introduce
Pantera Capital is pleased to announce our latest investment in TON, a Layer 1 network originally designed by Telegram and continued to be operated by the open source community. We believe TON has the power to bring crypto to the masses as it is widely used on the Telegram network. Telegram has over 900 million monthly active users on its future-proof, fast, and secure messaging platform, which can be used for personal and team communications, large-scale community building, content sharing, and more.
By leveraging Telegram’s massive user base and seamless user experience, as well as the vibrancy of TON’s emerging ecosystem, we believe TON has the potential to become one of the largest crypto networks.
Combining the ideals of Web3 with mass adoption
Among the world’s leading communication tools, Telegram stands out because its platform not only embodies many of the spirit of crypto, but also has significant distribution. Telegram’s monthly downloads regularly exceed those of its closest alternative, Signal, by 10 times, reaching over 36.7 million downloads in January this year.
Telegram vs. Signal: Monthly Downloads in January 2024
What about other top messengers? Telegram is the only major platform without regulatory barriers to incorporating Web3 into open blockchain networks. While messengers attempted to incorporate crypto payments with Libra, they ultimately faced regulatory hurdles from the United States, leading to their complete shutdown. WeChat tried to integrate the digital yuan’s CBDC payments, but the system was limited in scope and developers did not have the ability to create permissionless apps.
We believe that Telegram has the power to bring cryptocurrency to the world due to its shared Web3 ethos and massive distribution.
A scalable platform built for hundreds of millions of people
The Open Network (TON) is a blockchain initiative developed by Telegram that aims to leverage the messaging app's extensive user base to create a decentralized network capable of supporting a variety of applications. TON has a multi-component ecosystem that includes the TON Blockchain, TON Storage, TON DNS, and TON Services, all of which are integrated and work together seamlessly.
The system's backbone, the TON blockchain, is built for high performance and scalability, processing transactions quickly thanks to its dynamic sharding mechanism. This architecture ensures that the network can process millions of transactions per second and scale efficiently as the number of users grows, making it an ideal choice for developers 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 to get started
Onboarding users to crypto applications is often difficult. New users are required to write down a 24-word secret key and store it in a safe place. But what if you forget your secret key? How do you send or receive funds to another user? Copying and pasting a public key may not be the best experience.
Telegram has simplified many of the complexities through the Top.co wallet in Telegram, which allows users to seamlessly connect to mini-apps. Users can easily buy, sell or manage tokens and NFTs in one interface, accessible directly from Telegram settings and personal chats.
The wallet in Telegram features both escrow and self-custody management based on TON, allowing all users to enjoy an easy login experience while giving experienced users the option to have full control over their keys. With TON's self-custody wallet, users do not need to remember their seed phrase, instead, they can simply use Telegram and their email as a backup.
Top.co's wallet in Telegram has 15 million users and growing
The era of encrypted applets
TON's rapidly growing ecosystem leverages Telegram's innovative design and large user base. More than 360 million users use Telegram's so-called "Mini Apps" each month, which include chatbots and mini games. With TON, we envision that integrating crypto into these "Mini Apps" will greatly enhance the user experience for these hundreds of millions of users. There are more than 300 projects on TON, most of which are mini apps built on Telegram and can be accessed through the Telegram App Center.
Earlier this year, we observed how Memecoin trading tools like BonkBot were generating tens of millions of dollars in revenue through Telegram’s user interface. TON-based applications like StormTrade now allow users to trade perpetual contracts, cryptocurrencies, and stocks using the same interface. StormTrade is trading over $10 million per day, and we believe similar TON-native Telegram bots will become the preferred user experience for many traders.
Telegram is the foundation for viral social and gaming apps. Early experimental games on Telegram, such as Pixels and Fanzee Battles, attracted millions of users in a matter of days, demonstrating the platform’s huge potential for user stickiness. Catizen, a cat-themed mini-game platform built on TON, currently has over 4 million users, with over 700,000 playing every day. Notcoin, a TON-based social app where users compete to mine digital currencies, has quickly attracted over 30 million users, one of the fastest cryptocurrency adoption events ever.
The TON Foundation recently announced their incentive program, which will reward the development of successful TON applications. We believe this will foster the creation of exciting new crypto-apps that have the potential to reach the masses.
Unlock new ways to make money
TON is providing the Telegram community with multiple ways to monetize, share, and grow their businesses. As a decentralized marketplace on the TON network, Fragment provides a platform where users can trade collectibles such as virtual phone numbers and custom Telegram usernames. Fragment has facilitated over $350 million in sales of custom usernames and virtual phone numbers. This is just the beginning. In the near future, the 730 billion Telegram stickers that have been sent may be transformed into NFTs. These NFTs will then be bought and sold through the TON blockchain.
Telegram has taken a significant step by integrating revenue sharing with content creators and channel owners through its TON blockchain-based Fragment platform. The move marks a shift from the traditional social media model by directly allowing these creators to profit from advertising revenue 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 economic benefits in the digital ecosystem.
Native stablecoin payment
On April 19, 2024, Tether announced the deployment of its stablecoin USDt on the TON blockchain and Telegram wallet. This development represents a major advancement in the crypto industry as it allows hundreds of millions of users to seamlessly send and receive stablecoins through the Telegram platform, making payments as simple as using Venmo or Apple Cash.
The scalability of the TON network allows for a flat fee of approximately $0.10 for transactions between two users, which is 66% cheaper than other crypto payment platforms. In addition, built-in on- and off-ramps, including bank transfers and exchanges, are being provided to further facilitate access and usage.
Stablecoin payments on TON
We believe that stablecoin payments on Telegram wallets are particularly important for individuals in developing countries, who often lack access to banking services and are forced to navigate complex crypto user interfaces to store and transfer funds. With the deployment of stablecoins on the TON network, cryptocurrency is taking a big step towards achieving the vision of programmable peer-to-peer money and a globally accessible decentralized financial system.
in conclusion
We believe that the TON network is still in its early stages, and we are excited to see its ecosystem and new features adopted by the Telegram user base.
At its core, Telegram embodies the spirit of cryptocurrency: an open, free network accessible to all. With TON, Telegram has achieved a symbiotic relationship where scalable smart contract functionality and a powerful payment network enable groundbreaking capabilities that are not possible in a Web2 environment. Given its large user base, scalable infrastructure, thriving mini-app ecosystem, and native stablecoin transactions, TON taps into the potential of a network with 900 million actively participating users.
At Pantera Capital, we are excited about this investment and eager to support future builders in the TON ecosystem. If you are developing on TON and share our enthusiasm, please do not hesitate to contact us.
