Telegram has had a troublesome few weeks these days. 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 youngster sexual abuse materials, and facilitating drug trafficking and arranged fraud. Predictably, that crashed the worth of the community’s cryptocurrency, Toncoin, by a 3rd.
However final Wednesday, within the ritzy Dosan-daero a part of Seoul, you would 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 gang of builders, entrepreneurs, buyers and different gamers from the blockchain ecosystem was in temper to rejoice: 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 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 principle, Durov’s standing shouldn’t have a cloth impression 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 underneath 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 — at the very least by separating its company construction.
In the meantime, a bunch of open-source builders and blockchain fanatics 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 might 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 Toincoin speaks to the notion that TON and Telegram are carefully 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 turning 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 strong funds community to assist in-app commerce, too. 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 provides it a degree of independence that will 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 a giant quantity, however how massive is TON actually? It’s difficult to match 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 presently the fifth-largest by market cap. Toncoin, by market cap, stands at tenth place.
Nonetheless, the whole worth locked on TON is simply $408 million, about 8% of Solana’s present value of $4.77 billion, in response to 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 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 because of its vibrant and rather more different decentralized finance (DeFi) ecosystem.
One such TON-based recreation known as Hamster Kombat, the place individuals roleplay as crypto trade CEOs, has amassed 250 million month-to-month energetic customers, in response to Sales space. That quantity is spectacular, however it ought to be taken with a grain of salt, because the “tap-to-earn” mechanism used right here is kind 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 means to carry customers to web3 with just some faucets (and maintain them there with a monetary incentive), Sales space mentioned throughout his speech. And it ought to be famous that taking part in web3 video games requires customers to leap many hoops within the first place — they must obtain an app, arrange a crypto pockets, and maintain prolonged pockets passkeys secure — so something that makes issues simpler is more likely 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 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 fees towards 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 key impression of Durov’s arrest has been on Toincoin’s costs somewhat 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.
