The Sweat Foundation recently announced that they will use 50% of their profits to buy SWEAT and destroy it, else to distribute it as staking yield to users staking SWEAT in the Sweat Wallet app. This will reduce circulating supply while ensuring that their staking initiative is net-deflationary. For more on how the Foundation makes revenue, see below.
The Foundation will be buying SWEAT on the secondary market, and subsequently publish evidence of this.
The Foundation are implementing buy and burn to increase token utility and prevent the token’s dilution via inflation. Buy and burn means that the massive popularity of Sweat Wallet does not result in mass inflation and sustainable economics.
Very significantly, SWEAT’s token is designed such that SWEAT will be exponentially harder to mint with time. At launch, 1,000 steps mints 1 SWEAT. In one year, 1,000 steps mints 0.33 SWEAT.
The approach to yield
The Sweat Foundation’s buying of SWEAT on the secondary market to distributetsbute as yield ensures a net-deflationary staking product. This is an important distinction, offering users cetasnity that the staking is not simultaneously massively diluting their tokens.
How do they make revenue?
The Foundation makes money principally in two ways.
- User engagement (B2B) – with millions of users, the Sweat Wallet offers valuable opportunities to monetize user engagement. Their Beta Learn to Earn had 815K participants! While the in-app rewards service is a way to market products and services to millions, including NFTs.
- Transaction fees (B2C) – the Sweat Wallet is a new crypto wallet offering millions access to the world of Web3. It has a rolling list of new features which, when combined with a massive userbase, can generate enormous funds in transaction fees. Products and features in the app will include: staking, fiat on-ramp (purchasing crypto with a bank card), crypto-crypto exchange, withdrawals, NFT games, NFT marketplaces, and much more.