Telegram has had a troublesome 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 little one 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 group of builders, entrepreneurs, traders and different gamers from the blockchain ecosystem was in temper to have a good time: 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.
“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 neighborhood, stated throughout a convention at Korea Blockchain Week.
An advanced relationship
In idea, Durov’s standing shouldn’t have a fabric impression 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 together 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 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 lovers 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 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 “restrict Telegram’s share of TON at ≈10% of the provision.”
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 “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 help in-app commerce, too. Solely, as a substitute of utilizing a fiat system, it chooses cryptocurrency.
“While you’re tying your ecosystem to the success of the Telegram platform, then clearly when that comes into query, individuals begin to doubt what may occur,” Sales space informed me. Nonetheless, he careworn that TON being a blockchain community provides it a stage of independence that might 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 obtainable to run,” he stated.
Optimism galore
A billion transactions feels like a giant quantity, however how massive is TON actually? It’s tough to match on-chain exercise, as decentralized networks are sometimes tracked by completely different events and measured by completely different metrics. However to provide 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 present the fifth-largest by market cap. Toncoin, by market cap, stands at tenth place.
Nonetheless, the entire worth locked on TON is just $408 million, about 8% of Solana’s present value of $4.77 billion, in keeping with DefiLama.
These numbers are consistent 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, then again, attracts much more capital due to its vibrant and far more diversified decentralized finance (DeFi) ecosystem.
One such TON-based recreation referred to as Hamster Kombat, the place individuals roleplay as crypto change CEOs, has amassed 250 million month-to-month lively customers, in keeping with Sales space. That quantity is spectacular, nevertheless 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 only a few faucets (and maintain them there with a monetary incentive), Sales space stated throughout his speech. And it ought 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 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 attempting to construct extra subtle titles for video games for TON. One such title referred to 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, informed 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 informed 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 might not be 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 main impression of Durov’s arrest has been on Toincoin’s costs moderately than the ecosystem itself.
“In any case, the potential for crypto mass adoption by TON is big, due to Telegram’s 950 million customers,” he stated.
