INTRODUCTION

 

We at Pantera Capital are thrilled to announce our latest investment in TON, a Layer 1 network originally designed by Telegram and continued by the open source community.  We believe TON has the capacity to introduce crypto to the masses because it is used extensively within the Telegram network. Telegram has over 900 million monthly active users on its future-facing, fast, and secure messaging platform that is used for personal and group communications, large-scale community building, content sharing, and more.

 

By leveraging Telegram’s vast user base and seamless UX with the vibrancy of TON’s emerging ecosystem, we believe TON has the potential to become one of the largest crypto networks.

 

COMBINING WEB3’S ETHOS WITH MASSIVE DISTRIBUTION

 

Among the world’s leading messengers, Telegram stands out because its platform not only embodies much of crypto’s ethos, but has significant distribution. Telegram regularly outpaces its closest alternative, Signal, by 10x the amount of monthly downloads, garnering over 36.7 million in January of this year.

 

 

What about the other top messengers? Telegram is the only major platform that is free of regulatory hurdles to incorporate Web3 for an open blockchain network. While Messenger attempted to incorporate crypto payments with Libra, they ultimately faced regulatory hurdles from the U.S that led to a complete shutdown. WeChat has attempted to integrate CBDC payments of digital yuan, but the system is limited in scope and builders don’t have the ability to create permissionless applications. 

 

We believe Telegram is well positioned to bring crypto to the world because of its shared Web3 ethos and large distribution.

 

A SCALABLE PLATFORM BUILT FOR HUNDREDS OF MILLIONS

 

The Open Network (TON) is a blockchain initiative developed by Telegram, designed to leverage the messaging app’s extensive user base to create a decentralized network capable of supporting a diverse range of applications. TON features a multi-component ecosystem, which includes TON Blockchain, TON Storage, TON DNS, and TON Services – all integrated to function seamlessly together.

 

The backbone of this system, the TON Blockchain, is built for high performance and scalability, processing transactions quickly thanks to its dynamic sharding mechanism. This architecture ensures the network can handle millions of transactions per second and scales efficiently as user numbers grow, making it ideal for developers aiming to launch applications for hundreds of millions of users without compromising speed or security.

 

TON’s dynamic sharding enables a scalable network for millions of users.

 

EASY ONBOARDING

 

Onboarding users to use crypto applications is usually difficult. A new user needs to write down a 24-word passkey and store it somewhere safe. But what if you forget your password? How do you send or receive money to another user? Copying and pasting a public key may not be the best experience.

Telegram simplifies many complexities with Top.co’s Wallet in Telegram, which allows users to seamlessly connect to mini apps. Users can easily buy, sell, or manage tokens and NFTs all within a single interface, accessible directly through the Telegram settings and personal chats.

 

Wallet in Telegram features both custodial and self-custodial management based on TON, allowing all users to enjoy an easy onboarding experience while giving experienced users the option to have full control over their keys. With TON’s self-custody wallet, users don’t need to remember their seed phrase; instead, they can simply use Telegram and their email as backup.

 

 

Top.co’s Wallet in Telegram has 15 million users and counting

THE ERA OF CRYPTO MINI APPS

 

TON’s burgeoning ecosystem leverages Telegram’s innovative design and substantial user base. Over 360 million users engage monthly with what Telegram refers to as “Mini Apps”, which include chatbots and mini-games. With TON, we envision that integrating crypto into these “Mini Apps” will significantly enhance the user experience for these hundreds of millions of users. There are more than 300 projects on TON, the majority of which built mini-apps on Telegram which are accessible via the Telegram Apps Center.

 

Earlier this year, we observed how memecoin trading tools like BonkBot generated tens of millions of dollars in revenue through Telegram’s user interface. TON-based applications, such as StormTrade, now enable users to trade perpetuals, cryptocurrencies, stocks, and equities using the same interface. StormTrade facilitates over $10 million in trading volume daily, and we believe that similar TON-native Telegram bots will become the preferred user experience for many traders.

 

Telegram serves as a foundation for viral social and gaming applications. Early experimental Telegram games like Pixels and Fanzee Battles have attracted millions of users within days, demonstrating the platform’s vast potential for user engagement. Catizen is a cat-themed minigame platform built on TON that now has over 4 million users, of which over 700k users play daily. Notcoin, a social app built on TON where users compete to mine a digital currency, has rapidly onboarded over 30 million users—one of the fastest crypto adoption events ever recorded. 

TON Foundation recently announced their incentive program which will reward development of successful TON applications. We believe this will catalyze the creation of exciting new crypto mini apps that have the potential to onboard the masses.

 

UNLOCKING NEW WAYS TO EARN

 

TON is unlocking numerous ways for the Telegram community to monetize, share, and grow their businesses. As a decentralized marketplace on the TON network, Fragment offers a platform where users can trade collectibles such as virtual phone numbers and custom Telegram usernames. Fragment has already facilitated over $350 million in sales of custom usernames and virtual phone numbers. This is just the start. In the near future, Telegram stickers, of which 730 billion have been sent, could be transformed into NFTs. These NFTs would then be available for purchase and sale through the TON blockchain.

 

Telegram is taking a significant step forward by integrating revenue sharing with content creators and channel owners through its Fragment platform powered on TON blockchain. This move marks a shift from traditional social media models by directly allowing these creators to earn from ad revenues on their channels. This approach not only rewards creators for their content but also fosters a closer relationship between the platform and its users, promoting a fairer distribution of financial benefits within the digital ecosystem.

 

NATIVE STABLECOIN PAYMENTS

 

On April 19th, 2024, Tether announced the deployment of its stablecoin, USDt, on the TON blockchain and in Wallet in Telegram. This development represents a significant advancement for the crypto industry, as it allows hundreds of millions of users to seamlessly send and receive stablecoins through the Telegram platform, making payments as easy as using Venmo or Apple Cash.

 

The TON network’s scalability allows for a fixed fee of ~$0.10 for transactions between two users – that is 66% cheaper than other crypto payment platforms. Additionally, built-in on-ramps and off-ramps, including bank transfers and exchanges, are being made available to further facilitate access and use.

 

Stablecoin Payments on TON

 

CONCLUSION

 

We believe the TON network is still in its early stages, and we are excited to witness the adoption of its ecosystem and new features by the Telegram user base. 

 

At its core, Telegram embodies the ethos of crypto: an open, free network accessible to all. With TON, Telegram achieves a symbiotic relationship where scalable smart contract functionality and a robust payments network enable groundbreaking capabilities that were unattainable in the Web2 environment. Given its vast user base, scalable infrastructure, a thriving ecosystem of mini apps, and native stablecoin transactions, TON taps into the potential of a network with 900 million active, engaged users.

 

At Pantera Capital, we are thrilled about this investment and are eager to support the future builders within the TON ecosystem. If you are developing on TON and share our enthusiasm, please don’t hesitate to reach out.