Cryptoverse: TON begins on Telegram

By Elizabeth Howcroft

(Reuters) – A coin referred to as TON has jumped in worth in latest months as traders wager that its integration with messenger service Telegram might deliver the cryptocurrency to the app's estimated 900 million customers.

Telegram backed TON in September final 12 months, saying the blockchain and related token could be its “official Web3 infrastructure.” Earlier this month, TON stated tokens is also issued on its blockchain, permitting Telegram customers to ship one another stablecoins inside the app.

The TON token surged, reaching as excessive as $7.63 on April 11, in comparison with round $2.21 a 12 months earlier, based on CoinGecko knowledge.

With $18.3 billion in circulation, it’s the tenth largest cryptocurrency after memecoin.

The prospect of a “tremendous app” or “every little thing app” that mixes funds and purchasing with social media or messaging companies has lengthy been a holy grail for traders seeking to China's WeChat for inspiration. Within the crypto world, that is generally referred to as “SocialFi”, which stands for Social Finance.

Such concepts led to Elon Musk's acquisition of Twitter in 2022, now X. Binance, which helped finance the buyout, stated it will discover how cryptocurrencies may very well be used on the platform. Britain's Revolut, in the meantime, took a special tack, beginning with a monetary app and including social options.

Whereas TON's enchantment is a part of a broader curiosity in tremendous apps, it has additionally been helped by the general resurgence of altcoins, stated Thomas Peuch, CEO of digital asset hedge fund Indigo.

“TON has outperformed lots of its friends as a result of lots of people are shopping for the challenge, as a result of alt curiosity has returned and due to Telegram's assist,” he stated, including that Indigo traded the TON token.

TON, brief for “The Open Community”, has a cryptocurrency product inside Telegram with over 6 million month-to-month customers.

SCALE FAILURE

Efforts to introduce crypto-payments to social media have to this point failed on a big scale. Fb (NASDAQ: ), now Meta, has ended its “Libra” cryptocurrency challenge after fierce opposition from regulators world wide who feared it might injury monetary stability and erode management over financial coverage.

“The latest foray into crypto funds via Telegram represents a brand new use case for the app, however adoption and adoption are nonetheless of their infancy,” stated PitchBook senior analyst Robert Le, who stated the enterprise capital elevated its stake in SocialFi.

“The principle problem is to vary the notion of customers in non-Asian markets, the place messaging apps are perceived largely purely for communication somewhat than as multi-functional platforms.”

Such integrations current “regulatory, technical and safety challenges”, stated Ram Gopal, a professor at Warwick Enterprise College.

“Regulators could also be involved about how these platforms adjust to present monetary rules,” he stated.

“Guaranteeing that customers are shielded from fraud, scams and potential losses resulting from cryptocurrency fluctuations could be a serious concern for regulators,” he added.

HISTORY OF THE TON

Telegram Messenger created the TON blockchain in 2018 and raised $1.7 billion by promoting the associated cryptocurrency. Nonetheless, the challenge was hit by allegations from the US Securities and Alternate Fee, which stated the token sale violated federal securities legal guidelines.

As a part of a settlement with the SEC in 2020, Telegram agreed to finish improvement of TON. She neither admitted nor denied the SEC's allegations.

A gaggle of impartial builders then continued engaged on the challenge, selecting up the place Telegram left off, based on a historical past on the TON web site.

TON says it’s decentralized, based mostly on an open supply code base, with no single controlling authority. Behind it’s a non-profit basis registered in Zug, Switzerland.

A TON spokesperson stated that Telegram and TON had been distinctly separate entities.

The president of the TON Basis is Steve Yun, based on the group's web site. Andrew Rogovoz, former CEO of Russian social community VK, is a founding member of the inspiration, based on his LinkedIn profile. He appeared on stage with Telegram co-founder Pavel Durov and Tether CEO Paolo Ardoin at a convention in Dubai the place the partnership to situation a stablecoin on the TON blockchain was introduced.