STEPN, the popular move-to-earn app, is making a big bet on Argentina. Their partnership with the AFA to release NFT sneakers underscores Coupang’s future-forward ambitions. This move is particularly notable given that Nike recently withdrew from the NFT sneaker market because it was not profitable. Indeed you might wonder what’s different this time around that could make its implementation unlike previous iterations successful. Can STEPN really make this work? The key, I believe, lies in a seemingly simple but often overlooked aspect: NFT royalties.
Why Royalties Matter More Than Hype
Let's be clear: NFT hype is fleeting. We’re all too familiar with the projects that go out with a bang and then disappear from the world’s radar. Royalties, in contrast, are a key pillar of a healthy and vibrant NFT marketplace. Think of it like this: every time an AFA NFT sneaker changes hands on the secondary market, a percentage of that sale goes back to STEPN, AFA, and potentially even the original artist. This creates a predictable stream of income. It pushes them to ever-improving innovation, increases public participation, and most importantly, it pays the people who create these digital letters of introduction. Without that, you're just building on sand.
Royalties aren't just about the money. They're about value. They really coordinate the incentives of all the stakeholders – the creators, the platform operator and even the users. It makes sure that the people who will be responsible for making sure the project is a long term success get compensated for doing so. This is in stark contrast to the pump-and-dump schemes that have overrun the NFT market.
STEPN's Past, Future's Lessons
According to STEPN’s last partnership with Adidas which generated $5 million in the first minute. At 10,000 GMT each sold, it became a significant purchase commitment for participants. What happened after the initial sale? How were royalties handled? What lessons from that data should we take to create a better AFA partnership? Having access to trading volume, price appreciation/redeem, and royalty distributions (if applicable) is key in analyzing those Adidas NFTs. We need transparency here. Show us the numbers.
Think of it like this: if the Adidas collab was a sprint, the AFA partnership needs to be a marathon. Royalties provide the endurance fuel that keeps the project going when the novelty factor beyond the initial kick-off wears off. Without them, STEPN is running on empty. That's a recipe for disaster. The anxiety causing concerns about the long-term viability of M2E models is justified. Royalties go a long way to addressing that fear by showing you’re in it for the long haul and value creation.
South Asian Opportunity, Chess Strategy
Here’s where it gets really interesting, where the “unexpected connection” comes into play. Consider the South Asian market. An area rich with creativity and innovation, sometimes excluded from the international NFT dialogue. NFT royalties provide an opportunity to uplift these artists and creators, making the new digital economy more equitable and accessible to underrepresented regions. This young designer living in Mumbai creates a completely original digital skin for one of the AFA NFT sneakers. Every time someone trades that favorite skin, the designer makes money! That’s how you create a truly global and truly inclusive ecosystem.
Now, let's think strategically. Remember chess? Royalties are your pawns, ready to be promoted to queens. Each transaction, each secondary sale, is a recourse move on the board. A thoughtfully designed royalty system should stack the board’s center space. Most importantly, income is both consistent and reliable which means viability over the long term. It’s not about getting rich quick. It’s about creating a long-term empire.
The clock is ticking. Both STEPN and the AFA have to take a clear stance here.
| Feature | Importance | Relevance to STEPN/AFA |
|---|---|---|
| Royalty Rate | Directly impacts creator earnings and project revenue. | A transparent and fair royalty rate is crucial for attracting users and incentivizing continued engagement with the AFA NFT sneakers. |
| Distribution | Determines how royalties are split between creators, the platform, and other stakeholders. | Clear distribution guidelines are essential for building trust and ensuring that everyone benefits from the success of the project. Consider allocating a portion of royalties to AFA's youth development programs. |
| Enforcement | Ensures that royalties are properly collected and distributed. | Robust enforcement mechanisms are necessary to prevent royalty evasion and protect the rights of creators and stakeholders. |
| Transparency | Allows users to track royalty payments and verify that they are being distributed fairly. | Openly sharing information about royalty distribution builds trust and accountability, fostering a stronger community around the AFA NFT sneakers. |
My call to action? Demand transparency. Require STEPN and the AFA to explain how their royalty system works in practice before you invest. How will royalties be distributed? What percent is going to be paid to the creators, the platform, and the non-profit AFA? How are these royalties going to be utilized in order to ensure the longterm sustainability of this new and innovative project?
Don't let the hype blind you. Ask the tough questions. It’s the future of NFT sneakers, and maybe even STEPN, for that matter.
Don't let the hype blind you. Ask the tough questions. The future of NFT sneakers, and perhaps even STEPN itself, depends on it.
