“GoSleep’s governance token $ZZZ will be launched as a Launchpad on Bitget, Gate.io, and MXC, perhaps heralding the Sleep to Earn narrative as the new favorite in the X2E space.”
“Sleep to Earn” becomes the new focal point in the X2E market
StepN set a great example for the X2E track last year, expanding the scope of this field beyond the game-based P2E (Play to Earn) model. After StepN’s explosive popularity, more and more X2E concept products began to enter the market. In April of last year alone, over 102 top venture capital firms and infrastructure service providers in the crypto market bet on X2E concepts, with investment exceeding $12 billion. This led to an abundance of X2E track narratives and concepts, such as Bike to Earn, Learn to Earn, Drive to Earn, Sleep to Earn, Eat to Earn, Read to Earn, Write to Earn, Code to Earn, Create to Earn, Sing to Earn, Meditate to Earn, and even Sex to Earn.
As StepN’s revenues plummeted in the second half of last year, leading to a rapid decline, capital and users accelerated their outflow, causing more and more users to lose interest and passion for this track. Starting in June last year, market sentiment continued to decline, with GameFi market financing in October and December reaching a low point. It’s easy to imagine the overall situation for X2E as a subcategory of the GameFi track.
However, with the start of 2023, the gradual recovery of the market has improved the overall financing situation, and we can see a resurgence in the GameFi market’s overall financing. Although there are no clear market indicators for the X2E sector at the moment, we see the “Sleep to Earn” concept represented by the GoSleep project as the first driving force in this sector.
It is understood that the GoSleep project’s Starlight Edition, with two rounds of 5,000 NFTs each, was completed on February 22nd and March 1st of this year. The second round of Mint was priced at 0.05555 ETH, and the current floor price for the Starlight Edition on OpenSea is 0.079 ETH.
Last year’s Nightscape Edition NFT, which had a floor price of around 0.38 ETH in February this year, now has a floor price of 1.3 ETH. So, regardless of which type of NFT was held early on, the profits are generally over 50%.
Additionally, not long ago, GoSleep officially revealed a financing round led by Foresight Ventures, with participation from CCC Capital, Amber Capital, SevenX Ventures, Kucoin Ventures, and Gate Labs, totaling 2 million US dollars. At the same time, GoSleep’s governance token, $ZZZ, will be listed on MXC, Bitget, and Gate.io as a Launchpad on April 19th.
From GoSleep’s relatively impressive market performance, we can almost be certain that the X2E sector is regaining its momentum, and on the other hand, “Sleep to Earn” is becoming a noteworthy new X2E narrative. Will it be able to replicate StepN’s performance from last year?
Is “Sleep to Earn” a sustainable narrative?
Sleep to Earn was a concept proposed last year, where users can earn token rewards through sleeping in different mechanisms based on NFTs. GoSleep is currently the most representative application in this sector, so let’s start by discussing GoSleep to further understand the Sleep to Earn market.
● GoSleep’s “Sleep to Earn” approach
GoSleep is a Sleep to Earn application built on Arbitrum One, where users can earn token incentives by sleeping. It also promotes the concept of HealthFi (a compelling narrative) to improve users’ sleep quality in a more Web3 way through blockchain technology and cryptocurrency.
In documents published by GoSleep’s CEO, in-depth research was conducted on the entire sleep market. The Asia-Pacific region is experiencing the fastest overall market growth. For example, the mindfulness meditation app market has a compound annual growth rate of 30.5%, exceeding 2.63 billion USD by 2028, led by the Asia-Pacific region (with a 23% market share in 2021). Another indicator shows that sleep-related applications are the most favored by consumers in the meditation app market. GoSleep initially gained widespread attention in Japan, followed by South Korea, with a focus on East Asia. Currently, the community’s active regions have expanded to include East Asia, North America, and Europe.
When using GoSleep, users need to set a sleep goal, such as going to bed at 10 pm and waking up at 8 am the next day. After setting the sleep goal, users can earn different rewards based on their sleep quality (which serves as a completion metric). The better the sleep quality and the more the goal is achieved, the more token rewards users will receive.
In applications such as P2E games, Move to Earn, Learn to Earn, and Write to Earn, it’s easier to quantify the completion of task indicators, which allows for better measurement, judgment, and quantification of user behavior. In comparison, Sleep to Earn doesn’t provide a very intuitive way to quantify sleep quality. GoSleep uses Apple’s Health Data Center or Google Sleep API to obtain users’ sleep data, analyzing their phone’s ambient light, noise, and device sensors (heartbeat, body temperature, etc.) during sleep to detect sleep quality.
Quantifying the data is a crucial process, and accuracy and fairness will determine the sustainability of ecosystem development. For data processing, GoSleep uses an advanced AI sleep algorithm model. The sleep scoring algorithm considers the following sleep parameters:
Sleep onset latency
Sleep cycle consistency
Sleep goal achievement
Sleep Quality Score is calculated by applying weights to these parameters and summing the results. Weights are determined by the relative importance of each parameter in assessing overall sleep quality. The Sleep Quality Score calculation formula is as follows:
Sleep Quality Score = w1 * Sleep Duration Score + w2 * Sleep Efficiency Score + w3 * Sleep Onset Latency Score + w4 * Sleep Cycle Consistency Score + w5 * Sleep Disturbance Score + w6 * Sleep Goal Achievement Score.
To make the score calculation more accurate and fair, GoSleep recognizes the need for a more advanced and accurate sleep scoring method, which is why it has chosen to incorporate AI algorithms into the next stage of development. AI algorithms can effectively analyze large amounts of sleep data, identify patterns and trends, and adapt to new information. This makes AI well-suited to improving the accuracy and adaptability of GoSleep’s sleep scoring system.
By incorporating AI algorithms into sleep scoring strategies, the following objectives are expected to be achieved:
Enhanced sleep quality scoring model: AI algorithms can more accurately analyze sleep data, detecting patterns and trends that may be invisible to the human eye. This will enable GoSleep to provide users with more accurate sleep quality scores, helping them make better decisions about their sleep habits.
Cheating prevention: AI can identify anomalies in sleep data, such as patterns suggesting false data input. By detecting these inconsistencies, GoSleep can ensure that only genuine sleep data is used for scoring and rewards, maintaining a fair gaming experience for all users.
Of course, before participating in Sleep to Earn through GoSleep, users need to obtain a room NFT in advance. This NFT features scarcity, levels, and attributes, all of which are tied to the number of tokens users can earn.
Attributes: All NFTs in the app have two random attributes: efficiency and comfort. Efficiency primarily affects sleep token production, while comfort mainly affects governance token production.
Rarity: NFTs are divided into five rarities based on scarcity: free, common, rare, epic, and legendary. When an NFT reaches its maximum level, users can switch their earnings to governance tokens.
Level: All NFTs start at the same level, and users can upgrade by consuming sleep point tokens. The higher the level, the faster the sleep token rewards are produced. However, the higher the level, the more sleep tokens are needed for each upgrade.
Durability: Each NFT has durability, which is deducted each time a user collects a reward. When durability reaches zero, the NFT cannot be used or claimed for rewards. Users then need to consume tokens to repair the NFT, with the number of tokens consumed increasing with each repair, up to the maximum number of repairs. Upgrading the NFT’s grade will increase the number of repairable times.
We mentioned earlier about the Starlight Edition NFT and Nighttime Edition NFT, which are types of room NFTs, and they have different earning effects.
Therefore, GoSleep’s specific quantification indicators will include:
User sleep goal matching
Based on the degree of match between the user’s actual sleep and the set sleep goal, data matching for sleep and wake-up times is performed. The higher the match, the more token rewards users receive.
User sleep duration matching
GoSleep’s goal is to promote healthy sleep habits. The globally recognized daily sleep duration is 7 to 9 hours. The closer the user’s actual sleep duration is to the recognized value, the higher the reward. When sleep is insufficient (below the recognized value) or too long (above the recognized value), users receive fewer token rewards.
Wearing hardware devices like iWatch
Data provided by hardware devices such as iWatch or wristbands is more accurate and detailed. Users wearing these hardware devices can receive additional reward systems.
NFT attributes, rarity, and level
Firstly, users need to have a room NFT to enter the “Sleep to Earn” mode. The room NFT acts as the core asset, and its level, attributes, and rarity are directly tied to the number of token rewards users can earn. The higher the level and rarity of the NFT, the more token rewards users can receive.
However, it’s worth mentioning that GoSleep allows players to receive a free room NFT at registration, in addition to purchasing one. This means that non-paying users can also benefit from Sleep to Earn. This approach effectively caters to more Web2 users. While there might be some early “free-riders” (an issue that all Web3 applications face), this can be seen as a highly competitive Web3 marketing tactic, which will undoubtedly be beneficial for its long-term development.
After establishing the basic Sleep to Earn mechanism, GoSleep further integrates GameFi and SocialFi elements.
In addition to launching room NFTs and setting up upgrade mechanisms, GoSleep also introduces prop-type NFTs (beds, curtains, pillows) that users can use to enhance their earning capabilities. These props can also be merged, upgraded, and traded in the market (for example, trading some unique composite NFTs to earn profits, with the platform taking a 5% cut as revenue).
Users can also engage in social gaming through GoSleep, form sleep groups, share sleep records, and more to increase user retention and foster new user growth through social interactions.
Furthermore, GoSleep will offer a sleep assistant based on a sleep AI algorithm model that uses big data to generate users’ sleep scores (composite scores) and provide sleep recommendations. This kind of feature is usually paid in Web2 products, so it gives GoSleep a competitive edge for targeting Web2 user groups. Surrounding its ecosystem, GoSleep is expected to explore more business opportunities and fully utilize the functions and advantages of its crypto tokens. For both GoSleep and its users, this creates a win-win situation. The platform can generate revenue from a massive user base and explore diversified business scenarios, while users earn tokens and improve their sleep quality. The project’s narrative is inherently positive.
● GoSleep’s token model
GoSleep adopts a dual-token system, consisting of the application’s internal sleep credit token NGT and GoSleep ecosystem’s governance token ZZZ. The token economy model aims to ensure the sustainable development of GoSleep’s ecosystem. The project itself is a circular token economy model, including generation (earning) and consumption (payment/expenditure). The total token supply is kept below the necessary amount to maintain overall value and resist inflation.
The sleep credit token NGT, produced within the app, has no total supply cap. Users can earn NGT token rewards by completing sleep tasks using GoSleep. NGT can be used for NFT upgrades, NFT repairs, and opening NFT loot boxes, among other things.
ZZZ, as the governance token in GoSleep’s ecosystem, has a total supply of 600 million. ZZZ can be used for staking to gain governance voting rights and staking rewards. It can be consumed within the application, including NFT upgrades, minting new NFTs, and staking to increase the probability of NFT upgrades. In GoSleep, users need to consume a certain amount of ZZZ and NGT tokens to mint new NFTs. GoSleep’s token model mostly follows the StepN model, but whether this token model can play a role in enhancing the moat in the Sleep to Earn narrative still needs further observation.
● Can the Sleep to Earn narrative last long?
The Sleep to Earn narrative itself has its advantages. Sleep is an essential human activity, and everyone needs it. A good sleep quality is crucial for everyone, and theoretically, everyone is a potential user. Compared to activities like running, singing, and reading, Sleep to Earn faces a broader potential user base. These activities are not things that everyone must do, especially since laziness is human nature. Most users may not be able to sustain participation in such activities, leading many users to pursue speculative purposes. Therefore, Sleep to Earn applications can more easily appeal to users, providing more apparent benefits beyond earning. For users and Sleep to Earn platforms like GoSleep, it’s a win-win situation.
Sleep to Earn also has a “lighter” characteristic. From the GameFi perspective, lightweight applications are becoming the trend, with puzzle games like match-3 becoming the new norm for GameFi. The user participation threshold is lower, and there are no time or place restrictions. Compared to other types of X2E narratives, Sleep to Earn has lighter features, requiring no additional heavy peripheral equipment to participate, and the entry barrier for C-end users is lower. For example, GoSleep doesn’t require high-end hardware equipment, as smartphones and smartwatches can meet the basic needs (which are widely available), and this is Sleep to Earn’s greatest advantage.
Looking at the X2E track itself, “X” and “Earn” are two parts, with the latter serving the former, hoping to promote the “X” narrative better through the “Earn” feature. The ultimate goal of the product is to attract more users to participate and develop the ecosystem in the long term and continuously. However, in reality, many X2E projects reverse their priorities. For example, early StepN users could recoup the cost of a pair of shoes in just three days. Still, changes in market factors and declining output led to many users experiencing loss of earnings and eventual user loss.
From a product growth perspective, relying solely on the “To Earn” traffic acquisition is not enough to ensure continuous growth. If the project’s economic model design focuses too much on the X scenario’s value, a decrease in economic output returns could lead to massive user withdrawals, making the product unsustainable and ultimately becoming a pure “Ponzi scheme.” Additionally, bringing positive value to the public is crucial for attracting more Web2 users and expanding the user base. After all, with a limited Web3 user base, expanding to Web2 users can bring more users and traffic, creating a vast imaginative space for ecosystem development. From this perspective, the Sleep to Earn narrative is more inclusive and promising.
The Sleep to Earn narrative is popular in the market, and early market allocations for projects like GoSleep are almost impossible to obtain. Users’ recognition of GoSleep NFTs, even in the absence of a complete recovery of the NFT market, shows its popularity. GoSleep’s public beta launched on April 2nd, and within just 36 hours, it broke through 30,000 real users. As of April 15th
Essentially, X to Earn represents a new shift in the ideology of Web2 product forms. It is both a new attempt and a breakthrough. As the X2E narrative develops, applications in this field are becoming more lightweight and widespread. Although these Web3-focused applications cannot compete in terms of product maturity or user base, once Sleep to Earn-based applications like GoSleep create a siphoning effect on Web2 users, they have the potential to propel the Web3 world into a qualitative leap.