horror, I could foresee this dystopia becoming a reality with the way that technology trends and modern society are conspiring to make us more sedentary.
Over recent decades, obesity has become a bigger global health challenge than malnutrition. It’s one of the leading causes of premature death - costing taxpayers, insurance holders, and health providers many billions of dollars. I wanted to use technology to address that. That’s when I, along with Egor and Anton, my co-founders, came up with the basic idea of rewarding people for taking steps.
From Sweatcoin to Sweat Wallet
With the most global downloads in 2022, Sweacoin is now one of the most popular health and fitness apps in the world. What motivated the transition to crypto and web3 with the Sweat Wallet app and $SWEAT token?
We always wanted to put it on-chain, but back in 2015, there were no blockchains fast enough.
The reason for wanting it on-chain was simple. People should own the economic fruits of their physical activity, with all the upside entailed, such as owning their movement data. $SWEAT facilitates that, and we are moving towards creating a DAO that will offer the community a voice in the decision-making process of the network and give them opportunities to monetize their data, for example.
Crypto also really enables what we are terming the “Open Economy of Movement,” where movement is attributed a real economic value which anyone can get benefit from. Decentralized networks, run by the token holders, seem to us the most effective way of doing this. We envision health insurers, employers, governments, and brands all being able to permissionlessly loop-in to the economy.
Why did you decide to build on NEAR?
Once we’d had the idea – and had grasped the potential of Web3 and decentralization to create a true unit of value for movement – it was a matter of waiting to see which blockchains could fulfill the mass-consumer transaction volume we anticipated.
There weren’t really any that could deliver this at an affordable cost back in 2015 when we started the business. When we began, there was only really Ethereum operating at scale but without the efficiencies we required. We actually met with Vitalik around 2016 and he advised that we should wait, build the product, then move over.
Over the last few years, we researched the capacities and infrastructure of many blockchains. NEAR was the one we were most impressed by, technologically speaking. But there was an additional dimension – an alignment of values and mission. We loved their ethos of building, and their vision to build scalable DApps that bring value to consumers.
What are some learnings from Sweatcoin’s shift from web2 to web3 that could help other builders?
Web3 was always our ultimate destination. Without the scalability of blockchain in the early days, we resorted to building consumer behavior through a loyalty point model. This has proven hugely successful as we effectively educated millions of our users on “move to earn” before “move to earn” was even a thing! Our strapline with Sweatcoin was that “it pays to walk”.
Converting our millions of users to Web3 was therefore relatively easy, as the behavior is the same: walking for SWEAT in exactly the same way that they were already walking for Sweatcoins. This is how we achieved the largest ever on-ramp (as far as we can ascertain) in Web3. 14M non-custodial wallets were created in under three months from announcement to the token generation event.
What were the considerations that lead to the token economics model that you have now?
A key consideration was the rapidly increasing minting difficulty curve. We wanted people to be able to earn $SWEAT for their movement in perpetuity, so supply is technically uncapped but the hour-by-hour increasing minting difficulty means that people have an incentive to get moving today, not tomorrow. It also preserves token utility by guarding against inflation, as the increasing rate is rapid.
Token utility has been our key focus – giving people something to do with their $SWEAT. We have already introduced staking, with 370M $SWEAT currently staked. We have given away over 30,000 Rewards in our Sweat Wallet to stakers, while we’ve just released the closed Beta of our NFT game Sweat Hero, which the community is loving.
Beyond that, we are integrating Learn and Earn, sponsored by featured projects, and a suite of functionalities that really make Sweat Wallet a fully-fledged crypto wallet – crypto swap, manage, transfer, and on-ramp features.
A glance into the future
How can consumer dApps like Sweat Wallet contribute to the mass adoption of cryptocurrency?
By creating products that are incredibly low-risk to engage with (no cash at risk for everyday users) and that offer fundamental value to the user. If a product aligns with doing some good for people and improves people’s day-to-day experience, the rest is inevitable.
Ponzi-nomics are short-term, and hopefully, one upside of this bear market will be the demand for products that actually give users back more than they put in. Otherwise, why would they use it? Speculation is short-lived. Value is what will help to drive adoption.
What’s next on the Sweat Economy roadmap?
Good question! We’re racing through our – we’ve already delivered Sweat Hero Beta, a Portfolio feature to manage NEAR-based tokens, along with buying NEAR with fiat in the app. Next up will be Learn and Earn, followed by crypto-crypto swap functionality.