Telegram has had a tough few weeks currently. The messaging app's founder, Pavel Durov, was arrested in late August and later launched on €5 million bail in France, accused of working an organization concerned within the distribution of kid sexual abuse materials and facilitating drug trafficking and arranged crime. frauds. As anticipated, the worth of the community cryptocurrency Toncoin dropped by a 3rd.
However final Wednesday in Seoul's posh Dosan-daero district, you noticed no signal of gloom within the lengthy line of individuals ready for a celebration hosted by TON, the blockchain that runs on Telegram. The gang of builders, entrepreneurs, buyers and different gamers from the blockchain ecosystem was certainly in a celebratory temper: A number of hours earlier, TON introduced at Korea Blockchain Week that blockchain transactions had crossed the 1 billion mark.
Unexpectedly, Durov's arrest turned out to be one thing of a blessing for Telegram. The app's downloads spiked quickly after the arrest and it appears to have improved the metrics by a TON as nicely.
“Final week, TON hit all-time highs for energetic customers and transactions throughout what, let's be trustworthy, might be one of many worst weeks ever for TON to be within the information,” Jack Sales space, co-founder of the 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 cloth influence on TON. Telegram and the TON Basis, which develops the blockchain, declare to be two unbiased entities. However in actuality, issues are extra difficult.
Durov based TON together with his brother Nikolai Durov inside Telegram, however the messaging app needed to go away the blockchain after the US Securities and Alternate Fee sued Telegram for conducting a large unregistered preliminary coin providing. The app has since tried to distance itself from TON – a minimum of by separating its company construction.
In the meantime, a gaggle of open-source builders and blockchain fanatics have established The Open Community Basis, or TON Basis, to proceed blockchain improvement. Since then, TON has created a number of entities to help its quickly rising operations, together with the TON Society and The Open Platform, or TOP, which created a TON-based cryptocurrency pockets that runs on Telegram.
And to deal with considerations that apps' disproportionate holdings of Toncoin may threaten the community's decentralized nature, Durov introduced plans in February to “restrict Telegram's share of TON to ≈10% of the provision.”
Nonetheless, the truth that folks have been promoting Toincoin in a panic reveals that TON and Telegram are intently associated and depending on one another to some extent. An individual who recognized himself as Minho instructed me at Korea Blockchain Week that he had purchased one other TON since Durov's arrest, hoping that “costs will rise once more after his launch.”
Operationally, Telegram's ambition to change into an excellent app like WeChat additionally relies upon closely on the success of TON. With the intention to entice third-party builders, Telegram not solely wants a correct know-how stack, but additionally requires a stable fee community to help in-app commerce. Solely as an alternative of utilizing a fiat system, they select cryptocurrency.
“While you mix your ecosystem with the success of the Telegram platform, then after all, when it comes into play, folks begin to query what may occur,” Sales space instructed me. Nonetheless, he emphasised that TON as a blockchain community provides it a stage of independence that might enable it to outlive with out Telegram.
“In spite of everything, the TON ecosystem solely makes use of Telegram as a front-end expertise. The app additionally works on the web site, so even within the worst case the place Telegram is shut down, TON will nonetheless be obtainable to run,” he stated.
Plenty of optimism
A billion transactions appears like a giant quantity, however how large is a TON actually? It’s tough to match on-chain exercise as a result of decentralized networks are sometimes monitored by totally different events and measured by totally different metrics. However to present you an concept: Every day transactions on TON have been 14.6 million as of September 10 – that's about 40% of the “voting-free” transactions on Solana, the extra established blockchain, which is presently the fifth largest by market capitalization. Toncoin is ranked tenth by market capitalization.
Nonetheless, the whole worth locked up on TON is barely $408 million, which is about 8% of Solana's present worth of $4.77 billion, in line with DefiLam.
These numbers are in keeping with Sales space's feedback that the present TON growth is fueled by a handful of viral tap-to-earn video games that reward customers with sport property for the press of a button, and gamers commerce these property on exchanges the place they’re accepted . Solana, however, attracts rather more capital on account of its vibrant and rather more various decentralized finance (DeFi) ecosystem.
One such TON-based sport referred to as Hamster Kombat, the place folks play the function of CEOs of crypto exchanges, has amassed 250 million month-to-month energetic customers, in line with Sales space. This quantity is spectacular, however ought to be taken with a grain of salt, because the tap-to-earning mechanism used right here is kind of subpar by fashionable online game requirements and raises professional questions concerning the longevity of such video games.
However for TON, and by extension Telegram, the worth of click on video games lies of their means to carry customers to the web3 with just some clicks (and hold them there with a monetary incentive), Sales space stated throughout his speech. And it ought to be famous that gaming on Internet 3 requires customers to leap via loads of hoops within the first place—they must obtain an app, arrange a crypto pockets, and hold lengthy pockets entry keys 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 a TON of extra refined gaming titles. One such title, referred to as Catizen, permits gamers to handle and optimize a colony of cats and has attracted 30 million month-to-month customers, greater than 2 million of whom are energetic on the blockchain, Tim Wong, chairman of the Catizen Basis, instructed fromcrypto. In lower than six months, the sport grossed $21 million.
“Most web3 video games get customers with out producing any in-game income,” Wong instructed me. “The mini-game ecosystem is already very established on WeChat and is simply getting began on Telegram. We imagine that folks's want for high-quality video games and their want to spend for leisure is common.”
Toncoin will not be going to the moon any time quickly given the allegations towards Durov or how typically Telegram comes up with unhealthy information. However as is the case with crypto-projects, a great deal of enthusiasm and optimism might be seen right here as nicely. Denmark's Roy Chen, who developed the console-inspired title HypeSaints, which runs on TON, identified that the primary influence of Duro's arrest was on Toincoin costs reasonably than the ecosystem itself.
“In spite of everything, the potential for mass cryptocurrency adoption via TON is large, due to Telegram's 950 million customers,” he stated.
