In the X Space: "TON to the left, SOLANA to the right: Unlocking opportunities for TON and SOLANA" initiated by the Mid-Levels Club, the organizer invited more than 30 industry experts, senior investors and project founders to discuss TON and opportunities in the Solana ecosystem.
The second session of this event mainly discussed TON's infrastructure construction, potential outbreak tracks and investment opportunities. The following content is condensed based on the discussion of X Space:
Moonlight, Nimble Network community leader/KOL (moderator): There is news that TON plans to launch EVM L2, and there are also projects exploring Solana’s L2 solution. Do Solana and TON need to build the second layer?
John TON Head of APAC
There has been a lot of news recently, and many people have come to ask us this question. We have actually had some intense discussions internally, especially with our core development team. So far, our conclusion is that TON has not seen a real scenario that is particularly suitable for L2, so we will not officially build an L2. But we do not rule out the possibility that if there is indeed a demand for L2 in the future, or it has real business logic, or it can technically achieve some project goals, we do not rule out this possibility in the future.
If you have read our white paper carefully, you should also know that there is a section in our white paper called working chain. Because our entire sharding architecture is a dynamic unlimited sharding architecture, theoretically we can convert it to a multi-chain network , and such an architecture exists. But so far there has not been any additional working chain, and to create an additional working chain requires all our nodes to vote for approval, so there is no such thing today. There are different institutions and investors with different backgrounds, and they may invest in some so-called TON L2 projects, but frankly speaking, we have not seen an L2 that can be officially recognized by us so far.
I encourage everyone to do all kinds of exploration and encourage all kinds of communication with our officials. But we can honestly say that many L2 concepts are due to the fact that Ethereum’s L1 was not good at that time, especially TPS, so many L2 solutions were developed. What follows is the concept of the entire capital market. If I build an L2, there is the possibility of listing the currency and listing it on the stock exchange, and then investors will come to invest. A lot of it ends up being about making money. In fact, we still adhere to the attitude that if there is a real business logic or technical demand, it is not to build momentum for capital, or to make money from casual projects for the project side. This is our basic attitude.
Charles Liu (Collinstar Capital Director)
As John said just now, they may not necessarily officially support an EVM L2. However, I think there is still this kind of path dependency at the user level. If everyone builds L2 of EVM, then it may be necessary to build one on TON as well . I think this matter can be viewed from two directions, one is market demand and the other is capital demand. Therefore, I think from these two directions, the market is more likely to promote this matter. If users have this kind of path dependence and feel that it is complete if they have L2, then I think there will definitely be better EVM L2 on TON in the future. However, I think it still needs to be verified whether this L2 can be done well, or whether it is really needed.
Zac (TonGifts Co-founder)
We are from the TonGifts team. We developed a simple red envelope application based on Telegram in the TON ecosystem, which supports the direct distribution of multiple TON chain assets, including data analysis and user diversion services. We have cooperated with more than 100 project parties, including exchanges, DeFi, games, etc. RONA is also cooperating with us today and may have experienced our services.
Regarding the L2 issue, I would like to share my personal opinion. Because we are working on the application layer and serve many application developers, we have noticed some practical problems. First of all, the technical development of TON itself is still relatively difficult , including smart contract development and asset distribution. For example, token transfers may be difficult, and there may be various situations that need to be handled on the chain. This is the first point. Secondly, we have also noticed that many EVM projects that were previously on BSC or other chains want to cooperate with us quickly and enter the TON ecosystem quickly, but technology transfer actually faces greater resistance. Third, we provide asset services based on Telegram, not just TON chain assets. We have noticed that for assets like BUSD and some projects that need to airdrop and distribute their own tokens, we have not yet seen a particularly good solution in the area of cross-chain bridges.
So from our perspective, whether it is the application layer or our many partners, we all hope to have a better solution, which may not necessarily be L2, but we hope to have a fast-implementing technical support and application access as soon as possible. Serve . Although we know that the official may not necessarily do this, I think there are still opportunities for third parties in this area, including ourselves, who are also considering the inheritance of some multi-chain assets.
Andy (Legend of Arcadia Executive Product & CEO)
The product of Legend of Arcadia is a multi-chain game, which is a placement card game and the gameplay is very simple. In the mobile game, you only need to put five characters together and click, and you can complete a game in about 30 seconds, which is very fast to play.
From the perspective of our project, whether it is L1 or L2, there is essentially not much difference to us . Because for us, the most important thing is our users . So even if the efficiency is improved, even if L2 exists, for our project side, we don't care. What we care about is where the project is, where the users are, how we find users, and what projects are being built in the ecosystem. So if a chain has enough ecological support, enough projects, and enough people active, that is the deciding factor for us to choose a chain. Back to the ecological level, whether it is TON or Solana, I think the core issue is whether you want to be a public chain or an L2. I think this is not the most important thing. I hope they can provide some infrastructure so that some projects and apps can be built directly on it. This will be more interesting. For example, if the TON chain suddenly turned into a red envelope chain, I think everyone would be very happy.
YZ Rona Co-founder
RONA is a hardware network similar to Solana for gaming and DePIN. In response to this question, we have actually been paying attention to the TON ecosystem since last year, because our team has been rooted in the Web3 game industry for many years. The Tap to Earn logic of this wave of TON games is different from the logic of the previous round of GameFi , mainly because based on Telegram’s own huge user base, this low-threshold, social-oriented gameplay can attract a large number of users . How many of these users can be converted into new on-chain users after passing the game is also a point that users, exchanges, and VCs are looking forward to. Headline projects such as Hamster and Catizen may have their tokens exchanged in the next two to three months, and we can intuitively see user conversions. I think TON’s ecological dividend will enter the second stage, that is, for these new users who have been converted, they have begun to use TON wallets, and these users who are already familiar with the entire process of TON will take their next step in the TON ecosystem and Web3 What will be the participation of.
What I am more optimistic about is the social attributes of TON itself, and I am very optimistic about the direction of SocialFi. Secondly, PayFi was also mentioned in the first session. Telegram has many similarities with WeChat in this regard. I think PayFi and similar SocialFi will also have great prospects here. Regarding the characteristics of TON's own chain, although its research and development based on smart contracts will be more difficult than Solana and EVM, because the characteristics and language of its own chain may be difficult for ordinary small project teams, its own upper limit includes Fundamentals such as concurrency and performance have their own characteristics. I think some large-scale enterprise-level decentralized applications may be more suitable for deployment on TON.
Moonlight, Nimble Network community leader/KOL (moderator): In addition to mini games, which tracks in the TON ecosystem are you most optimistic about? Payment, social, NFT, others?
John TON APAC person in charge
said that this TON track will mirror the development process of WeChat mini programs back then. I don’t know how many people know about the players in WeChat’s track since Web2 started in 2016 and 2017, or even when there was H5 before mini programs. At that time, many listed companies appeared in the WeChat ecosystem, such as Pinduoduo. Without WeChat, Pinduoduo would not be possible, not to mention that it has become one of the largest e-commerce companies in China today. There are also companies like Shuidichi, which were later listed on Nasdaq. I believe everyone has seen and used these companies on WeChat. Others may be less well-known, but are also large in vertical areas. For example, e-commerce companies gathered together. They launched fission on WeChat and sold goods, and finally went public on Nasdaq. Although the results were not good, it was still a phenomenal product at the time. Unbeknownst to him, its rivals such as Global Catcher and Beidian are all entrepreneurial models. There is also Weipaitang, which was originally just an auction tool for art and games in a WeChat group, and later became the largest art and game e-commerce platform in China. There is also Group Solitaire, which was originally a tool for receiving orders in the group, and later became a community fresh food group buying e-commerce platform. There are also photo album sharing tools for the elderly such as Meipian, which later became a social platform for pictures for the elderly. There is also Xiao Nian Gao, which is similar to Douyin Kuaishou on WeChat and has more than 100 million users. Therefore, in the Web2 era, there are too many imaginations being realized in this ecosystem.
I personally think that the TON ecosystem is, on the one hand, a revolution in Web3, using TON as a payment and asset issuance financial network; on the other hand, it is also a revolution in the Telegram social ecosystem, where many new species will grow. Combined, the power it unleashes should be unprecedentedly powerful, and many new species that we have never seen before will appear. I even think there is another factor that everyone may overlook. Telegram is the best application scenario for large AI models. Today, there are a large number of project teams in our ecosystem that focus on AI. Maybe it attracted 100,000 or 200,000 users in the first month, and instead of relying on official promotion, it invested in its own AI robot.
Therefore, when AI, Web3 and the unmonetized social ecology are combined, the most unimaginable new and huge species on the planet may be created, just like Pinduoduo was born. I was working as an e-commerce company in a large factory. When Pinduoduo appeared, all e-commerce platforms were not optimistic about it. At that time, it was believed that China’s e-commerce war was over and that the world was dominated by Alibaba and JD.com. Who would have thought that in less than ten years, China’s largest e-commerce platform would become Pinduoduo. TON's gameplay is a bit like Alipay. I remember that when Alipay first came out, traditional financial institutions were not optimistic about it, thinking that the quality of Alipay's users was not high. But when Alipay launched the financial product Yu'e Bao, it quickly became China's largest financial product. Jack Ma once said, "If the bank doesn't change, we will change the bank." So today I feel that all people in the traditional Crypto circle look at us just like traditional banks looked at Alipay back then. Without the baptism of the mobile Internet, most people would not understand the potential of this model.
China has a traditional strategy called rural areas surrounding cities. However, today’s rural areas are not Chinese. These rural areas are rural areas all over the world. As we all know, most of TG’s users are actually users from the third world, and there are no Chinese users. , there are also very few American users, and American users cannot use our wallet due to regulations. Therefore, users outside of China and the United States are growing wildly on Telegram, so this is another "rural area surrounding the city". Many people may not understand that this revolution has already been completed. A huge opportunity has come. Whoever comes in first, whoever is all in first, will make money. Projects such as Catizen and TON gifts were all things I personally contacted and talked about last year. I probably talked about two to three hundred projects last year, and only a few of them actually built them, but today all the projects that built them have made money. Maybe even if they didn't issue coins, they still made money. We even created the fourth business model in the currency circle. Some people also say that the first three business models are cults. For example, Bitcoin and Ethereum, the exchanges are all casinos, and they pump money in them. Or it’s just a dish. In fact, most of the projects in the currency circle this year are just a dish in my opinion. We are a low-level communication model, that is, ecological project parties may not even need to issue coins. They can earn a lot of money by earning handling fees, selling NFT, or purchasing virtual props. And even as far as I know, our leading Chinese projects like Catizen have been buying back investors. So frankly speaking, we are changing the rules of the game in the entire currency circle. We don’t think we are anyone’s opponent. We want to bring at least 1 billion Telegram users into this new world. Most of these users are not users of the cryptocurrency industry, or they understand blockchain, but may not have a cryptocurrency wallet. We want to bring them to the world of Web3. When they become Web3 users, they may choose to use various blockchain networks. Because each chain has its own strengths, and TON cannot be good at everything, I think we have a huge opportunity to bring new increments to project parties, L1, and exchanges.
If you ask me which tracks I am optimistic about, I think TON today is still in a state of untapped potential, and small games are just the tip of the iceberg. The mini-game track will also continue to develop. You see, after so many years since the WeChat mini program came out, there are still new games like this that can become popular. Mini games are not just simple clicks, but many people question how many real users there are in these games. This is indeed a problem, but both the official and third-party projects in the ecosystem are promoting some solutions to verify users, such as issuing SBT, doing on-chain data analysis, and even doing this kind of KYC. So this problem can be solved. You can look forward to three months from now. I believe there will be an explosion of species in our ecology. Today, a Chinese team showed me a stranger social project, which reminded me of what someone in WeChat said back then. It was a small program in WeChat, and eventually it became the leading stranger social platform in China.
Chris Lee (Merkle 3s & TKX Co-Founder):
I think in terms of the magnitude of TON, I am very optimistic about the two basic fields of payment and finance. Another point, I think the solution provider for TON diversion is also a relatively big opportunity. What I just talked about is a review of the history of the development of WeChat mini programs. In fact, there was another Hong Kong company that was doing traffic diversion at that time, and its market value reached 20 to 30 billion Hong Kong dollars. It was also a very successful mini program service provider, so I think these are all There is a chance.
But generally speaking, I think the biggest problem with TON now may be that TVL is not as good as current L2 solutions such as Arb and OP. TVL is still a relatively large and important indicator. Therefore, a better method is needed to increase TVL to achieve growth in the market value of ecological projects. This is a relatively important cycle.
Then the other one is DeFi. For every public chain DeFi three-piece package, Stable Coin, Dex and Landing are all important. Therefore, a relatively good Dex provides services such as micro-finance, deposit interest, merchant settlement, daily payment, and People Lending. This kind of service is likely to fill the gap in the payment market. I think this is something we can look forward to. .
The other one is of course SocialFi, including decentralized identity authentication. I think these three points are likely to form a positive flywheel for their future development. I also hope that TON actually has a mission to lead cryptocurrency to the mainstream.
Lewis (Chainbase CPO)
Regarding the combination of DePIN and Solana, from my perspective, there are many, many reasons for the DePIN project to choose Solana. One thing that can be added is that many DePIN projects will have specific needs or requirements for the number of devices. The number of devices may be hundreds, tens of thousands, or even millions, and these devices need to be connected to the entire DePIN network and generate transactions. What kind of network is needed to undertake them? The choice of Solana is actually a very natural or inevitable thing because it has a very high TPS, fast speed, and very low cost.
Also, I heard a guest mention Dimo, which is on the Polkadot network. Polkadot also has similar characteristics, so I think it is a very normal and natural thing for DePIN projects to be combined with public chains like Solana and Polkadot. Even if some of Ethereum's infrastructure is more complete, I think a similar DePIN project will happen on Ethereum. From the perspective of the project side, what kind of ecosystem the project side will choose to carry out their own projects may also have capital considerations. For example, many capitals in the United States may support Solana-based projects.
Another very important perspective is from the perspective of developers, what functions they can achieve through the toolkits in this ecosystem, and what kind of experience they can bring to users. Taken together, among the three Polkadot, Ethereum, and Solana, I think Solana is the best. So if I were a DePIN project owner, I would probably choose Solana. Therefore, from my perspective, Solana has a high probability of becoming mainstream for DePIN, and no other ecosystem will be able to surpass it in the short term.
Patrick (KOL)
We are the largest overseas asset allocation company in South China. We now have more than 1,300 employees, and our business volume this year is almost more than 8 billion US dollars. We are also looking for some opportunities to integrate with Web3.
I think restaking is a very important track, it is a very big trend, and if I look at it, this track is particularly suitable for the core circle of North America, big institutions like Delphi and Pantera, these big institutions do this Restaking layout. Once the Restaking project comes out, it can drive the most basic three-piece DeFi set: lending and Dex. So I think Restaking is a very important track.
Andy (Legend of Arcadia Executive Product & CEO)
I think this goes back to an essential point, which is that we should think about how to utilize traffic before discussing the track, because traffic is the scarcest resource in Web3. If we look back at the development of the Internet cycle in the past 30 years, traffic has always been the scarcest resource, whether it is the early 1.0 era or the 2.0 era. So I think the first point of thinking is which track can make the most efficient use of traffic, amplify it, and maximize its use.
In fact, after filtering out, there are probably three areas left: social, advertising and payment. These three can attract traffic, because people always need to socialize and have a need for money. So anything to do with payments, traffic is very receptive and valuable. The same goes for the content track. From the perspective of our games, what we lack most when making Web3 games are users. If we can find an entrance with a large number of users and bring users in, this is the greatest value to the game. The same goes for social networking. You need to get to know more people and communicate with them.
So the three things just mentioned, as long as they can take advantage of traffic, are the biggest opportunities. As for our current doubts, do we have to go to TON to make small games on TG? But when working on the project, this is the biggest thinking problem we encountered, because the infrastructure on TON is indeed not mature enough, including the Tonsactor briefing mentioned, which is still at an early stage compared with other ecological wallets on the market. Many projects, including all TG projects that have been verified for a period of time, do not necessarily want to be listed on TON 100%. They use TG’s traffic. If I were to do this today, I would think about how to use TON if it is now Web3, what features it has, and how to use TV on TON, not just TG traffic. So for us, it's a dilemma, we don't have a good answer, it's a question that we've been thinking about.
Jewish Director Zhao (KOL)
I think in the Telegram ecosystem, everyone now basically regards Bot as an infrastructure product. Everyone basically uses a few commonly used Bots when fighting against earth dogs. I think Bots also have great potential in the future. Just like what Andy just said, now it seems that Telegram is Telegram, TON is TON, and TG’s bot has no particular relationship with the actual relationship with TON for the time being. But it is undeniable that Telegram’s bot itself can also generate good cash flow and provide many valuable services to everyone.
Regarding the
Collinstar Capital Director
project, let’s first talk about the opportunities in the entire track.We believe that the core areas are payment and gaming, which complement each other. Many people compare TON with the WeChat ecosystem. We believe that games are a source of traffic and can increase users’ retention time in the ecosystem. There are so many chains now, but there are still many opportunities in the gaming field. In addition, the cross-game market is also worthy of attention, because only with a better cross-game market can the liquidity of the entire ecosystem be high enough.
The second area is payments. With games, there is naturally an inflow and outflow of funds. In fact, for many project users in the TON ecosystem, their concept of wallets is still relatively vague, or the frequency of wallet use is relatively low. Therefore, we also see many centralized wallets undergoing user conversion, from centralized to decentralized optimization, and then to the path of exchanges. Therefore, this type of wallet is actually combined with the game track mentioned earlier. The key depends on which projects can succeed.
As for project recommendations, we have recently paid more attention to the Rona project. If we want to recommend a project, we will focus on Rona and have no other project recommendations for the time being.
Moonlight, Nimble Network community leader/KOL (moderator): From the perspective of the primary market, why do most VCs watch more and invest less in the TON ecosystem? Are large VCs suitable for investing in TON ecological projects?
Kevin Ren (CGV Co-founder)
CGV is a Crypto fund established at our headquarters in Tokyo. In fact, CGV and its predecessor funds have been engaged in such investments since 2017, and have successively invested in nearly two to three hundred projects. CGV has reorganized a new fund around 2022. In Japan, we are also relatively active and have a licensed stablecoin, which is one of the only stablecoins in Japan. We are also laying out more ecosystems, including licensed exchanges, etc., and are actively exploring and developing them. CGV is committed to discovering better projects from around the world and bringing them to the Japanese market. At the same time, we also explore outstanding communities and IP in Japan and provide them to our global projects.
We have just released a research report on TON. What we are talking about is that the ecology of TON is far more than just small games. What we focus on is TON’s payment track. We can see that TON relies on Telegram’s large ecosystem, and the first tipping point may be small games. As can be seen from TON's official website, Mini Apps is the first option, and of course there are other options at the back, such as DeFi, GameFi, etc. Mini Apps plus GameFi are actually mini games. Projects including NotCoin, Hamster, Catizen, etc. have actually ignited the entire TON ecosystem, allowing everyone to see more of the TON ecosystem. At least everyone will see that TON has traffic. We can see that NOT tokens and TON tokens have not completely followed the trend of Web3, and are relatively more out of the circle. This is also an interesting point.
We believe that more ecosystems will emerge in TON, and there is still time to lay out them. The two projects on Space today, the TON Gifts and RONA I saw, both combine two tracks of TON, one is small red envelope payment, and the other is TON plus game console, including TON mini-games and other related DePIN project. There will be many projects that combine traffic, but are also very interesting. We expect the main chain to do better in this regard. For example, to make payments, you need some DeFI scenarios. In this case, can you attract more BTC and Ethereum assets? In addition, the market value of USDT on TON is currently more than 700 million. Is it possible to further increase it? This is of course the point we are most looking forward to, because the upward space is huge. There is a USDT stablecoin volume of up to 60 billion US dollars on Tron, while it is only 700 million on TON. It is actually very convenient for us to use Telegram to transfer money, and at this point, the potential of TON may be stimulated perhaps by introducing stablecoins or related assets. Including payment points, payments and rewards, as well as some of the items just mentioned, will become very interesting. We will definitely continue to pay attention to TON’s gaming, payment, and DePIN ecosystem.
John TON APAC person in charge
Actually, I think this problem may have been a problem two weeks ago, but now most VCs should not be able to invest. It may actually be difficult for well-known funds like Sequoia to enter some leading projects. For projects like Catizen, if you are late, you will be late. Therefore, VCs are not right every time. Especially VCs that were particularly successful in the previous season will often have path dependencies in the next season.
And as I just said, in the past, Web2 investments could only be listed on Nasdaq or the Hong Kong Stock Exchange, but with Crypto, the threshold for its listing has become very low. It is actually a kind of democratization of listing. In fact, after a small game company like this became popular on WeChat in the past, it would be difficult for it to remain popular for a long time. So today you can see that there are a large number of small game companies on WeChat, but the companies with the largest number of users are not games, but trading platforms. Today, the capital market of Web3 Crypto is actually more suitable for this kind of small market value assets, especially this kind of small games, so I am still very optimistic about it. I think there will still be many new types of small games, but maybe its life span The cycle may not be that long, so it may be more valuable to invest in something with production and distribution capabilities behind it.
Let me reply again to the question raised by the previous guests in the previous round. First of all, TON will definitely not engage in pornography, gambling, or promoting pornography, gambling, or drugs. This is one of our values. We don’t need to rely on pornography, gambling and drugs to succeed. I also know that pornography, gambling and drugs are easy to succeed, but many and most L1s actually rely on this to succeed. But we still want to take a road that has not been taken before. You can do it, but we will definitely not promote it.
Then the second thing is that the binding between TG and TON is not so close. Because TON became independent after the SEC sued TG in 2020. So the interface we have in TG today, just like the WeChat payment interface, actually costs money to buy from TG every year. We are a business partnership, not a company, and have no legal entity connection. Therefore, when making bots and small programs in TG, you can use other links, no problem. We may just provide you with a solution. If you want to quickly create a wallet for users who have never used Web3, then we may allow every user to quickly do so without downloading any APP. Then you can have a wallet on the TON chain.
TON actually brings traffic to other ecosystems, even to other public chains. We also told the project team that you don’t have to use only the TON chain. We just said that you must use the TON chain first. If you want to use another chain, we have no objection. Even in the blockchain era, everyone talks about it. There is an opening. I personally think that the final evolution of the entire world in the next half year may become a different chain, and he will be good at some different fields. Perhaps TON will be the most suitable chain for the C-side. As mentioned before, TON chain development is still somewhat difficult. The reason for this difficulty is also very simple. It is because the TON chain has been designed to develop asynchronous programs in parallel from the first day. , it is similar to the concept of microservices used by many large platforms such as today's Web2 when high concurrent traffic is required. Therefore, its code is also determined by the development of smart contracts and the structure of its asynchronous multi-chip chain.
Of course, this thing does have its pros and cons. The good thing is that TON’s online TPS will be very, very high. We did an experiment on Alibaba Cloud in a laboratory environment last year, and the highest TPS can reach the order of 100,000. . Then at the end of last year, in the production environment, there were a number of projects working on our TON chain, which indeed crashed the TON chain for two days, but then we kept upgrading the equipment and doing more Slash Punishment, after that project today, the TON chain has actually never crashed again, so the TPS potential of our chain is actually very high.
Is it necessary to build a Layer 2? Our potential in L1 has not yet been fully explored. Is there any value in building an L2? Is the true value that great? So these issues are actually some of the difficult issues that everyone has discussed a lot on the TON chain today, and they are actually interconnected. Behind them, this connection actually guided the original design of the TON chain, which is closely related to Bitcoin. The chain is different. Its ultimate goal is to serve Telegram’s hundreds of millions of users. So you may not use the old way of thinking to look at this new problem. There is a saying that you can’t find the New World on the old map. Then I think we are the New World, and every time the New World comes out, the previous generation’s vested interests It may be difficult for stakeholders to understand quickly.
This cycle has happened to me at least two or three times in my career. I think the ecosystem in TON is still the same today. I still say the same thing. If you don’t understand it today, there’s nothing you can do about it. Those who understand it today and those who came last year have already made money. It's very down-to-earth, and it's all a Chinese team. The Chinese team is indeed very suitable for this ecosystem, because whether it is making small programs or applications, no one in the world can beat the Chinese. So the previous round was about Solana. How many Chinese teams in Solana have made money? I don’t know either except for those meme plates. So I can say that maybe the TON chain is an ecosystem that allows Chinese people to make more money.
Jewish Director Zhao (KOL)
There are actually quite a lot of VC investments in the TON ecology. As far as I know, some exchanges are actually very optimistic about the TON ecosystem. Even at that time, the exchanges did not fully agree with the whole story. From a VC perspective, TON’s private placement in 2017 allowed many VCs to already participate in or be aware of this project. Although it has been upgraded now, I think VCs were involved intermittently during the process.
After the launch of the TON mainnet, it still feels not as open as Ethereum or BTC. This also returns to the original question, why doesn't TON do things like L2? You will find that no strong foundation will do L2 because it is not necessary. L2 will only be done when the interest structure is dispersed, the number of currency holders is large, and the chip structure is dispersed. Ethereum and BTC have become L2 because different currency holders have different interests and need to use some form to delineate the competitive landscape. But TON itself is guided by a foundation, which is relatively very strong, and its development direction and strategy are also very clear, so there is no need for it to engage in L2.
Most good projects or excellent traffic acquisition are distributed downward by the foundation. The foundation also does not promote things such as pornography, gambling and drugs. This behavior has a strong value attribute. Under such circumstances, it is difficult to achieve the state of a hundred flowers blooming brought about by VC. Once VC enters, they will have their own ideology and capital attributes. But if there is a strong leadership or direction like the TON Foundation, there are not many places where VCs can get involved. TON itself may set up an ecological fund and invite other VCs to be LPs, and may get better deals. Instead of VCs acting as general financial investors and sourcing deals without direction in the market, it is better to cooperate directly, jointly establish funds, and serve as project incubators or accelerators. This method is more economical than looking for TON projects like a headless fly.
So from a VC perspective, cooperating with a strong foundation means grabbing an official spot. There are only a few official pits for public chains, including official Dex, lending, stablecoins, and possibly NFT exchanges, and Perdex for contract trading. Basically, these are the only ones. Once the official pit is occupied, it will be gone. After that, it is difficult to guide the traffic and then a second or third company will appear. Therefore, it feels a bit like a state-owned enterprise or a franchise. VC wants to enter the official pit. These official pit positions generally do not require VC money. VCs want to enter only if others give them opportunities, so they enter into a game relationship. I suggest that TON be an ecological fund and let VCs invest in it as LPs.
Warren Fang (ArkStream Capital Partner)
ArkStream Capital is a Crypto fund. We have primary market investment and liquidity strategies, which mainly invest in some original or cutting-edge innovations in the VC field. From 2020 to now, we have invested in more than 100 VC projects. Recently, we have paid special attention to the TON ecosystem. We started paying attention and research in October last year. In June this year, with the explosion of a series of applications and the influx of developers, we began more in-depth research and communication.
Regarding the reason why VCs watch more and invest less, we ourselves are like this, but as a guest mentioned just now, many institutions like us have missed out on projects like Catizen. It can only be said to be a review or review. From our previous exchanges, everyone’s previous concerns can be summarized into the following points:
The first is that everyone has previously been concerned about the certainty of the long-term ecological development of the TON public chain. On the one hand, due to the chip structure, the TON token itself has a high market value, but the chip distribution is not very transparent, and it is not listed on the top exchanges, such as Binance, so the selling pressure is relatively large.
The second is that the development language and infrastructure of the TON public chain are still incomplete, and progress is relatively slow. In October last year, we saw that this was often the case, which greatly hindered the entry of developers. This has led to the fact that despite the support of a platform like Telegram with 900 million users, these uncertainties will make many VCs relatively slow in making investment decisions after doing more data-based research. Insufficient liquidity on the chain is also a reason, including the lack of cross-chain bridges and insufficient transaction volume and activity of assets on the chain, which may lead to low asset valuations on TON. Of course, this situation has improved as the volume of USDT has increased. But if you look at a platform like Dex, except for the big projects listed on the top exchanges, the FTV and MC of other projects are actually not very high, and the transaction data of these top projects on the chain are not particularly active. This will result in the valuation ceiling of coins issued on TON not being as high as that of the Ethereum mainnet or Solana.
The third problem is the various segmented tracks on TON, including games, DeFi, social networking, NFT, etc. We found that most of these are actually application layers. The high explosiveness and short life cycle of the application layer itself are complementary to each other. In an industry cycle, we can see many applications and then return to zero. When investment institutions invest, they must not only consider the odds, but also the success rate and final exit. Nowadays, VCs generally have a longer lock-in period. If the project life cycle is short, even if it can be launched in the early stage, the fund may not be able to exit due to long-term operation and market cycle changes, making such investment more difficult. However, with the recent influx of developers, the gradual improvement of technical facilities, including the improvement of on-chain liquidity, and most importantly, the demonstration effect of head projects, VCs will be willing to spend more time and money on the TON ecosystem. At present, the trend seems to be quite obvious, a bit like the early days of Solana, which lacked technical facilities, had only web wallets, and RPC nodes were down every day, which is very similar to the situation of TON before. But as long as the direction is chosen correctly, the subsequent rise is still certain. So we are still very optimistic about the development of TON's entire ecosystem. I don’t think there is a big difference between now and half a year or a year ago. If the entire TON ecosystem can take off, it may be a cycle of 5 years, 10 years or even longer, rather than missing out on last year’s or early one. Wave, there is no way to shoot later. There seems to be more certainty now.
The fourth question is about the secondary market. I haven’t seen much about TON. I think we can go back to the previous topic and talk about several promising directions. Personally, I am more optimistic about two subdivisions. One is the transplantation of WeChat mini program games or the development of similar games. Some of the games on TON now have very good in-product purchase data, but users pay not for playability, but for the expected revenue from the tokens. In contrast, the leading mini-games in WeChat mini-programs are the accumulation of the development of the game industry in the past 20 or 30 years. Both playability and gold points have been iterated and verified for many years. The advantage of TON is that you can now use the wallet on the APP relatively well, and it has a very large user base. If these excellent games can be transplanted, there may be more real users on TON.
I know some teams are already working on this, and we are talking to them. Another direction is advertising streaming platforms. Although TG officials are also doing it, it currently seems not refined enough and the conversion rate is limited. But with TON's on-chain data, more accurate user portraits based on TG, coupled with precise traffic guidance on mini apps' landing pages, can greatly improve the conversion rate. Of course, there are more ways to play with tokens, which is a unique advantage of Crypto and can bring more room for imagination.
Zac (TonGifts Co-founder)
Our team is not a VC, but a project party. We have been in contact with TON for more than a year and would like to provide you with some perspectives from our experience. In our opinion, the most important thing for teams that want to come to TON is that it has 900 million users. It is very interesting to see what such a user base can bring. We believe that all project parties that are down-to-earth in C-end products will have huge opportunities on Telegram or TON. Specifically, for large VCs or project parties hoping for greater development, we believe there are three directions worthy of attention.
The first direction is social or traffic. There are 900 million users. How can we help projects obtain such traffic? Projects like Hamster or Notcoin received a lot of traffic early on. In terms of social networking, although the leading project parties have generated a lot of traffic, it is not easy for new project parties to quickly obtain millions or tens of millions of traffic.
The immediate question is, even if we see hundreds of thousands of traffic, will just traffic be enough for the next stage? Several guests just mentioned conversion rate and transaction capabilities. We believe that the real value lies in how we can help project parties obtain more accurate and high-quality traffic. This is what we are doing.
The second big piece is affordability. TON gifts itself is for asset distribution. We believe that red envelopes are essentially asset distribution tools. For example, after we liquidate or list tokens on TON with some project parties, we can directly distribute tokens to friends or groups through red envelopes. This itself is asset distribution. In addition to integrating TON, the main asset, we also support the distribution of multi-chain asset red envelopes. Including currently, we are also integrating the distribution of game points with some game project parties, as well as the transfer of points to games. Now on Telegram, such payment capabilities are very simple. We not only integrate the main assets of TON, but also support the distribution of red envelopes for multi-chain assets, including integrating the distribution of game points with game project parties.
Next, we believe that legal currency payment capabilities are also important. Although Telegram already has Telegram Star, it is mainly aimed at purchasing virtual items. We are cooperating with HashKey and other globally licensed legal currency cryptocurrency acceptors. In the future, we will be able to use legal currency to directly purchase cryptocurrency assets and conduct red envelopes or asset distribution in Telegram.
We are also concerned that although Telegram has 900 million users, its commercialization capabilities do not seem to be comparable to Facebook or WeChat. We believe there are two main reasons: first, how to help project parties obtain accurate traffic, and second, Telegram attaches great importance to user privacy and does not conduct user profiling analysis. We may have an advantage in this regard because our red envelopes have social relationship maps and accurate user portraits. We have helped more than 100 project parties and introduced more than 30 million users to their games, exchanges or DeFi, with very low cost and high user quality. We also help more than 70 game project parties obtain traffic. Through API services, users can receive red envelopes only when they reach a certain level in the game or recharge and pay. We have implemented an intelligent streaming platform and a CPA-oriented streaming tool.
Finally, we believe that the current introduction of Web2 users is not enough, and the longer-term goal is to grow Web3 users. Telegram or TON provide such an opportunity, because many of the 900 million users are not Web3 users yet, but there is a lot of room for conversion. We used Facebook and Google ads to directly deliver Telegram red envelopes, achieving a very low-threshold conversion process for Web2 to Web3 users. We have optimized the conversion cost to less than 0.1 US dollars.
To sum up, we believe that how to help project parties accurately empower traffic and payment capabilities in batches, and bring more new traffic from Web2 to Web3, may be an important future direction for Telegram.
