Sweatcoin is designed to reward movement to inspire a healthier, and wealthier planet.
Sweatcoin, via its centralized marketplace, validates the principle of monetizing user
engagement to provide rewards for steps
“SWEAT is the natural evolution of Sweatcoin. Global, open, and fair, SWEAT is a next-generation cryptocurrency that will bring the next billion people into Web 3.0, and make movement part of global GDP.”
To validate their steps and get the most out of Sweat Wallet, a user must download both Sweatcoin and Sweat Wallet. The first 5,000 steps they walk a day will count toward minting $SWEAT in Sweat Wallet.
Oleg Fomenko, CEO and Co-Founder of Sweat Economy, shares the latest news at the TOKEN2049 Conference in Dubai, on 19 April 2024.
Crypto Breaking: Why did you choose the NEAR protocol for SWEAT?
Oleg Fomenko: The reason why we are building on NEAR is because of our scale. In our health and fitness app, Sweatcoin, we now have 164 million users and that is a lot of activity, that is a lot of transactions. And when in 2021 we realized that blockchain is starting to get fast enough, we looked at every contender out there.
So we analyzed 14 different chains, met with the founding teams, did our technical audit, etc., and we’ve chosen NEAR for three reasons.
Reason one is strategy.
Everyone was talking about 1 billion users, but their products were not actually doing what the next billion people need. And what does it mean? It means humongous throughput.
For example, EVMs have a hard stop at about 500 transactions per second. You cannot push them any further than that. So, all of a sudden, you can run into a ceiling and that’s it.
There’s nothing that can be done. So that’s not a good business decision for us. In terms of fast chains, NEAR is by far the fastest and also has sharding, which allows you to add more capacity just by deploying additional shards.
It’s fast enough now and there is a way to manage additional capacity that is predictable and has been tested. So that was one thing.
The other thing is if you want 1 billion users, you want to have a really good user experience.
And that means in a blockchain world, you need to have account abstraction by definition. Because without account abstraction, you have your key and you have your account. And if you need to do anything, then adding a key is not possible in EVM.
In NEAR, I can have an unlimited number of keys and I can have full access that manages my security. But then I can have limited access keys that prevent, for example, transactions of a certain size or cumulative transactions over a certain level.
And the next thing was the team.
Illia Polosukhin is an incredible founder. He is technical, he is a kind of research analyst and he co-authored the paper that gave us the age of AI. It’s called Attention is All You Need.
And, you know, an incredibly intelligent guy with very good energy. I just love working with builders as opposed to shoulders because there are a lot of people in crypto who talk a lot more than build. And these guys are exactly the opposite.
They build a heck of a lot more than they talk. We build long-term, so we need an amazing team, amazing product and enjoyable relationship.
And the third thing, of course, is just simple technical parameters.
Cheap transactions at scale.
CB: How much is the gas fee at the moment?
OF: Oh, it’s 0.0004 NEAR, which is a fraction of a cent. So it really is a chain that is at scale and it’s not going to break the bank, even if your balance is $5. A lot of EVM chains are talking about the next billion users, but their transaction fees would be like $4.
And you’re like, who’s going to be able to afford $4 fees if they’re earning about $5?
CB: Is there anything new in the roadmap in terms of future partnership?
OF: We announced just earlier today three amazing things.
First is, and that’s why we did it in Dubai, we’ve added Arabic language in the Sweat Wallet.
And this is by far the most demanded language by our users. At 8 a.m. today, our team rolled it out, so all of a sudden this part of the world is going to be able to operate in their native tongue as opposed to navigate in English. English is spoken in a lot of countries, but actually, if you’re starting to look at millions of users, many of them are Swahili.
The second thing is NEAR has developed this amazing tech called chain signatures.
It’s a way to work with other chains and remove all the complexity of creating an account, funding an account and bridging assets. All of that is happening automatically in software through smart contracts.
So if you want to interact, for example, with PancakeSwap on BSC, you can tap on it. We check if you have a BSC account, if you don’t, we speed up the smart contract that creates that account and stores your keys in the NPC notes and you don’t need to take note of it.
So you don’t all of a sudden go through an additional layer of security, you know, kind of taking down seed phrases, private keys, etc.
Everything is managed by your NEAR key. So we’re starting to enter the world of Open Banking, so imagine that we’re starting to do that in blockchain because, in this world, you don’t need regulators because everything is open and you just build a layer. And using one key, I can manage accounts on every chain. So for the user who just wants to get stuff done, as opposed to being busy doing stuff, this is an amazing solution, right?
And the third piece we call magic keys, it’s like a progressive security.
Right now, one of the biggest issues in UX, onboarding UX, is that you get your seed phrase and a lot of users don’t have password managers. When they see, scrape this on a metal plate, split it into two, and put it into two safes.
So we’ve gone into a really classical web 2 way, which is, that you activate your account with an email. Now we’re moving further, which is, that as long as you have control over your email account, you will always be able to recover access to your wallet by getting a reactivation email.
This was not possible before.
We had a lot of crypto-curious users who lost their keys, and unlike the Web2 world, where you can reset things, here in Web3 you can’t. So we’ve gone a step further with Magic Keys, enabling users to log back in with a one-time link sent to their email.
Yeah, these are the things that we’re announcing today
The other stuff on the roadmap that I’m mostly excited about is, if you continue this story of chain signatures to the logical conclusion, we’re becoming a multi-chain wallet that you manage with just one key, and all the fees are going to be payable in SWEAT.
The line is “to pay your fees with your feet”. So you will be able to pay fees, not out of your pocket, but out of your physical activity.
CB: At the moment, if I need to claim some token, do I need to pay it in NEAR?
OF: Unfortunately yes, but these are the last few weeks of this happening. You are not going to need NEAR, as long as you have SWEAT, you’ll be able to cover the cost of all those transactions, just with SWEAT.
We are working on removing that, as soon as we possibly can.
And I think that the other thing that I would like to talk about is the whole narrative of the movement economy.
So, we are not building product, we are not building category, we are actually building a whole new economy. And what I mean by that is humanity over the last 150 to 30 years, depending on what you consider a start, created an attention economy worth 7 trillion dollars. And all of this is built around the value of your attention.
CB: How does it work?
OF: Well, Google takes your attention, sells it to the highest bidder, and all you get is 2GBs of free storage with your Gmail. That’s not really a fair exchange of value.
So, 7 trillion dollars actually created big tech, and the wealth that they have is because they’ve taken your asset, and given you absolutely nothing in return. We want to build a movement economy around physical activity, that would work on a completely different basis. And we realized that attention, or paying attention, is very similar to being physically active.
How so? Bones are valuable to you, without paying attention, you don’t acquire new knowledge, you don’t meet new people, you can’t even buy anything, right? Without starting to pay attention.
Physical activity is making you healthier, live longer, and happier, so the benefits are there. Both of these have third parties that value it and are prepared to pay for it. Advertisers pay for attention, and healthcare providers, insurers, employers, and governments, are valuing physical activity.
And the last bit is, that both of them are scarce. You have an incredible scarcity of attention, and you have an incredible scarcity of physical activity. You can’t produce it in an infinite amount.
Around one of these, we have a 7 trillion dollar economy, around another, all we have is a universal agreement, it is valuable, but we don’t have a price, which is really weird. And that means that the price will emerge, and the only question is, how quickly can we build it?
Because it definitely is going to happen. SWEAT is designed in a way that it is tokenized physical activity, and therefore it is a means of transferring that value between all the participants of this economy. In order to kick this off, what we are doing right now, we went to the best researchers out there, who have published a lot of papers on the externalities of being physically active, and the benefits of being physically active.
No single paper was published around financial value. And we went to them and we said, look, you know about this topic a lot, what if we gave you a grant from our treasury, and you wrote a paper that answers the question, what is the financial value of 10,000 steps?
So now we have three universities working on these papers, and in about two months, we are actually going to have, for the first time ever in history, we are going to have unbiased, so it is not coming from us, a view of the financial value of 10,000 steps.
CB: Are you financing those researches?
OF: We have invited renowned universities and institutions around the world to participate in our grant programme. They are experts and researchers that have done relevant work in the past. We approved the grants based on their proposals submitted to derive an objective estimate of the economical value of 10,000 steps in a day. Theyput together a team of researchers, and they deliver the paper.
In addition, we are going to do one more thing, which is, we will ask our users for the same estimate. And a few hundred thousand people will vote, and the questionnaire, or the questions, and the structure of that, was designed by these universities.
They will take this data as one of the elements of their research.
I am incredibly excited because you know what, everyone agrees that physical activity has value, the price does not exist yet, and this will allow us to say, look, this is where it’s going to be. We don’t know if it’s going to be six months, or a year, or two years, or five.
We don’t know, but that’s where it’s going to be. And that’s the difference between the price of the token now, and where it will have to be, in order for us to be there.
The thing that is very interesting, is that a lot of people that I talk to, think that because we issue tokens in exchange for steps, you have inflationary token economics, and the price will go to zero. But we’ve been deflationary since July last year, and that is because we know how to generate revenues.
Our circulating supply has been declining ever since July last year, so it’s, even though there are constant emissions, we are able to extract from the market more than we are emitting.
CB: There is also staking, right? Which means there will be less supply available.
OF: People stake because they understand that this token represents the value of their physical activity, and they look at the price right now, and they go like, there’s no way that my physical activity is worth selling for that. And they’re putting it in a jar because they’re saying, you know what? I’m going to wait. It’s definitely going to happen. We just need to wait a little bit. So there is very limited sell pressure from our user base.
CB: I know in the app, it’s possible to earn rewards and prizes.
OF: Yeah, absolutely. We are one of the biggest apps in the world right now. If you look, we’re probably in the top three on any given day.
CB: Anything else new in the pipeline?
OF: The partnerships with universities. University of Cadiz, University of Glasgow, and University of Birmingham.
And we’re announcing the University of Birmingham today.
CB: Is the company based in the UK?
OF: The Web 2 company, Sweatcoin is based in the UK. The Web 3 business, which is Sweat and Sweat Wallet, is based in BVI, British Virgin Islands.
CB: Anything else that you wanted to talk about?
OF: Why not? Being an old fart, I remember the internet in the mid-90s.
And it strikes me that we have an incredible amount of similarities between what was happening on the internet and what is happening on Web 3.
All the focus was on infrastructure. The money was going to Sun Microsystems, Silicon Graphics, building data centers, and building fibre.
This is exactly what we’re doing in Web 3 right now. All the focus is on infrastructure projects, Layer 1s, Layer 2s, now Layer 3s, and just piping, and enablement. What happened on the internet around the year 2000 was something shifted and the measure of success became the metric which is active users.
And that gave us Google in 2003, and Facebook in 2007. So, all of a sudden everyone started focusing on large-scale stuff and they were not building hardware, but they were building propositions that would appeal to billions of people.
Consumer crypto is coming. It’s inevitable.
And we’re still in the infrastructure development phase. But all of this infrastructure will need to do something in order to produce value.
And that is going to require a lot of users and right now Web 3 is not acquiring users fast enough and it’s not terribly good at onboarding UX and all of that. So, consumer crypto is going to be the dominating narrative for quite a long time. And long-term value is going to start to accrue not on the infrastructure level but at the level where you control the final tap, the pay, send and receive.
Because that’s where liquidity is going to be. That’s where TVL (Total Value Locked) is going to be controlled by consumer crypto applications. And chains are going to be the enablement.
Because when you use an app right now, you don’t care if it’s built on AWS or Google Cloud or Azure. You don’t even know.
So, I want to make a transfer and are you using Tron or are you using Avalanche or are you using Near? All I care about is fees. Infrastructure is actually going to get pushed and squeezed and become a lot more competitive because if your transaction cost is $5 you’re not going to have a lot of business.
If your transaction costs are low then you’re going to get all the transactions. So, that’s where we’re headed. How far is it? A year, two, three? I don’t know. I think that everything accelerates.
So, I’m really, really bullish that this is going to happen very, very soon. But, this is a sort of long-term investment thesis. I guess from me that it will soon flip from infrastructure to consumer crypto.
CB: Is there any plan for people to be able to spend Sweat in a shop, let’s say to buy coffee or anything else?
OF: Yes, if you look at our roadmap we have Sweat Pay and it came out of a very interesting request from a user. He said I want to “exit” into ice cream.
So, we are looking right now at an off-RAM solution to allow our users to basically add a debit card to their crypto which would literally be side-loaded.
You know probably that all the cards right now that exist in crypto have two fundamental problems. Problem one is they require you to deposit money to spend which is actually a purchase.
Like, you know, if you need to put 2,000 dollars into an account that allows my card to work I’ve spent 2,000 dollars so that I can spend it later in smaller chunks.
Another thing is I have to convert my crypto into stables to put in that deposit which sort of defies the whole purpose of crypto because you don’t get any growth.
But we’re all familiar with debit cards. You have money in your account. If you have money in your account you can spend it.
So, our card will allow you to spend what you have in your wallet and not on NEAR only but on any chain and it is going to be literally a debit card and you will be able to exit into ice cream.
CB: So it will be a debit card connected to the wallet.
OF: That allows you to spend any token, not stables only but any token whatever token you have.
CB: When will the card be available?
OF: That is very, very difficult to say because we understand every bit of technical detail. What is complicated here are the commercials and regulatory hurdles for payment processes that we need to engage with. So, it’s unexpectedly a lot more onerous than I anticipated.
So, I cannot tell you, I don’t have a deadline but we are putting quite a lot of effort into it because wouldn’t it be magical if you install an application, you put one foot in front of another you start earning a little bit and then at the end of the week you can buy yourself a coffee with the same thing without having to swap, go through complex stuff. That would be magical. That would make you walk even more.
CB: That’s exciting news.
I’m totally pumped it’s really, really, really, really exciting and the team is amazing and the progress is really fast.
CB: Are you attending any other conference?
OF: We are definitely going to be in Token2049 in Singapore and I’m going to have a lot more announcements a lot more stuff from the roadmap is going to actually be done and launched.
