Telegram has had a troublesome few weeks. The messaging app’s founder, Pavel Durov, was arrested in late August and later launched on a €5 million bail in France, charged with working an organization complicit in distributing baby sexual abuse materials and facilitating drug trafficking and arranged fraud. Predictably, that crashed the value of the community’s cryptocurrency, Toncoin, by a 3rd.
However final Wednesday, within the ritzy Dosan-daero a part of Seoul, you may see no indicators of gloom within the lengthy line of individuals ready to get into a celebration hosted by TON, the blockchain that runs on Telegram. Certainly, the group of builders, entrepreneurs, traders, and different gamers from the blockchain ecosystem was within the temper to have fun: Just a few hours earlier, TON had introduced at Korea Blockchain Week that transactions on the blockchain had crossed the 1 billion mark.
Unexpectedly, Durov’s high-profile arrest has proved to be one thing of a boon for Telegram. Downloads of the app spiked quickly after the arrest, and it appears to have improved metrics on TON as nicely.
“Last week, TON hit all-time highs for active users and number of transactions during what, let’s be honest, is probably one of the worst weeks ever in news for TON,” Jack Sales space, co-founder of TON Society, which manages the TON neighborhood, mentioned throughout a convention at Korea Blockchain Week.
An advanced relationship
In concept, Durov’s standing shouldn’t have a fabric affect on TON. Telegram and TON Basis, which develops the blockchain, declare to be two impartial entities. However issues are extra difficult in actuality.
Durov began TON along with his brother Nikolai Durov beneath Telegram, however the messaging app needed to abandon the blockchain after the U.S. Securities and Change Fee sued Telegram for conducting a large unregistered preliminary coin providing. The app has since tried to distance itself from TON — no less than by separating its company construction.
In the meantime, a bunch of open supply builders and blockchain fans based The Open Community Basis, or TON Basis, to proceed creating the blockchain. Since then, TON has spawned a number of entities to assist its fast-growing operations, together with TON Society and The Open Platform, or TOP, which created the TON-based crypto pockets that runs on Telegram.
And to deal with considerations that the app’s disproportionate holding of Toncoin may compromise the decentralized nature of the community, Durov in February introduced plans to “limit Telegram’s share of TON at ≈10% of the supply.”
Nonetheless, the truth that individuals panic-sold Toncoin speaks to the notion that TON and Telegram are intently associated and considerably interdependent. An individual who recognized himself as Minho informed me at Korea Blockchain Week that he purchased extra TON since Durov’s arrest within the hopes that “prices will rebound following his release.”
Operationally, Telegram’s ambition of changing into a brilliant app like WeChat additionally relies upon closely on the success of TON. To draw third-party builders, Telegram wants not solely a correct tech stack, but in addition a strong funds community to assist in-app commerce. Solely, as an alternative of utilizing a fiat system, it chooses cryptocurrency.
“When you’re tying your ecosystem to the success of the Telegram platform, then obviously when that comes into question, people start to doubt what could happen,” Sales space informed me. Nonetheless, he harassed that TON being a blockchain community offers it a stage of independence that may let it survive with out Telegram.
“At the end of the day, TON’s ecosystem is just using Telegram as a front-end experience. The app works on the website, too, so even in the most horrible event that Telegram is shut down, TON will still be available to run,” he mentioned.
Optimism galore
A billion transactions appears like an enormous quantity, however how huge is TON actually? It’s tough to check on-chain exercise, as decentralized networks are sometimes tracked by completely different events and measured by completely different metrics. However to present you a tough concept: Day by day transactions on TON stood at 14.6 million on September 10 — that’s about 40% of the “non-vote” transactions on Solana, a extra established blockchain that’s at the moment the fifth-largest by market cap. Toncoin, by market cap, stands at tenth place.
Nonetheless, the full worth locked on TON is barely $408 million, about 8% of Solana’s present value of $4.77 billion, in response to DefiLlama.
These numbers are according to Sales space’s remarks that TON’s present growth is pushed by a handful of viral “tap-to-earn” video games that reward customers with in-game belongings for merely clicking on a button, and gamers commerce these belongings on exchanges the place they’re accepted. Solana, alternatively, attracts way more capital due to its vibrant and far more assorted decentralized finance (DeFi) ecosystem.
One such TON-based sport known as Hamster Kombat, the place individuals role-play as crypto change CEOs, has amassed 250 million month-to-month energetic customers, in response to Sales space. That quantity is spectacular, nevertheless it needs to be taken with a grain of salt, for the reason that “tap-to-earn” mechanism used right here is kind of menial by fashionable online game requirements and raises legitimate questions on such video games’ longevity.
However for TON, and Telegram by extension, the worth of clicker video games lies of their potential to carry customers to web3 with only a few faucets (and preserve them there with a monetary incentive), Sales space mentioned throughout his speech. And it needs to be famous that enjoying web3 video games requires customers to leap many hoops within the first place — they need to obtain an app, arrange a crypto pockets, and preserve prolonged pockets passkeys secure — so something that makes issues simpler is prone to be favored.
That’s to not say that studios aren’t attempting to construct extra subtle titles for video games for TON. One such title, known as Catizen, lets gamers handle and optimize a colony of cats and has attracted 30 million month-to-month customers, over 2 million of whom are energetic on the blockchain, Tim Wong, chairman at Catizen Basis, informed TechCrunch. In lower than six months, the sport has racked up income of $21 million.
“Most web3 games acquire users without generating any in-game revenues,” Wong informed me. “The mini-game ecosystem is already very established on WeChat, and it’s just starting on Telegram. We believe humans’ need for high-quality gameplay and their desire to spend on entertainment are universal.”
Toncoin will not be going to the moon anytime quickly given the costs towards Durov, or how usually Telegram is introduced up in relation to unhealthy information. However as is commonly the case with crypto initiatives, there’s a good quantity of fervor and optimism on show right here. Denmark-based Roy Chen, who has developed a console-inspired title, HypeSaints, that runs on TON, identified that the foremost affect of Durov’s arrest has been on Toncoin’s costs fairly than the ecosystem itself.
“After all, the potential for crypto mass adoption through TON is huge, thanks to Telegram’s 950 million users,” he mentioned.
