Telegram has had a troublesome 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 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.
But 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. Indeed, 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 properly.
“Last week, TON hit all-time highs for energetic customers and variety of transactions throughout what, let’s be sincere, might be one of many worst weeks ever in information for TON,” Jack Booth, co-founder of TON Society, which manages the TON neighborhood, stated throughout a convention at Korea Blockchain Week.
A sophisticated relationship
In idea, Durov’s standing shouldn’t have a cloth impression on TON. Telegram and TON Foundation, which develops the blockchain, declare to be two unbiased entities. But 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 Exchange Commission sued Telegram for conducting an enormous unregistered preliminary coin providing. The app has since tried to distance itself from TON — at the very least by separating its company construction.
Meanwhile, a gaggle of open-source builders and blockchain lovers based The Open Network Foundation, or TON Foundation, to proceed creating 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 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 availability.”
Still, the truth that folks panic-sold Toincoin speaks to the notion that TON and Telegram are carefully 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 turning into a super-app like WeChat additionally relies upon closely on the success of TON. To appeal to third-party builders, Telegram wants not solely a correct tech stack, it requires a strong funds community to help in-app commerce, too. Only, as an alternative of utilizing a system that fiat system, it chooses cryptocurrency.
“When 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,” Booth advised me. Still, he pressured that TON being a blockchain community provides it a stage of independence that might let it survive with out Telegram.
“At the tip 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 seems like an enormous quantity, however how huge 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. But to offer you a tough concept: Daily 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 barely $408 million, about 8% of Solana’s present price of $4.77 billion, in keeping with DefiLama.
These numbers are consistent with Booth’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, however, attracts way more capital due to its vibrant and rather more diverse 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, in keeping with Booth. 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 kind of menial by fashionable online game requirements and raises legitimate questions on such video games’ longevity.
But 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 hold them there with a monetary incentive), Booth stated 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 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. 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 Foundation, 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 need to spend on leisure are common.”
Toncoin is probably not going to the moon anytime quickly given the costs towards Durov or how usually Telegram is introduced up in relation to dangerous information. But as is usually the case with crypto tasks, there’s a good quantity of fervor and optimism on show right here. Roy Chen, a recreation dev from Denmark who has developed the console-inspired title HypeSaints that runs on TON, identified that the key impression of Durov’s arrest has been on Toincoin’s costs reasonably than the ecosystem itself.
“After all, the potential for crypto mass adoption via TON is large, due to Telegram’s 950 million customers,” he stated.
