Cryptocurrency is a relatively independent emerging technology that poses unique challenges for its widespread adoption. While blockchain projects promise to disrupt various established tech businesses, they need to build thriving communities of active users who have shifted their activities from established platforms to the world of cryptocurrencies. This is one of the most difficult challenges for blockchain projects because established technologies are already functioning well. Furthermore, there are currently thousands of blockchain projects, many of which are similar to each other and compete for the same attention and users. The majority of these projects are essentially “a technological concept trying to build a community from scratch”.
As a leading cryptocurrency communication platform, Telegram is making progress towards reaching 1 billion active users. Telegram’s versatility, security, and speed make it the preferred platform for cryptocurrency users. It enables seamless communication between individuals and teams. Telegram plays an important role in large-scale community building for the industry, providing tools for interaction with the audience, spreading information, and fostering a sense of belonging. It may be one of the best tools for cryptocurrency projects to build communities.
Telegram’s large user base and open API provide an unparalleled opportunity for cryptocurrency projects to integrate their products into an existing and vibrant community, which already has a huge user base in the cryptocurrency field. Recognizing this potential, TON stands out for its strategic fit with Telegram. However, there are also indications that other blockchain ecosystems will further integrate into Telegram.
TON has recently gained widespread attention and performed well in the cryptocurrency market since it was announced as Telegram’s “official Web3 infrastructure” at the TOKEN2049 event in Singapore in September 2023. At this event, Telegram and the TON Foundation announced TON Space, a new self-hosted wallet directly integrated into the official Telegram wallet, which is included in the settings and attachment menus for all non-US users.
TON Space is a game-changing product. While some may think it’s just Telegram adding a self-hosted wallet, the broader view is that Telegram has actually become a self-hosted wallet with nearly 1 billion users, seamlessly connecting users to numerous cryptocurrency applications within the platform and allowing communication between individuals or groups on the platform without leaving it. No other wallet offers this user experience. Most wallets lack direct application integration or social features beyond simple transactions, requiring users to go through cumbersome login processes between different browser-based applications, severely limiting usability. Telegram’s all-in-one experience is crucial for widespread adoption. Imagine if Instagram or X required you to log into a separate browser application just to send messages or comment on a friend’s post, or if you had to use different browser applications to attach files from cloud storage to emails.
The reintegration between Telegram and TON has attracted the attention of well-known venture capital firms, with Pantera Capital making its largest investment ever in TON, and other companies expressing recent interest. Unlike most blockchain projects that struggle to build new communities, TON’s deep integration with Telegram positions it as “a community integrating blockchain”, as pointed out in Pantera’s investment letter, “which makes it much easier”.
TON: The Spotify of the Cryptocurrency World
The recent integration of TON within Telegram reminds me of the collaboration and integration between Spotify and Facebook in 2011, which was a significant moment for the music streaming industry. The integration of Spotify with Facebook allowed users to directly share their listening habits and playlists on the massive social media platform, greatly enhancing Spotify’s visibility and usage. Within just four days, Spotify gained one million new users associated with Facebook. Within six weeks, Facebook-associated Spotify users shared over 1.5 billion listening activities through Facebook’s Open Graph, which allows developers to integrate their applications into social media platforms. The rest is history.
Similarly, the integration of TON with Telegram allows TON developers to integrate their applications into Telegram’s massive social network, making it easier for users to discover and use TON’s applications and services. Just as Spotify leveraged Facebook’s social graph to build a community around music sharing, TON leverages Telegram to build a community around value transfer.
Since TON was recognized by Telegram, it has experienced stable growth. Recently, the total value locked (TVL) in TON smart contracts has exceeded $1 billion, growing by two orders of magnitude compared to before the activity.
The number of daily active wallets in TON continues to reach new highs.
The number of TON token holders and trading volume shows a strong upward trend.
While there are limitations to comparing through analogy, there are notable similarities between Facebook and Spotify, as well as Telegram and TON. In the third quarter of 2011, when Facebook integrated Spotify into its platform, Facebook had approximately 800 million users, while Spotify had 2 million paid subscribers. Less than a year later, Spotify’s paid subscriber count increased to over 4 million. Similarly, when Telegram integrated TON in the third quarter of 2023, Telegram had approximately 800 million users, while TON had around 100,000 monthly active wallets. Less than a year later, TON’s monthly active wallets grew to around 5.5 million.
Although TON’s growth in active users is on a different scale compared to Spotify, it is important to note that directly comparing Spotify’s subscriber count from a decade ago to the current active TON wallets is inaccurate. What is important is that the adoption of new technology has seen significant growth after integration into a large social network.
Considering that TON has only touched a small portion of Telegram’s user base so far, it is reasonable to expect its growth to continue as technology improves and use cases expand.
Beyond TON: Cryptocurrencies on Telegram
While Telegram has officially recognized and provided exclusive perks to TON on its platform, they are likely to remain separate entities due to legal issues. This is good news for other blockchain projects as Telegram maintains the free and open nature of its API for developers, promoting healthy competition and innovation.
When discussing TON and Telegram, it is important to consider the integration of other ecosystems into Telegram. Specifically, NEAR has emerged as a strong presence, quietly taking action and establishing a powerful presence on Telegram.
The most notable example is NEAR’s self-hosted HERE wallet and its lightweight Telegram implementation, HOT wallet, launched in early February. HOT wallet focuses on user engagement and streamlining the process of accessing the NEAR ecosystem through Telegram, as a response to NEAR for the Telegram TON wallet.
Creating a new NEAR account with HOT wallet is as simple as opening the Telegram app, tapping the screen a few times to generate a readable NEAR address, which is automatically assigned to your Telegram username (e.g., blockhiro.tg).
To increase user engagement, HOT wallet incorporates gamification strategies from the popular Notcoin app on TON, which was launched a month ago and attracted millions of users in the first week. Similar to Notcoin, HOT wallet allows users to mine their native tokens directly within the application through a fun game that combines social features, tasks, and upgrades.
Within 10 days of its launch, over 1 million Telegram users created NEAR accounts on HOT wallet. Since its launch, it has consistently ranked first on DappRadar.
In the first quarter, HOT wallet had an average of about 370,000 daily users, accounting for nearly 30% of NEAR’s daily active addresses. So far, the average daily active users for the second quarter have increased to about 500,000.
NEAR’s success on Telegram raises a question: Will TON continue to be the *sole* Web3 infrastructure for Telegram, or will it become one of the *multiple* Web3 infrastructures? While TON has received attention, NEAR and other potential blockchain projects should not be overlooked. In the coming months and years, I will closely monitor the dynamics of other blockchain ecosystems.
tApp (Cryptocurrency Applications on Telegram)
Recent improvements in user experience (UX) in cryptocurrency applications (referred to as “tApp”) on Telegram, from monotonous proxy page-style trading bots to full-fledged applications, pave the way for the rise of more highly engaging mining games and other tApps. Notcoin and HOT wallet are just the beginning. There are now many “mining+” tApps popular on multiple chains, attracting millions of players by offering simple and fun ways to play and earn. Here are some examples:
The user growth of these seemingly simple applications is extraordinary! For example, Hamster Kombat reached 100 million users in less than three months, placing it between ChatGPT and TikTok in terms of user acquisition speed. Rough estimates suggest that within a few months of the application’s launch, at least 10% of Telegram users tried the game, showcasing Telegram’s strong influence in Web3 user acquisition (user retention is another matter).
As the tApp category evolves, there are indications that they are branching out to multiple chains (e.g., MemeFi, Blum) and are no longer just imitations of Notcoin (e.g., AVACOIN, PixelTap). Some associate this category with meme coins because Notcoin’s memetic nature sparked it all, but I disagree. In some ways, current tApps and meme coins are similar in emphasizing convenience and fun, which is different from the serious technical terms we often see in the crypto space. However, unlike meme coins, tApps offer full functionality such as games and tasks, attracting actual usage from hundreds of millions of potential crypto-ready users already on Telegram or willing to join Telegram.
While cryptocurrency integration on Telegram started on a smaller scale with these seemingly simple applications, now is the time for them to develop into more complex platforms that rival other mobile applications. New tApps can combine and integrate gaming, social, and other engagement mechanisms, providing a richer user experience for cryptocurrency users and newcomers.
tApps across multiple blockchain ecosystems beyond TON will further solidify Telegram’s position in the wider crypto industry and strengthen existing connections between various crypto communities and Telegram. If these applications can not only leverage Telegram’s existing user base but also attract new users and developers, it may incentivize Telegram to provide more support for additional chains. This can be achieved by offering broader API access, higher server-side rate limits, or extended availability in settings and menus.
In conclusion, to achieve widespread adoption, we should consider Telegram in the broader context of the digital asset space, information security, and globalization, going beyond TON or any specific blockchain protocol. Telegram has become a global communication giant with widespread penetration in North America, Latin America, Asia, and Europe. Its massive user base, combined with innovative features at the forefront of information security and technology adoption, makes Telegram the best platform to bridge the gap between the crypto island and the mainland. Just as Facebook in the 2010s gave rise to Spotify and the music streaming industry, Telegram is the right product to accelerate blockchain adoption and normalize on-chain value transfer in the 2020s.
When discussing the barriers to cryptocurrency adoption at scale, the most common argument I hear is user experience (UX). Many believe that poor user experience is the main obstacle to widespread cryptocurrency adoption. However, I no longer think that’s the case. The rapid growth of Telegram Wallet, Here Wallet, and tApps like Notcoin and Hamster Kombat shows that the cryptocurrency user experience is essentially ready for mainstream use. If it wasn’t, these applications wouldn’t be able to attract millions of users within days. I believe the real bottleneck lies in the lack of integration between isolated blockchain projects and larger social networks. Imagine what would happen if these games were launched as standalone applications outside of Telegram.
Just as streaming technology revolutionized the way we consume audio and visual content by making it more accessible and convenient than ever before, the goal of blockchain projects should be to achieve the same effect for value transfer. This won’t happen in isolation. It will happen on platforms like Telegram, where blockchain applications can make value transfer more accessible and convenient than anywhere else for individuals, groups, and applications.
