Walk & Talk in Sintra with Sweatcoin's founder | S5 E25

Well , oleg from Sweat Economy , you know the , the sweat app . I think it's one of the most downloaded fitness apps in the world by now .

We spent quite a bit of time forking it , but we realized it was too slow , too expensive and no smart contracts . And we've spoken to Vitalik in early 2015 about using Ethereum . Well , it wasn't called Ethereum back then . It was a kind of secret name project , but it was too early and we launched Centralized with a proposition .

It pays too early and we launched centralized with a proposition it pays to walk and guess what ? It flew . We ended up having millions and millions of users huge growth , because it's a magical proposition . We literally took

your steps , verified them if they were genuine and if they were , then we paid you sweat coins , our centralized sort of digital currency .

It took nearly eight years for us , or actually for blockchain technology , to caught up with our scale and with our speed and throughput requirements , and only in 2022 , we were able to launch our crypto token , sweat , that is traded on probably about 30 exchanges by now and our own non-custodial wallet , sweat wallet .

So sweat coin tracks your steps and it's a health and fitness app and if you opt into crypto , then you are earning sweat for your steps and you're managing sweat and all other tokens crypto tokens in sweat wallet Sweat wallet proposition walk into crypto literally . Okay , because everyone's got legs .

Everyone is interested in Web3 , but typically new user and this is our focus . We want to bring next billion people into Web3 and do it in an easy to understand , easy to use and no barriers way . And three things that all of our users , when we were digging into their perceptions and issues with Web3 , told us that there were three barriers for them .

First , there are not that many products in Web3 that have a simple and easy appeal to them . When they look at Web3 , they kind of go well , there are these derivative exchanges and then there are these currency trading platforms , but I don't do it now . I don't feel like I need to go into Web3 to start doing it . It

doesn't really solve any of my problems right now . That's one . The second one those that have experienced web three products and downloaded wallets they were complaining that the user experience ux , yeah , was just cumbersome . 24 words . Don't take a screenshot , don't write them down on paper . Use metal plate and the nails .

Scribble them , split it into two halves , keep it into geographical locations , but if you lose it , you lose all your money . Yeah , and people are like you know what ? This is just very , very hard . And the third those that mastered first two .

They were really concerned to pull their credit card out , because normally , when you install a wallet I don't know MetaMask , trust wallet in order to start you need to have some crypto . How do you get crypto if you don't already have it ? You need to pull your credit card out and buy some .

You need to pull your credit card out and buy some , but typically you would need to buy several hundred dollars worth of it in order to start playing . And people are like all I hear about Web3 is this bridge drained of 600 million , that bridge drained of 300 million . That smart contract is hacked . This happened .

So you know kind of they're like you know it's a very expensive entry fee to start educating myself of how crypto works and we decided that we can address all three . We pay you to walk and allow you to literally walk into crypto . Everyone's got legs . The app is free . What's not to like ? It doesn't take long time to understand the proposition .

Our UX is extremely simple . You create your crypto wallet using your social logins Apple ID on iOS and Google ID on Android and third , you start earning by moving your feet . You get your cents , then you get your dollars .

You understand how to send and receive your tokens , you understand how to swap tokens , you understand how to stay tokens , and we put a lot of effort into explaining how Web3 works .

There are a whole kind of blast of lessons and educational material that , if you go through it and you answer the questions correctly , at the end of it we will actually reward you . And sometimes it's not even sweat , but it would be partner tokens .

So you are not just owning one token crypto token sweat but you're starting to build a portfolio of various different crypto assets . So you know what's not to like .

So you already talked about a lot of issues that you solved with the app and you need crypto for the masses . Are there still objections or still hurdles that you see today with people entering the Web3 space , if I can say it like that , with an app like yours ?

to the needs of next billion . There is a frequent misconception and I've heard it several times from both investors in Web3 and some founders that , ooh , you know , there is no market there .

And the reality is this perception is largely driven by one thing for the last , however , many years probably six or seven as an industry crypto , web3 , phone chain , however you call it have been obsessed with one metric of success TVL , total value locked Okay .

And if you are thinking that this is your success metric , then it is extremely difficult to build a product for the next billion people . Even if you are a founder starting to think , oh , I'm going to create a beautiful product that's going to onboard , you start building .

You realize that you can hit your success by making 10 phone calls to whales and convincing them to come to you . Yeah , and if you convince them to come to you , then instead of building product for the next billion people , you end up building a product for these 10 people .

I know , yeah , who are already in crypto , and that means that you're going to replicate what they're doing right now , possibly with some bells and whistles . You will need to give them better return , better APY or something to sweeten it for them and to convince them to bring their capital to you .

But fundamentally , that really kills innovation , because you are building what exists and you are targeting 10 people .

Yeah , in order to build for the next billion people I'm closing the circle you need to use completely different success metric and we , for example , are focusing on active users or active wallets , and I've heard a lot of concerns about this metric , because people are saying well , active wallet doesn't mean that there is a human there .

You can automate it and make it kind of bots have addresses . You know what ? If you actually put your mind to it , you can very easily separate bot from human . So it is a problem , but it is a solvable problem if you start thinking about it .

So my answer would be the biggest barrier is , as an industry , we need to start focusing less on TVL and more on bringing the next billion people .

If we bring them , tvl will come too , but if you focus immediately on TVL , you end up focusing on the wrong audience , developing wrong products for the next billion with wrong experience , and you're not driving innovation and you're not really helping crypto to break into a mass market and become as ubiquitous as internet usage .

course , then you have a good story to tell .

If we're thinking about dApps , so decentralized apps , so products for end users , if you look at dApps with more than 1,000 users , there are less than 600 right now , so 2,000 rails and only 600 carriages running on them . We have an upside industry . We need a lot more dApps .

We need a lot more innovation in the end-user products , as opposed to building more chains .

A lot of stuff is coming in and recently , well recently , in the last sort of year there is a huge number of suggestions . Why don't you start rewarding push-ups ? And when I ask a question , how do you reliably verify them so that we know that you really did that 100 push-ups , you really sweated , you really moved the needle ?

Very frequently , the answer is going to be just ask AI . Ai can figure it out , and there is like a almost magical perception of AI that AI can solve any problem and address any concern or materialize any idea that people can have . I have a slightly

different attitude towards AI . I remember when internet was in a very , very similar place as AI right now and everyone was thinking well , not everyone , but a lot of people were thinking that that's it . That's a brave new world . All rules are off . Everything is going to be completely different . The world is going to function in a completely different way .

And to illustrate this point , in the 90s or at the end of 90s , when people were building startups , they would feel bad if they were to think about revenue and profit .

It is a tool Pretty much every company is using it and , yes , it changed a lot of things and it's fundamentally cut time of communication convenience . It gave us smartphones , but still the rules of business apply .

The businesses that are successful on the internet are businesses that are at scale and businesses that are generating not just revenue but they're generating humongous profits . And this is something that in crypto , on-chain , web3 is still not a dominating narrative .

There are a lot of projects and a lot of people that I'm talking to that would not even think about revenue . Their approach to their business would be okay . I have a token , we get a good price for it . We have a treasury , we sell some token , we fund our operations . Why do we need to think of revenue ?

But it is similar to a Web2 startup raising money and just simply spending it down without thinking how they're going to be earning .

It's a way to nowhere , because either your token declines in price so that you can't sell it and then all of a sudden , everything goes down the pan , or you sell down all your tokens and then you run out of treasury Again , similar situation .

So thinking of revenue and profits is absolutely essential for any business , and this is almost like a new narrative for a lot of people in Web3 . We've started with this from the very beginning because I guess we figured out how to pay people to walk while being profitable .

It is possible , and in Web3 crypto it should be even easier , but it's a new and nascent industry . I'm not saying that we are profitable in Web3 yet , but we are very much on the path to get there and within the next 18 months we will be .

And as a pure Web3 business , sweat and Sweat Wallet has only one way of really utilizing profits , which is for you , our community , to tell us what to do , and every single DAO vote that we ran before has pointed towards one direction buybacks .

So if we're continuously generating profit and we're using those profits to buy back and burn tokens , guess what's going to happen ? Same rules , same rules , but very different from quite a lot of businesses in Web3 . Absolutely .

Yeah , and how do these people connect with each other ? How do they find each other ?

You know , some of our staunch users and big fans are creating groups in their respective countries and sometimes invite me to podcasts and conversations like this , but unfortunately , because typically we cannot meet in person , it all happens on Zoom . This is an incredible exception because , look , we can chat and we can earn sweat while doing it .

Yeah , what is the feeling you have right now , oleg here , when you walk around ?

How does it work if they want to have earn some sweat ? There is a sweat coin app , but there is also the other , sweat wallet . How do they work together ?

Non-custodial , mobile-first wallet , and this week and on my mobile device , we're already supporting five chains Near Ethereum Mainnet , base , bnb or BSC and Arbitrum , and over the course of the next six months we're planning to add all the other chains that kind of really matter and have big communities and a lot of projects that our users are interested in .

If you want , in addition to just wallet functions , to earn by walking , you just click on a button inside sweat wallet . Add sweat coin , where your steps will be tracked and the Oracle will communicate to our smart contract the number of steps that are verified and you will be issued in appropriate amount

of sweat . Interesting thing about tokenomics of sweat and why our users not selling it is every next sweat requires just a bit more steps for you to walk . Think of it as Bitcoin halving , but happening in real time . Two reasons for this . One , it pushes people to walk more and earlier because return on movement is better .

Second , it allows us to really manage token supply and achieve deflationary position , which we achieved within the first year of our existence .

We've been shrinking in our supply ever since because the amount of tokens emitted for steps is lower than the amount of tokens that are taken out of the market , either as revenues or buybacks , or are getting staked into long-term jars in return for yield , which , in our world , is also based on your physical activity .

If you walk 10,000 steps today , you earn 10% APY tomorrow . If you walk 20,000 steps today , you will earn whooping 20% APY tomorrow . If you walk zero and you sit in front of Zoom I had days like that , you know it does happen then you earn zero .

So in our world , it is truly all about making your movement valuable and giving you motivation to be active and why it gives value to sweat . Very simply , because you know that your movement is valuable .

Your insurer knows your movement is valuable , your employer knows that your movement is valuable , your healthcare provider knows that your movement is valuable and increasingly , even governments are realizing that physically active people are really really valuable for them Because guess what ?

You live longer , you are healthier , for longer you're economically active for longer , and in the most cynical way for governments , they make more revenue out of people who are healthy and economically active for longer revenue out of people who are healthy and economically active for longer .

It's good business for everybody and therefore your movement has tangible value , which is a big difference from a lot of other tokens that only have utility , and the utility of our token for now is staking , again linked to your physical activity , and we pay those rewards out of the revenues that we generate , not out of our treasury .

Second is , we have a lot of partners and we have a lot of businesses that are giving you rewards tangible rewards and also digital rewards in exchange for your sweat , and we are now rolling out a utility where sweat is going to become a universal gas token so that you will be able to pay your fees with your feet .

On any chain , any action , Some chains you will be able to generate enough to cover fees so that you never pay out of 410 . Well , there are some chains , like Ethereum , where fees are quite high .

Then you might have to add a little bit of sweat , but it is an incredible utility because , as Yuri would confirm , it's a pain in the neck right now being on multi-chain . You need to juggle 20 different gas tokens and if you run out all of a sudden , transaction's not going through and if you buy token just as gas and the minimum is 50 bucks .

I have this right now . I have $49.95 of toll on Polygon because I needed to run a transaction . Minimum was 50 . And now I have this $49.95 sitting there . Now , if you could use one token that you earn with your feet for all of that , you wouldn't have to worry and have all of those additional costs and have your capital scattered everywhere .

You just have one single view of all your assets on any chain and you will be paying

your fees with your feet yeah , that's wonderful actually .

The largest company in the world in 99 was not Sunlakers , it's Cisco . Oh yeah , it was all infrastructure companies at the very top . And then narrative shifted and everyone focused on consumer internet . That gave us Google in 2003, . That gave us Facebook in 2007 . And that's where bulk of the returns and money on the internet were made .

We're on the cusp of switching to consumer crypto and we want more companies Crypto and we want more companies , more people demanding this , wanting this and building this .

Because we are ready , we have plenty of infrastructure to start developing propositions that will bring next billion people and , of course , we will be one , but it certainly is not going to be only one company that will make it happen .

So , if you're interested in consumer crypto , we also are starting a movement on Consumer Crypto Consortium and we are in conversations with undisclosed locations in the world to start Consumer Crypto Conference , or C3 , that we are starting to incubate , because we believe that the future of crypto is consumer crypto and it is also where people will be , where TVL will

be and where all the money of crypto are going to be made in the long run . Come and join us , absolutely .

and pleasure in one , absolutely , absolutely , and it's also good for your health , guys . Exactly so . As I mentioned , oleg has the app , so definitely install Sweatcoin . If you are interested in the retreat and you listened until this moment , send me a DM and mention the word sweat . I will give you a nice discount .

Of course , everyone that comes to the retreat will use the app , because we will need to earn some crypto while we are here .

If you haven't given me the review yet . Also , that helps me a lot . If you give me five stars , I reach an even bigger audience and , of course , I would like to see you back next time . Take care , thank you for having me . Cheers guys .