Telegram has had a tricky few weeks currently. The messaging app’s founder, Pavel Durov, was arrested in late August and later launched on a €5 million bail in France, charged with operating 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, buyers and different gamers from the blockchain ecosystem was in temper to have fun: A couple of 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 effectively.
“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 impression on TON. Telegram and TON Basis, which develops the blockchain, declare to be two unbiased entities. However issues are extra difficult in actuality.
Durov began TON together with his brother Nikolai Durov underneath Telegram, however the messaging app needed to abandon the blockchain after the U.S. Securities and Trade Fee sued Telegram for conducting an enormous unregistered preliminary coin providing. The app has since tried to distance itself from TON — at the least by separating its company construction.
In the meantime, a gaggle of open-source builders and blockchain fans based The Open Community Basis, or TON Basis, to proceed growing the blockchain. Since then, TON has spawned a number of entities to help 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 handle issues 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 folks panic-sold Toincoin speaks to the notion that TON and Telegram are intently associated and considerably interdependent. An individual who recognized himself as Minho advised 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 super-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, it requires a stable funds community to help in-app commerce, too. Solely, as a substitute 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 advised me. Nonetheless, he pressured that TON being a blockchain community offers it a degree 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 seems like an enormous quantity, however how large is TON actually? It’s difficult to check on-chain exercise, as decentralized networks are sometimes tracked by totally different events and measured by totally different metrics. However to provide you a tough concept: Every 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 present the fifth-largest by market cap. Toncoin, by market cap, stands at tenth place.
Nonetheless, the full worth locked on TON is simply $408 million, about 8% of Solana’s present value of $4.77 billion, based on DefiLama.
These numbers are consistent with Sales space’s remarks that TON’s present increase 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, then again, attracts way more capital because of its vibrant and far more assorted decentralized finance (DeFi) ecosystem.
One such TON-based recreation known as Hamster Kombat, the place folks roleplay as crypto trade CEOs, has amassed 250 million month-to-month energetic customers, based on Sales space. That quantity is spectacular, but it surely needs to be taken with a grain of salt, because the “tap-to-earn” mechanism used right here is sort of menial by trendy 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 capacity to deliver customers to web3 with only a few faucets (and hold them there with a monetary incentive), Sales space mentioned throughout his speech. And it needs to be famous that taking part in web3 video games requires customers to leap many hoops within the first place — they should obtain an app, arrange a crypto pockets, and hold prolonged pockets passkeys protected — so something that makes issues simpler is more likely to be favored.
That’s to not say that studios aren’t attempting to construct extra refined 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, advised 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 advised 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 is probably not going to the moon anytime quickly given the costs in opposition to Durov, or how typically Telegram is introduced up in relation to dangerous information. However as is usually the case with crypto tasks, 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 impression of Durov’s arrest has been on Toincoin’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.