The Block: Stepn to burn GMT using a portion of its $122 million Q2 earnings

Stepn, a Solana-based game that rewards users with cryptocurrency for walking or running, announced Tuesday that it has earned $122.5 million from platform fees in the second quarter of 2022.

Five percent of those earnings will go toward buying and burning Green Metaverse Token (GMT), the game’s governance token that users earn after reaching level 30, as well as sneakers, non-fungible tokens that a user must have to begin earning in-game cryptocurrencies.

The move to burn GMT is unusual, considering that GMT has a fixed supply of 600 million coins, whereas Stepn’s other in-game currency Green Satoshi Token (GST) has an unlimited supply, making it more likely to experience inflation.

It’s also not common for blockchain-based gaming projects to buy back their own tokens. This practice is more common among decentralized finance (DeFi) protocols such as PancakeSwap .

Still, Stepn announcing the GMT burn shows that it’s making steps to avoid the destructive in-game token inflation that plagued other blockchain-based games such as Axie Infinity . Imbalanced issuance-to-burn ratios of Axie’s in-game tokens contributed to the once popular game’s ultimate decline , The Block previously reported.

In addition to using Q2 profits for token buybacks, Stepn stated that it will use the funds to bolster security, reduce cheating and expand its team.

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