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10 Traits Every Great Metaverse Token Needs

Step App Team
November 17, 2022

10 Traits Every Great Metaverse Token Needs

The Metaverse is a rapidly expanding virtual world of unlimited possibilities. As many projects prophesize, this new medium enables us to work, exercise, play games, attend events, trade, and showcase art virtually. However, these activities are impossible without a form of currency facilitating the exchange of value and experiences between participants. This is where the Metaverse token steps in to fill in the gap between possibility and reality.

Two such tokens, FITFI and KCAL, come from Step App, a FitFi-based project in the Metaverse allowing users to complete quests and PVP challenges. FITFI is a governance token, and KCAL fuels the in-game economy, enabling holders to utilize, earn, and stake. These two tokens are great examples of Metaverse tokens that have the necessary traits to create a sustainable Metaverse economy.

This article covers the main traits that differentiate a great Metaverse token from a common, most likely uninteresting one. We'll cover the features of projects building better Metaverse economy models. Sooner or later, we'll all enter the Metaverse. So, it’s important to know what makes a Metaverse ecosystem more sustainable.

What Makes A Metaverse Token Great?

The Metaverse exploded in popularity recently, reminding everyone of the first days of cryptocurrencies, or the DeFi craze of 2020. However, this time, more people are likely to join a crypto related technological breakthrough because it is more accessible, and the masses are opening up to it.  

Cryptocurrencies have been around for more than ten years. Still, many people struggle to grasp their use and purpose. The same goes for decentralized finance applications, where lucrative, but highly complex investment opportunities keep many people at bay.

On the other hand, the Metaverse is something everyone can understand, or at least relate to without having advanced tech or financial knowledge. In fact, you only need to know about one type of token, the Metaverse token, which opens the doors to all the benefits and opportunities in this virtual world.

The Metaverse token is a medium of exchange as powerful as the number of important traits it possesses. Similar to reliable commodities, such as gold or silver, an exceptional Metaverse token commands authority, enjoys widespread popularity and support, and can retain its value even during an economic crisis.

This article will cover just 10 characteristics of a potentially successful Metaverse token. However, new Metaverse tokens are surfacing on the market every day. You will need to know more than just the basic attributes of a Metaverse token to identify its value, for example: it’s a good idea to make sure the Metaverse token is coming from a Metaverse project that is actually going to be developed. 

Discover the essential features of a Metaverse token in this article to help you better assess these digital assets. Keep in mind this list of traits associated with Metaverse tokens is not provided in any particular order.

  1. A Metaverse Token Needs Large Scale Distribution

A great Metaverse token benefits from widespread distribution. In other words, it has a robust underlying economic model ensuring its dispersion across the market. The more people know about it, the more trust and credibility it gains. This trait is important not only for the token, but also for building the long-term sustainability of the Metaverse.

A Metaverse project can achieve broad distribution through various strategies. One of them is hosting an Initial Decentralized Offering (IDO), a time-limited token sale that helps build brand awareness. Generally, developers use this method to attract funds for the project. However, it has been just as effective at growing a loyal community of token holders since the early stages.

Alternatively, a project can rely on airdrops, activity rewards, private sales, and Simple Agreements for Future Tokens (SAFTs). The latter is the security the developers issue for the eventual transfer of tokens to crypto communities.

These token distribution strategies ensure the project’s Metaverse token has a powerful impact in the Metaverse from the get-go. Furthermore, they help reduce the risk of a few users or groups of users obtaining control and manipulating power over a substantial amount of the Metaverse token supply.

Step App is a community-centered project and has designed its initial token distribution to be fair to all its members. To this end, it has eliminated disproportional token allocations towards VCs, and made a sizeable portion of its Metaverse tokens available to the community. 

  1. Metaverse Tokens Need an Easily Recognizable Brand

When the Metaverse concept reached mainstream news last year, a myriad of Metaverse tokens flooded the market. More are surfacing in the cryptosphere as we speak. However, you might find it tricky to name only a handful of them in a quick-fire quiz.

A successful Metaverse token rises above the sea of anonymity in which hundreds of projects drown daily. It has a solid and reliable brand that even newcomers in the crypto space recognize on the spot. This aspect, among others, makes it appealing to communities and users everywhere.

Reaching this high level of popularity is not easy, though. The Metaverse token requires an expert team with high marketing skills to build awareness and credibility. Their winning strategy involves listings on major crypto exchanges, airdrops, and even collaborations with other big brands.

In this regard, Step App delivers one of the most recognizable token brands in the cryptosphere. The project launched on DAO Maker, the industry-leading launchpad for nascent and growing crypto startups.

Furthermore, the platform teamed up with eight-time Olympic gold medalist and 11-time World Champion Usain Bolt. This prestigious partnership has brought Step App in front of a global audience of crypto enthusiasts, Metaverse users, sports fans, and fitness lovers. 

Step App has also partnered with Global Titans, one of the leading boxing and MMA brands that works with the likes of boxing Legend Floyd Mayweather. This partnership is in line with the quest of the team  to bring Fitfi to the boxing community. 

This is only one of the many illustrious brands and personalities that Step App will collaborate with as more are soon to follow.

  1. A Metaverse Token Must Have Multiple Use Cases

In the early days of the crypto industries, most cryptocurrencies had one purpose. For instance, Bitcoin provides a decentralized method of sending and receiving money online. It represents an alternative to traditional fiat currencies while maintaining similar use cases.

Nowadays, most digital assets come with several purposes and utilities. A new token could be used for staking, trading, or accessing a specific service. For instance, an app or a blockchain-based game allows only certain token holders to use them.

Metaverse tokens must continue this trend, and double down it. A great Metaverse token will meet different use cases. A few features of a great Metaverse token will be its ability to function as a means of exchange, a store of value, and maybe helping unlock particular features within the Metaverse application. Another feature a Metaverse token can have is being used to pay for transaction fees within the Metaverse. Ultimately, the more valuable utilities it will have, the more valuable it will be in the Metaverse economy as well as the larger crypto economy.

Step App uses two Metaverse tokens with multiple purposes. The first one is FITFI, which gives holders governance powers. The second one is KCAL, which holders can use to buy SNEAK NFTs. The latter Metaverse token also generates value for the in-game economy, allowing users to mine, earn, and stake.

  1. A Metaverse Token Needs to Provide Staking Rewards

Staking is a common practice in the crypto industry, allowing token holders to earn a passive income on their assets. Staking works by locking tokens as liquidity for various purposes, and in return earning a percentage of the protocol’s yield. Many crypto holders use this strategy to enhance their portfolios without having to trade their assets.

An exceptional Metaverse token will enable holders to stake their assets and earn handsomely from it. This way, the project will attract people interested in staking its Metaverse tokens, and potentially grow their user base whilst gaining more token holders at the same time.  

For instance, a Metaverse P2E (play-to-earn) game could attract more than just gaming enthusiasts. Some of its users can join it solely for the high staking rewards. In the long run, this results in a larger and more versatile community keeping the project rolling. Additionally, even existing community members, and users are more likely to hold on to their Metaverse tokens if they can earn a good passive yield on them.

Step App allows users to stake FITFI tokens and win loot boxes which contain specific SNEAK NFTs and in-game skins. SNEAK NFT holders must stake their assets to earn KCAL tokens, which the platform issues once every epoch (10 days). Unstaking before claiming KCAL tokens burns the earned KCAL.

Additionally, the platform provides some of the highest staking rewards in the industry. According to its tokenomics, the project allocates 20% of FITFI tokens to staking and liquidity. Moreover, it makes up to 50% of NFT trading fees available as staking rewards. Lastly, it distributes up to 50% of market-bought tokens to stakers.

  1. A Metaverse Token Needs to Have Limited Inflation

As the ongoing economic crisis proves, inflation can reach every aspect of our lives and ripple through all financial markets. In the crypto market, inflation can diminish a token's value, reduce demand, and stagnate development. This is one of the reasons many projects struggle to stay afloat during a bear run or a crypto winter.

A great Metaverse token will have high resistance to inflation, and limited inflation to begin with. This trait will help it remain relevant and overcome dire economic periods. By doing so, these Metaverse tokens will particularly appeal to individuals seeking to hedge against the inflation devaluing their fiat currencies. 

Attracting more capital during a high inflation period might be challenging for most Metaverse tokens. However, a project boasting a solid concept, a practical purpose, a sustainable roadmap, and limited inflation could achieve this feat. This way, it could not only resist inflation but thrive throughout it.

Step App has designed a Metaverse that supports its Metaverse tokens, so that they have actual value, and have limited inflation. Also, unlike many projects, STEP funds a good portion of the Metaverse tokens’ staking reward using fees, and other non-inflationary means.

  1. A Metaverse Token Needs to Provide Governance 

Decentralized finance (DeFi) appeals to many people because it offers asset control and decision-making to users. Taking the power reins from the centralized authorities results in distributing a project's management to its users. And this is best observable in a decentralized autonomous organization (DAO).

A DAO rewards token holders with voting rights and other privileges. Generally, users get to stake their tokens in exchange for tabling a proposal or voting on one. In return, they have a say in the project’s development. Moreover, they may enjoy member perks for being active in the DAO, such as rewards and reflections.

Metaverse token projects that choose to involve their communities in the governing process have a better chance for greatness. This strategy allows the community to feel like part of the project and contribute immensely, especially by supporting the project in their social communities.  Building this enables them to reach consensus faster when making important decisions. Also, it allows them to raise funds quickly, and develop quicker than those projects where the developers hold complete control.

Step App features FITFI, a governance token fuelled by ecosystem fees. This token gives holders the right to vote upon proposals submitted to the Step Ecosystem. The platform aims to empower its users through this feature and give them more decision-making power in the long run.

  1. A Metaverse Token Needs a Deflationary Mechanism 

Another essential trait of outstanding Metaverse tokens is the ability to have a deflationary nature. This means that the token's total supply is capped, and most importantly can be reduced over time. Simultaneously, the market value of a Metaverse token with an actively functioning deflationary mechanism should rise, and reward holders with an increasingly valuable asset.

Generally, deflationary tokens gain more community traction because they feature complex underlying mechanisms. For a deflationary mechanism to sustainably function the project needs to be able to collect fees from somewhere, and a project with a robust deflationary mechanism will have something like that in place. After all, the protocol must have ways of gradually reducing the token supply, including buying back and burning tokens periodically.

Step App employs an advanced deflationary mechanism to ensure its Metaverse tokens enhance in value in the long run. Its tokenomics system includes solutions like locks, buybacks, and burns. This way, the platform aims to reduce the total and circulating supply, which increases the value of the project’s Metaverse tokens.

  1. A Metaverse Token Needs an Underlying Asset Backing

Not every great Metaverse token has this trait. However, those most likely to succeed have the benefit of being backed by a reliable underlying asset. Whether a real-world or digital asset, a backing asset can help the token avoid price volatility and massive devaluation.

In the crypto world, stablecoins use fiat currency and other real-world assets, such as gold, to maintain a steady value on the blockchain. For example, USDC and USDT need the USD price of their token to stay  at a 1:1 ratio. Therefore, their value is always $1 or slightly around it. The companies that issued these tokens claim to have the exact reserves in USD backing every single one of their existing tokens on the blockchain. While they haven't been audited in some time, they still benefit from the industry’s widespread credibility.

A strong Metaverse token could rely on a backing asset to ensure more stability and sustainability. Token holders can use it in trades or as a store of value without worrying about its depreciation. Lastly, it has a better chance of purpose diversification and listings on more crypto exchanges.

  1. A Metaverse Token Needs Low Transaction Fees

Besides the usual network transaction fees, a Metaverse token can also be subject to a Metaverse-imposed transaction fee. To this end, the Metaverse must set an appropriate transaction fee, preferably a very low one. Generally, users will prefer a no-fee structure. However, the Metaverse needs to generate revenue thus some Metaverses opt to charge transaction fees.

A Metaverse token transaction is an event recorded on a blockchain. This means people must also pay transaction/gas fees to the blockchain the Metaverse token and Metaverse are based on. A Metaverse doesn't always have control over these network transaction fees. However, a Metaverse should try to develop itself and its token on a blockchain that charges relatively low fees.

Step App (FITFI) is built on the Avalanche blockchain. This network uses the proof-of-stake (PoS) consensus mechanism to guarantee system security. Also, it imposes some of the lowest fees in the cryptosphere, allowing the Step App Metaverse users to enjoy low network transaction fees.

  1. A Metaverse Token Needs a Metaverse with Revenue

Lastly, the ideal Metaverse token is empowered by a money-making project. Whether it includes a sports app, a P2E game, an NFT marketplace, or all of the above. The Metaverse must undertake revenue producing initiatives to support its Metaverse token. After all, every project and company needs to be self-sustaining, so that it can grow organically.

A revenue generating project starts with a robust business model able to attract users and consumers. This model has to attract numerous users from the start to help raise funds and create a powerful brand. The more users that join, the faster the project can develop and generate revenue. In turn, this builds brand awareness, which should further drive revenue growth in the long run.

Remember that not all Metaverse projects have sustainable revenue models, and some of them don’t have any revenue model at all. Nevertheless, at a closer look, their Metaverse token may appear to have some of the traits above, which could point towards a potentially sustainable Metaverse ecosystem down the road.

Conclusion - A Great Metaverse Token Needs the Right Balance

Metaverse tokens are the next big thing in the rapidly-growing crypto space. These digital assets can have multiple use-cases, reward holders, and provide governance opportunities over an entire virtual world filled with people. Moreover, they can open the door to even newer possibilities, and applications in the virtual world.

A Metaverse token’s prerequisites for greatness include widespread distribution, brand reliability, multiple use cases, and limited inflation. Also, this asset should benefit from a deflationary mechanism, a cash flow producing business model, and a strong backing asset. Lastly, its holders should enjoy substantial staking rewards, governance power, and cheap transactions.

As the Metaverse becomes increasingly popular, users should do their due diligence before investing in a project. The traits above could pinpoint a future successful Metaverse token, but they do not offer a guarantee. Ultimately, users should research thoroughly before joining any crypto-related initiative.

Step App checks many of the boxes above, and is one of the few projects using a dual Metaverse token system. Its FITFI token provides the ideal balance between distribution, purpose, and user governance. The growing ecosystem allows users to mine, stake, and earn from various challenges, games, and fitness activities. Furthermore, STEP’s users enjoy low fees, and get to use one of the most popular FitFi apps developed. 

Learn more about Step App by clicking any of the below links:

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