Fighting the Sedentary Apocalypse: How Sweat Economy is Revolutionizing Fitness Through Blockchain

In our "Behind the Startup" series, we're excited to bring you a conversation with Oleg Fomenko, co-founder of Sweat Economy. From being an avid runner and mountain climber to being the visionary behind an innovative health and fitness startup, Fomenko shares his journey and the origin story of Sweat Economy.

Read on to explore the way Fomenko's Sweat Economy is transforming health norms and societal structures through cryptocurrency incentives.

Revamping Health & Fitness: Sweat Economy's Radical Step in Combating Global Obesity

Ishan Pandey: Hi Oleg, great to have you here for our "Behind the Startup" series. Can you share with us a little about your personal journey and what led you to Sweat Economy?

Oleg Fomenko: I’d always prided myself on my fitness. I used to run semi-professionally and managed to climb 4 out of the “7 Summits” in my thirties, but like many others, found less and less time for it as I grew older. My kids started arriving and my entrepreneurial career took off. When it got to the stage where I could hardly do a simple jog without breaking into a sweat, I knew I had to get in shape.

Around that time, I was watching WALL-E with my son, and in the imaginary future, there were blobby people so out of shape that they were being wheeled around by forklifts. With horror, I could foresee this dystopia becoming a reality with the way that technology trends and modern society are conspiring to make us more sedentary. And you know how kids watch movies–on repeat–so on the 50th time in addition to a resolution of “losing the DVD” I also decided that I had to do something about this terrible future everyone was predicting.

Over recent decades, obesity has become a bigger global health challenge than malnutrition. It’s one of the leading causes of premature death–costing taxpayers, insurance holders, and health providers many billions of dollars. I wanted to use technology to address that. That’s when I, along with Egor and Anton, my co-founders, came up with the basic idea of rewarding people for taking steps.

We started to build our centralized Web2 app Sweatcoin back in 2015. We always wanted to put it on-chain, but it was too expensive and too laborious to fork the only blockchain in existence back then–Bitcoin. So we decided to go centralized and jump back onto blockchain later when technology matured. Once we’d had the idea and had grasped the potential of Web3 and decentralization to create a true unit of value for movement – it was a matter of waiting to see which blockchains could fulfill the mass-consumer transaction volume we anticipated.

There weren’t any blockchain protocols that could deliver this at an affordable cost back then. When we began, there were only really Bitcoin and Ethereum operating at scale, but without the efficiencies we required. We actually met with Vitalik around 2016, and he advised that we should wait, build the product, then move over.

Since then, we have been building consumer behavior through a loyalty point model in the Sweatcoin app and garnered 130M+ users. Over the last few years, we researched the capacities and infrastructure of many blockchains. At last, we have chosen to build on the NEAR Blockchain and launched our Web3 DApp Sweat Wallet in September 2022, which was the largest Web3 onboarding in history, introducing 130M+ Sweatcoin users to Sweat Wallet. We have 6.6M+ active users on Sweat Wallet to date and are still counting.

Sweat Economy is the umbrella brand with the mission to make the world more physically active by rewarding physical activity through both Sweatcoin and $SWEAT the token. Note that Web3 and crypto for us is not the means and the end in itself –we see this wonderful technology as a way to tokenize your physical activity and make it exchangeable and tradable, therefore pushing the nascent Movement Economy forward.

Think of it like the Attention Economy, the $7TN phenomenon humanity built over the last 200 years, but for physical activity. You’ll be able to exchange the value of your physical activity with your doctor, your insurer, your employer, your family members, etc. Ultimately, we believe that countries thinking deep enough will start accepting part of your taxes in $SWEAT because this means that you put less pressure on the healthcare system, will live longer, and therefore will have a higher economic impact on your country of residence.

Ishan Pandey: Could you provide a brief overview of the recent governance vote? What prompted this vote and how do you see it shaping the future of the Sweat Economy?

Oleg Fomenko: Recently, we let our community decide the fate of the 2B+ idle $SWEAT tokens locked in inactive users' accounts. Those inactive users have not installed and activated their Sweat Wallet since our Token Generation Event in Sep 2022. Since then, we have made more than a dozen attempts to re-engage them without any response. As these tokens are as good as gone, we left it up to the community to decide if they want to leave them as they are or whether they want to repurpose them to create value for the whole community.

We organized this vote within the Sweat Wallet app for users to seamlessly cast their vote without any technological barriers. The vote showcased remarkable participation, with 355,506 votes recorded from June 7th, 2023, at 1 PM UTC to June 14th, 2023, at 1 PM UTC. The results of the vote revealed that 83% of voters were in favor of reclaiming the idle tokens and transferring them back to treasury for further consideration of their usage.

In early July, we are launching the follow-up governance vote to determine what to do with the 2,492,673,109.55 reclaimed $SWEAT tokens. Stay tuned!

As a community-driven project, we continue to listen to different voices in our community. In order to give power to our users and help shape the future of Sweat Economy, we will organize votes regularly. During these votes, users also get to learn and experience the values of Web3. Sweat Wallet will grow together with the community and continue to create values for movement and make the world more physically active. All votes we run are based on the ideas and proposals community members put forward to us on our Discord server, where more than 100,000 community members are active. If you would like to influence the course of our history please pop in here and join the channel #governance-proposals.

Ishan Pandey: In light of the recent partnership with Near, can you delve into the plan to incentivize users to learn within their wallet app? Could you also elaborate on the decision to give away $100K to users through this partnership and the expected outcomes?

Oleg Fomenko: The partnership with NEAR gave 100,000 users the experience of holding Tether on Near and engaging with many more dApps active in the Near ecosystem. It was a great way for the crypto-curious to tap into the world of crypto, Web3, and NEAR. With the ability to earn tokens for learning and taking quizzes, users now have more reasons to stay engaged within the Sweat Wallet app and the NEAR ecosystem. As our partnership with Near and other players in the Near ecosystem evolves, you will see more functionality and existing features launching in our app. Stay tuned–one of them is literally a week or two away.

The partnership ran from May 23-31, Sweat Wallet users were rewarded with 1 USDT by completing the “What are Stablecoins?” lesson and an interactive quiz. In total, 100,000 USDT was given out as rewards in this initiative. In just 9 Days:

• 245,048+ users started the lesson
• 218,789 users completed the lesson
• 218,789 130,068 users completed the lesson & quiz 100,000+ users were rewarded with 1 USDT (by completing the lesson and passing the quiz within 6 attempts)

Ishan Pandey: Could you speak to the role of 'Learn & Earn' programs in the growth and development of the Sweat Economy? How are these initiatives ensuring accessibility and benefits for all members?

Oleg Fomenko: With the majority of our community being new to blockchain and crypto, we launched ‘Learn & Earn’ to give users the opportunity to acquire invaluable knowledge of how Web3 works and get rewarded for it.

There is no initial investment or knowledge required to use Sweat Wallet. It is completely free, and users do not have to understand what secret phrases, NFT and the nuances in Web3 are in order to create a wallet and get access to the Web3 space.

Users simply walk with the Sweatcoin app, record their steps and they will be rewarded with $SWEAT tokens in the Sweat Wallet app. Now, with Learn & Earn, they can read Web3 content in the Sweat Wallet and be rewarded with even more $SWEAT or $USDT, depending on the lessons.

This feature will prepare tens of millions of people for Web3 and will introduce them to a carefully selected number of projects with the best UX and the best terms.

Ishan Pandey: Furthermore, how does the Sweat Economy maintain its growth and resilience during bearish cryptocurrency market conditions?

Oleg Fomenko: Unlike many Web3 projects, we started a very long time ago by building a profitable Web2 business and foundation, we’ve already gone through peaks and valleys. We know how to use bear market conditions to build. Because we have already been profitable for years, we are in a very good financial position to continue hiring the best of the best people while other projects scale back their ambitions in the bear market. There is absolutely no doubt in our minds that we will be one of those projects that will thrive in the next bull run.

We are in the process of bringing two very senior players into the team– a Marketing Director and Business Development/Ecosystem Director. Please get in touch with me if you are a degen tired of chasing yield and want to use blockchain to make the world a better place. Recruiters, please do not bother.

Ishan Pandey: How do decentralized governance models contribute to the Sweat Economy, particularly in the context of the recent governance vote? How might this decentralization impact the trajectory of the Sweat Economy moving forward?

Oleg Fomenko: We’ve set the record with the largest governance vote in the Web3 history in the recent vote on 2B+ $SWEAT idle tokens reallocation.

We believe in giving voices to our users. Our governance model is founded on a one-tokenholder-equals-one-vote basis. It is a notable and groundbreaking change in the industry, as most projects give power to token holders in proportion to their holdings.

This also encourages users to participate more in the decision-making process for Sweat Economy’s development, as the results will not be swayed by whales.

Our vision in the mid-long term is to create a Sweat Economy DAO. This is likely to be the first DAO to have more than 100 million members. It excites us to be working on the mechanisms and the processes of how 100M people can run a self-governing organization.

Ishan Pandey: One of the intriguing aspects of the Sweat Economy is its emphasis on health via walking, incentivized through cryptocurrency rewards. How do you perceive this approach transforming societal health norms and behaviors? Could you explore the potential ripple effects this could have on public health and our broader societal structures?

Oleg Fomenko: The reason why we all do not exercise enough is not lack of motivation, discipline, time or money. The reason is that nature did not build us to be active. It built us to survive. And this means that we optimize for preserving calories rather than spending them. There is only one way to “trick” nature into making us more active–instant gratification–and this is precisely what Move to Earn does for us. By turning steps into rewards, Sweatcoin and Sweat Wallet are built to help people subconsciously change their routines.

A study carried out by the University of Warwick has found that Sweatcoin, which incentivizes users to exercise by offering cash rewards, can result in users increasing physical activity by up to 20 per cent.

As with many things in life, the solution to the problem of sedentary behavior is not found in those New Year’s resolutions of trying to go to a gym three times a week. We know what happens to those– by the early Feb all of those people are back to their old routines. In order to deliver long-term sustained change, one needs to bring in subtle changes into everyday life. And this is what our subtle intervention motivates people to do.

Ishan Pandey: Given the recent disputes between the U.S. Securities and Exchange Commission (SEC) and major cryptocurrency platforms like Coinbase and Binance, how do you see these conflicts influencing the broader cryptocurrency landscape? Could you discuss any potential repercussions for regulatory frameworks, investor trust, and the future growth of the crypto sector?

Oleg Fomenko: This is a very complex topic that has no right or wrong answers. As we all know, the American legal system is precedent-based, so until some of these court cases play out nobody will know for sure what works.

However, there are several points that we can make here that clearly separate our project from many others … and even most other Move-2-Earn projects out there:

1. Our mission and goal – We are about making the world more physically active using blockchain tech, and Sweat Wallet and SWEAT token are just the tools to create that motivation to put one foot in front of another more times per day.

   
   

   We are not about TVL or other value metrics that you typically see founders of DeFi protocols and dApps focusing on. In addition, our Sweatcoin community in the US has been really pushing us hard to bring in Sweat Wallet and SWEAT to them as they feel alienated and isolated from the rest of the world. And let's face it: the US suffers from some of the highest obesity rates in the world, so making Americans more active is a good thing that they themselves demand from us, so making americans more active is clearly a good thing that they themselves demand from us.

2. Users earn SWEAT by walking– as a project, we are rewarding people with SWEAT for the steps they take. There is no need to buy an NFT to earn or to invest into the token before you can participate.

   
   

3. Sweat Economy’s token - SWEAT - is YOUR physical activity tokenized and this is why it is seen as valuable by our users.

   
   

Ishan Pandey: With blockchain technology increasingly being adopted across industries, what trends do you foresee in the coming years, particularly within the health sector?

Oleg Fomenko: This is a brilliant question. I see a whole raft of changes that will come. Some of them will have to happen if we want it or not and some I am welcoming with my open arms.

1. As the industry scales and becomes bigger we all collectively will have to clean up our act. How many times do I hear about projects being scammed and projects not reporting this to law enforcement and to forensics? This type of behavior encourages crooks and thieves to operate in our domain without punishment and it damages the image of the whole industry. We need to weed these crooks out from our ranks all together.

   
   

2. Focus of the industry will shift increasingly towards mass-market - millions of users with smaller balances instead of chasing liquidity of a finite number of “whales.” Why am I confident of this shift? Because all the economics in blockchain are linked to activity, not TVL or transaction value. It costs you the same amount of ETH to transfer 1 dollar or 1,000,000,000 dollars in one transaction, so those protocols and projects that understand this will win.

   
   

   Those that will continue chasing a “vanity metric” of TVL will find it hard to scale. In general, how can the growth come when all the whales who can play are already in, and the growth will come from attracting hundreds of millions of retail and institutional investors, of course. Many projects think of the latter, very few about the former, and this is where the opportunity lies.

3. Regulation will come if we want or not and we should welcome it. Since we are still not able to self-regulate and do not weed out crooks and thieves ourselves we have to expect that someone will and it is a good thing for the whole industry. After all, the second biggest concern for the average person curious about crypto is “every day I read about hacks and scams. How do I know that I will not fall the victim of them?” We need to sort this out asap and regulation, and thoughtful regulation will help.

   
   

4. Shift of focus to better UX and user-driven development. Like Web2 in the late 90s, Web3 will have to shift its focus onto making products easier to use and easier to understand. New users are not going to bother with all the complexity we have created for ourselves over the years.

   
   

   Let's not let this complexity hold us back!