Make Money in Your Sleep? Understanding What’s Driving the ‘X to Earn’ Phenomenon

By Eno Zhang, Researcher at Huobi Research Institute

Juggling work with personal commitments is a familiar challenge to the many employees forced to work from home over the past two years. A three-year-old start-up named Sleep Future now aims to improve this crucial work-life balance with the world’s first blockchain-powered sleep health ecosystem. 

Sleep Future claims to improve sleep quality and health in the global community through innovative sleep technology research and development. It does this by tracking people’s sleep using a monitoring app and rewarding them with its $SLEEPEE tokens, which can be redeemed for products and services. 

While this ‘Sleep to Earn’ business model may have drawn cynicism just a few years ago, it is now part of a fast-growing phenomenon known as ‘X to Earn’ which has appeared in many application scenarios of Web3. 

The ‘X to Earn’ concept was first proposed by Ben Schecter, head of operations at RabbitHole, in an article published on the a16z official website. ‘X’ can be any everyday human activity such as eating, exercising, sleeping, shopping, studying, playing games, or watching dramas. ‘Earn’ would be the financial gain generated by performing these specific actions. 

It is foreseeable that in the Web3 era, people can obtain benefits through their daily actions, such as playing games, learning skills, exercising regularly, or exerting their imagination and creativity – and the money will follow. At present, ‘X to Earn’ has surfaced in many application scenarios of Web3, such as ‘Play to Earn’, ‘Move to Earn’, ‘Learn to Earn’, and so on. ‘X to Earn’ may already be building a new economic model centered on user behavior.

Why ‘X to Earn’ is gaining traction

What accounts for the popularity of ‘X to Earn’? It turns out its success is nothing short of revolutionary in tilting the balance of power back towards participants, who previously did not receive benefits commensurate with their contributions. That’s because in most current scenarios, part of the revenue is owned by project developers, or by centralized companies or organizations. Therefore, the essence of ‘X to Earn’ is an interest revolution, giving back participants the rights and interests that originally belonged to them.

Despite its popularity, not everything can follow the “X to Earn” model. This will depend on whether the behavior of a participant results in a contribution that benefits another party. If these benefits result in income that goes to another party, the “X to Earn” model is required to redistribute interests to participants. 

‘X to Earn’ apps to watch

Apart from ‘Sleep to Earn’, there are other ‘X to Earn’ apps worth taking note of:

1. Play To Earn

Making money in the form of games is not restricted by centralization, which corresponds to the Free to Play (F2P) model of traditional games. Players play P2E games and earn in-game basic assets (NFTs) or game tokens. These assets are owned by the players themselves and no longer belong to the game developers. Players can earn real money by trading their game assets on the open market.

According to a report by Dutch market research firm Newzoo, the traditional game market was worth about US$175 billion in 2020 and about US$180 billion in 2021. In contrast, the current market size of tens of billions of blockchain games is only small game. From another perspective, the market development space for blockchain games is enormous.

Axie Infinity alone has more than 1 million daily active users, mainly across Southeast Asia. During the COVID-19 pandemic, Axie Infinity was a life-saver for lower-income players in the Philippines, because they could still play games for a living after losing their jobs. 

2. Move To Earn

Simply understood as making money while exercising, ‘Move to Earn’ (M2E) is a brand new earning model that combines exercise and getting paid, which is represented by STEPN on Solana. StepN’s native token GMT has been one of the most popular tokens on Huobi Global’s exchange platform, with its trading value nearly quadrupling in April. 

In M2E, users no longer play for the sake of playing. Users can start from their own subjective initiative and open the M2E application to earn profits when they want to exercise or go out to play. Players will not lose their enthusiasm for exercising by forcing themselves to exercise, nor will they lose their fitness due to P2E sitting in front of the computer for a long time.

Taking STEPN as an example, users can get “NFT sneakers (Sneaker)” in the app and also equip them with gems (Gems) to increase their attributes. Users can then earn rewards by walking, jogging or running outdoors. Rewards can be NFT assets or tokens, which can also be traded on the market for real money.

This M2E model, which combines blockchain games with real-life mobile devices, not only promotes a low-carbon and environmentally friendly life, but also promotes the construction of the Web3 world. In short, it can kill two birds with one stone.

3. Learn To Earn

‘Learn to Earn’ is to earn money while learning. By learning professional knowledge of a certain industry and participating in question-and-answer tests to obtain monetary benefits, it can motivate users to pick up certain technical knowledge. This is a revenue model that promotes trading activities and popularizes knowledge.

‘Let me speak’, an English learning app available on the iOS platform, is the most popular ‘Learn to Earn’ app as of late. The main way to make money in ‘Let me speak’ is to buy NFT characters and start learning English in the ‘Let Me Speak’ app. Every few minutes, players will be rewarded with instant tokens for the player’s learning progress, and can convert the tokens in their wallet into USDC. Daily income is limited by how much time and energy the characters have to learn – typically 30 to 40 minutes, or the ideal period for learning a new language every day.

Outlook for ‘X to Earn’

Taking a step back to evaluate ‘X to Earn’, it is clear that this business model helps to reinforce user loyalty by retaining users for a long time. It also turns users into co-builders by instilling a strong sense of belonging. However, in the race to quickly enter the market, many projects in the ‘X to Earn’ scenario face loopholes and hidden dangers in the design of the economic model. While the economic model lies at the heart of ‘X to Earn’, certain issues inherent in the design have already appeared in some early projects. 

For example, Axie’s inflation has gone up too quickly, resulting in a sharp drop in user revenue, a long payback period, and insufficient user retention motivation. Therefore, designing a long-term sustainable economic model and incentivizing user behavior through the bottom layer of the product and economic model will determine the success of ‘X to Earn’ in the market.

Regardless of the scenario or ecosystem, Huobi defines a successful project as one that can continuously produce applications with an excellent user experience and economic model, while building applications from a long-term life cycle point of view. This will ensure that users can remain engaged in its development to achieve a win-win situation – not unlike making money in your slumber, while helping to improve the world’s sleep quality and health. 

More details can be found in this Huobi Research Institute report