Telegram has had a tricky few weeks recently. 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 little one 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 could possibly 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: 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 properly.
“Final week, TON hit all-time highs for lively customers and variety of transactions throughout what, let’s be sincere, might be one of many worst weeks ever in information for TON,” Jack Sales space, co-founder of TON Society, which manages the TON group, mentioned throughout a convention at Korea Blockchain Week.
An advanced relationship
In concept, Durov’s standing shouldn’t have a cloth influence on TON. Telegram and TON Basis, which develops the blockchain, declare to be two unbiased entities. However issues are extra sophisticated in actuality.
Durov began TON together with his brother Nikolai Durov beneath Telegram, however the messaging app needed to abandon the blockchain after the U.S. Securities and Alternate Fee sued Telegram for conducting a large unregistered preliminary coin providing. The app has since tried to distance itself from TON — not less than by separating its company construction.
In the meantime, a gaggle of open-source builders and blockchain lovers 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 handle considerations that the app’s disproportionate holding of Toncoin might compromise the decentralized nature of the community, Durov in February introduced plans to “restrict Telegram’s share of TON at ≈10% of the provision.”
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 “costs will rebound following his launch.”
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 assist in-app commerce, too. Solely, as a substitute of utilizing a fiat system, it chooses cryptocurrency.
“Whenever you’re tying your ecosystem to the success of the Telegram platform, then clearly when that comes into query, folks begin to doubt what might occur,” Sales space advised me. Nonetheless, he pressured that TON being a blockchain community offers it a stage of independence that will let it survive with out Telegram.
“On the finish of the day, TON’s ecosystem is simply utilizing Telegram as a front-end expertise. The app works on the web site, too, so even in probably the most horrible occasion that Telegram is shut down, TON will nonetheless be out there to run,” he mentioned.
Optimism galore
A billion transactions appears like a giant quantity, however how large is TON actually? It’s difficult 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: Each 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 overall worth locked on TON is barely $408 million, about 8% of Solana’s present value of $4.77 billion, in keeping with DefiLama.
These numbers are in keeping with 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 property for merely clicking on a button, and gamers commerce these property on exchanges the place they’re accepted. Solana, then again, attracts way more capital due to its vibrant and rather more different decentralized finance (DeFi) ecosystem.
One such TON-based recreation known as Hamster Kombat, the place folks roleplay as crypto alternate CEOs, has amassed 250 million month-to-month lively customers, in keeping with Sales space. That quantity is spectacular, but it surely must be taken with a grain of salt, for the reason that “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 carry customers to web3 with just some faucets (and hold them there with a monetary incentive), Sales space mentioned throughout his speech. And it must be famous that enjoying web3 video games requires customers to leap many hoops within the first place — they must obtain an app, arrange a crypto pockets, and hold prolonged pockets passkeys protected — so something that makes issues simpler is prone to be favored.
That’s to not say that studios aren’t making an attempt 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 lively 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 video games purchase customers with out producing any in-game revenues,” Wong advised me. “The mini-game ecosystem is already very established on WeChat, and it’s simply beginning on Telegram. We consider people’ want for high-quality gameplay and their want to spend on leisure are common.”
Toncoin will not be going to the moon anytime quickly given the costs towards Durov, or how typically Telegram is introduced up in relation to dangerous 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 key influence of Durov’s arrest has been on Toincoin’s costs somewhat than the ecosystem itself.
“In any case, the potential for crypto mass adoption via TON is large, due to Telegram’s 950 million customers,” he mentioned.