Over the past few years, the discussion about which industry might spearhead the mass adoption of crypto and web3 technology has been a hot topic. The perspectives among founders, investors, and enthusiasts have varied widely, with each group predicting different paths to onboard the next billion users to web3. 

Enter NEAR Protocol

This debate is not just theoretical; it's also driven by different blockchain ecosystems that are pioneering seamless chain abstraction infrastructure, which aims to bridge the gap between web2 and web3. One of the notable frontrunners in this space is NEAR Protocol. This blockchain has recently developed a chain abstraction layer and built a strong business development team that has forged strategic partnerships with both retail and enterprise products that operate at the intersection of web2 and web3, ultimately onboarding them to web3.
In September 2023, NEAR Protocol experienced a significant spike in user activity, overtaking both Bitcoin and Ethereum in terms of daily active users. NEAR recorded approximately 1.7 million daily active users and over 830,000 daily active addresses according to Artemis terminal

                                                                                                                        Source : Artemis

This surge placed NEAR ahead of Bitcoin, Ethereum, and Avalanche in terms of daily activity, though it still trailed behind Solana, Tron, and BNB Chain. This surge was surprising for a blockchain that many had previously labelled a "ghost chain," with expectations that the increased activity would be a temporary anomaly. However, they were wrong this time

The Catalyst: Sweatcoin

A deeper analysis revealed that this spike in activity coincided with the U.S. launch of Sweatcoin, a fitness and consumer product that rewards individuals for staying active. The launch included an airdrop that further boosted ecosystem activity. Sweatcoin quickly became the leading move-to-earn application in the web3 market, according to the Dappradar Games Report 2023.

                                                                                   Source: Dappradar Games Report 2023

Sweatcoin is a free mobile app available on iOS and Android that rewards users for their daily steps with its native currency, sweatcoins. These sweatcoins can be converted into SWEAT tokens, spent on in-app products, vouchers, benefits, or even donated to charity. The token rewards are settled on the NEAR blockchain with the help of Ref Finance, a leading decentralised exchange (DEX) in the NEAR ecosystem. NEAR's scalability and very low transaction fees made it an attractive platform for Sweat Economy and Sweatcoin, enabling NEAR to reach over 160 million web2 users and around 15 million web3 users. This extensive reach allowed web3 onboarded users to interact with NEAR indirectly by swapping their tokens and engaging in other activities, with final settlement occurring on the NEAR blockchain.

This integration and that of Cosmose AI,and playamber all falling at the intersection between gaming and rewards  led to a 1250% year-over-year increase in the number of daily active users by December 2023, as reported in the Messari State of NEAR Q4 2023 report.

                                                             Source:https://messari.io/report/state-of-near-q4-2023 

 Inside Sweat Economy’s Reward Program

The Sweatcoin Foundation oversees the development of the Sweatcoin ecosystem and manages the reward program. The rewards ecosystem is centred around the SWEAT token, which users earn through various activities within the ecosystem. Following the Token Generation Event (TGE), additional SWEAT tokens can only be minted through movement. 

Here's how users earn rewards or SWEAT tokens and Sweatcoins

1.  Movement: When users move, the app detects body movements and mints tokens accordingly.

2.  Play HERO NFT Game: This player-vs-player NFT game rewards the winner with tokens.

3.  Growth Jar: Essentially a staking mechanism, this allows users to earn staking rewards and receive other exclusive discounts, such as reduced transaction fees and access to premium platform features.

4. Learn to Earn: Users can earn rewards by completing learning quests and tasks.

5.  Yield Farming: Users can farm and earn yield on top NEAR DEXes like Ref Finance.
   

Sweatcoin generates revenue through several channels:

• User Engagement: B2B agreements and partnerships allow Sweatcoin to generate revenue by providing companies access to its user network.

• Transaction Fees: The foundation takes a cut from transactions when users interact with various services within the Sweatcoin ecosystem, such as swapping and trading.

 Challenges and Future Prospects

Sweatcoin, like any tech product, faces challenges and controversies. Some users have been accused of cheating the system by using robotics to simulate movement, which the app mistakenly rewards. This manipulation has been made easier by advancements in robotics technology, allowing users to create robots that shake their phones, mimicking real movement. Additionally, like many GameFi and farming projects, the value of the SWEAT token has seen a decline in recent months. A further decrease in token value could disincentivize users from participating, as the rewards may not justify their efforts. Despite having approximately 200 million users, only about 10% have enrolled in the web3 rewards program and created wallets. This indicates a significant gap, with over 150 million users still to be onboarded into the SWEAT token ecosystem.

To address these issues, the Sweatcoin Foundation should ensure that only non-sensitive data is shared with B2B partners to protect user privacy. Leveraging emerging technologies like AI and machine learning can help detect and curb fraudulent activities, such as fake movements created by robots. These technologies can also enhance user behaviour analysis and improve data security.

Future Outlook

The future of consumer tech products and loyalty reward programs is often difficult to predict due to changing consumer behaviour. However, Sweatcoin's history and current trajectory provide some insights. The web2 version of Sweatcoin has been in the market since its launch in 2015, amassing over 150 million users, 10% of whom have transitioned to web3. Unlike many protocols that see users disappear after initial rewards or airdrops, Sweatcoin has managed to retain its user base, ranking third with a 10% increase in unique active wallets and over 570,000 transactions within the past 24 hours, according to Dappradar's top games section.

                                                                         Source: https://dappradar.com/rankings/games

With plans to expand to multiple chains as indicated in their roadmap, Sweatcoin is poised to attract more users beyond the NEAR Protocol ecosystem. The success of Sweatcoin on NEAR Protocol has also attracted other web2 and web3 products focused on loyalty programs and rewards to the NEAR platform, drawn by its low transaction fees, scalability, and robust support from the NEAR Foundation.

 Concluding

With ample financial backing and a clear, executable roadmap, Sweat Economy is well-positioned to build better products and address the current challenges within its ecosystem. By leveraging AI and machine learning, Sweatcoin can improve fraud detection and enhance user experience while ensuring data security. Despite the inherent challenges and potential roadblocks, Sweatcoin's strategy to capture and retain users appears robust.

In mid-2022, Sweatcoin raised $13 million to expand its product base, enter new markets, and enhance its reward system. By 2024, they had expanded to over 60 countries, built a blockchain-based reward settlement infrastructure, and were working on additional use cases for their SWEAT token and NFTs. Their 2024 priorities include developing better product versions and going multichain to attract more blockchain users beyond the NEAR Protocol ecosystem.

                                                                                          Source: Sweat Economy Roadmap

With strategic investments, a strong roadmap, and the integration of advanced technologies, Sweat Economy aims to continue its growth trajectory, potentially transforming how users interact with web3 and setting a precedent for future consumer tech products in the blockchain space.