It souds cool and possible to work but I want to remind you that people happily used fake gps apps in even pokemon go to show themselves walking/running. Getting rewards. How can this app block this especially on android, I don't know.
I would like to point out that while that's true, they are easily mitigated by banning the use of rooted phones etc. Even then, the prevalence of cheaters will not mean much if it's a manageable small percentage and might not have too much of a downside (putting fitness bands on a dog to get steps etc). My concern however, is token economics (assuming the op is thinking of buying LYM). Since free coins are given out, I'm not sure how this token will be in demand. Yes, perhaps with gym memberships or other services Lympo offers, but it's a bit murky.
It's still the first of its kind though and this has peaked my interest.