The Open Network (TON) has been gradually gaining prominence in the payment sector in the blockchain field due to its unique advantages and strong user base. As of July 21, 2024, more than 730 million USDT has been issued on the TON network, becoming an important driving force for the development of the TON payment ecosystem. Additionally, TON gaming platforms such as Notcoin, Hamster Kombat, and Catizen have achieved significant accomplishments, attracting 35 million, 230 million, and 25 million users respectively.
With the continuous maturity and expansion of the TON ecosystem, its application prospects in various fields such as DeFi, GameFi, and SocialFi are becoming more promising. The CGV research team analyzes the “ambition” of TON in the payment field and explores how it can utilize its advantages, overcome challenges, and achieve long-term development in the field of cryptocurrency management and DeFi.
One of TON’s unique advantages is its large user base on Telegram. According to Statista, as of April 2024, Telegram had 900 million monthly active users, ranking eighth in the global social networking list. In comparison, the public chain with the highest number of monthly active addresses, according to Token Terminal estimates, is Solana, with 14 million monthly active addresses, which is less than 2% of Telegram’s user base.
Telegram users are mainly distributed in developing countries such as Southeast Asia, Africa, and Latin America, in addition to its home countries of Russia and Ukraine, as well as the diverse population structure in the United States. Telegram has a large number of users, but their per capita income is relatively low, making Telegram more suitable for carrying out business related to traffic, rather than serving high net worth individuals.
Compared to other social networking projects, Telegram launched its own blockchain and strong integration with its social network at an early stage. In 2017, Telegram’s founders Pavel Durov and Nikolai Durov started developing a blockchain project called Telegram Open Network (TON) and planned to launch their native cryptocurrency Gram. In 2018, they raised approximately $1.7 billion through an ICO, but also drew the attention of the U.S. Securities and Exchange Commission (SEC). In 2020, due to regulatory issues, Telegram announced its withdrawal from the TON project and handed over the development work to the community, with the project being renamed “The Open Network” and the token name changed to Toncoin, and the ICO funds were refunded.
After several twists and turns, in 2023, Telegram officially announced TON blockchain as its preferred Web3 infrastructure and planned to integrate it into the Telegram App interface. In contrast, Facebook’s Libra (Diem) cryptocurrency network, after facing various setbacks and regulatory pressures for two and a half years, announced that it would no longer be launched.
Furthermore, Telegram’s privacy protection and unregulated nature make it more crypto-friendly and have also served as a platform for gray industries that cannot pass regulatory scrutiny. These gray industries were the early widespread use cases of cryptocurrencies, and as a result, Telegram has attracted a large number of crypto users.
Overall, the TON ecosystem has had a first-mover advantage in developing cryptocurrency thanks to its reliance on Telegram’s large user base.
In terms of monetizing traffic, TON has seen an explosion of off-chain games, particularly casual games, that attract users through economic incentives. Notcoin, for example, allows users to earn coins by simply tapping the screen, which can then be exchanged for Notcoin tokens. It has attracted over 35 million users and has been listed on Binance and OKX, with its market cap reaching nearly 3 billion. Hamster Kombat, another game on TON, provides various ways for players to earn rewards, such as purchasing/synthesizing cards, daily check-ins, social media tasks, and referrals, and has gained over 230 million registered users in less than four months. Catizen, a casual cat breeding game, has generated over 10 million dollars in revenue, with over 25 million players and 1.4 million on-chain users.
These games demonstrate the potential of the TON gaming projects and their ability to attract users. However, in the short term, the focus for TON’s gaming projects will likely shift from user traffic to conversion rates. This will require high-quality game design and a sophisticated monetization system to generate sustainable revenue and maintain long-term growth.
According to the TON official website, Mini Apps, GameFi, and DeFi are the key product types that the official wants to onboard. The TON Foundation’s Grants program also mentions support for these categories and provides examples of each category. For example, Telegram Mini Apps can be used for social web3 use cases, such as creator economics, e-commerce, utility tools with embedded web3 elements, community and brand management, onboarding platforms for TON wallets, DeFi lending protocols, derivatives DEXs, DEXs with weighted pools like Balancer.fi, yield aggregators, liquidity layers, and restaking. These indicate the development focus of TON’s official channels.
Looking at the short-term future, TON’s rise in the payment sector is not accidental but a result of its strong user base, technological advantages, and ecosystem strategy. Although it still faces challenges such as regulatory issues and user trust, TON has shown strong growth potential with its innovative payment solutions and integration with Telegram’s ecosystem.
In the future, with the landing of more high-quality applications and the conversion of user traffic, TON is expected to occupy a place in the global payment market and become an important force in the blockchain payment field.
