TL;DR

1. TON was originally created by the Telegram team, but after a legal dispute with the SEC, Telegram separated from TON. Since then, TON has been managed by an independent team of developers, attracting a large number of users and attention through the promotion of gamification mechanisms and reward programs.

2. Although the cooperation between Telegram and TON is limited, the relationship between the two has gradually become closer over time, especially in terms of Mini Apps and wallet integration launched on Telegram. However, TON still operates independently, and users in some countries cannot use TON wallets.

3. TON is exploring the possibility of integrating with applications other than Telegram to expand its user base and application scenarios.

4. Notcoin uses the Tap To Earn game mechanism and quickly attracts a large number of users through virality and recommendation systems. In addition, its reward mechanism stimulates user interest and participation. Although these games have successfully attracted a large number of users in the short term, the long-term user retention rate and the continued popularity of the game still need to be observed.

5. USDT plays an important role in the TON ecosystem, providing a stable digital dollar option that enables users to make fast and free payments around the world.

6. The Bitcoin trustless bridge is expected to be launched this year. Its importance lies in introducing a decentralized Bitcoin asset to TON's DeFi ecosystem, increasing the diversity of users and assets.

7. The TON Foundation plans to continue to increase TVL by rewarding liquidity providers and developers, introducing new DeFi products and use cases, and expanding community participation. The Foundation is also studying how to reduce the reliance of rewards on TVL to ensure the long-term stable development of the ecosystem.

The following is the original content:

Ton's origins and milestones

Laura Shin: Today's topic is the recent rise of TON. We have invited Alena Shmalko, head of ecosystem at the TON Foundation, and Jack Booth, marketing director, to discuss this topic. Welcome Alena and Jack.

Jack Booth: Hey, great to be here. Thanks for having us, Laura.

Alena Shmalko: Yes, totally agree.

Laura Shin: The Open Network, also known as TON, has been on a strong run since late February. Its TVL has grown 34x to around $750 million, its price has risen from around $2 to around $7 at the time of this writing, and it even surpassed Ethereum in terms of daily active addresses in May and June. And there are a lot of interesting games like Hamster Kombat and Catizen that are gaining traction. Additionally, Pantera Capital, a well-known crypto VC, announced its largest-ever investment in TON. But before we dive into these latest developments, let’s talk about your background. Alena, you talk about your role and how you came to TON, and then we’ll hear Jack’s story.

Alena Shmalko: Yes, with great pleasure. First of all, thank you very much for having us, it is my pleasure. Talking about myself, I have a few years of experience in the crypto space, initially I was involved in some startups, in some operational roles, and later I started running my own accelerator for Web3 startups. It was during this process that I got connected with TON, because I had the opportunity to learn about cryptocurrencies broadly and at a high level, to engage with different blockchains and ecosystems. Therefore, I chose TON because, in my opinion, it has the greatest potential among all other L1 and L2, and that is why I joined this ecosystem and now I work as the head of the ecosystem, responsible for supporting startups built on TON.

Laura Shin: What about you, Jack?

Jack Booth: I am the Chief Marketing Officer of the TON Foundation. I have been working in the marketing field for many years. In 2020, I was working for a startup in the UK. At that time, the epidemic broke out and I lost my job and received a government grant. I invested this money in Bitcoin and had a very interesting crypto journey. At that time, this small investment doubled in a few months. I thought, what a magical world this is, so I decided to develop a career in the crypto field from 2020, first working at Oasis Protocol, and joined TON a few years later.

I'm really excited to be working on TON and really pleased with how the ecosystem is developing. What we're seeing now is that through tap-to-earn games, many games are letting new users get crypto for the first time. It reminds me of how I felt when I first got into crypto, when I bought my first Bitcoin in 2020, when you first own a little bit of crypto, you start to understand what it means, why it's important, and why it's an interesting thing.

This isn't something you can easily explain to someone, and I think that's what TON and our ecosystem really contributes to the whole space, by giving people some initial cryptocurrency, they start to get interested and excited and start to understand what ownership on the blockchain really means. That's exciting for me, and for the millions of people who are now playing these games. That's my background, and why I'm so excited to work here.

Laura Shin: So let's talk about the origin story of TON. TON was launched by the company behind the messaging app Telegram, which conducted a $1.7 billion ICO in 2018. However, most listeners probably know the story: in 2019, the SEC obtained a temporary restraining order preventing Telegram from selling or distributing the tokens originally planned to be called GRAMs, and later court negotiations with the SEC were unsuccessful. So, the end result was that Telegram parted ways with this blockchain, but a group of developers decided to launch their own blockchain in March 2020. So, can you tell us about the progress of this effort and how TON has developed to where it is today?

Jack Booth: Yes, absolutely. A few of those developers won a competition to get the keys to what was then called the Telegram Open Network, an open source software. That network was nothing like it is today, and those developers grew it to the high-capacity, high-scalability state it is today, which was not there when they took over.

The initial two developers formed a loose organization called NewTON, and they attracted other developers who were passionate about building TON and became core developers. Then in 2022, the TON Foundation was officially established, and it has been a period of growth since then.

With the launch of the TON Foundation, we had a partnership with Telegram, and they decided to continue building on TON because of the great work done by the core developers, which was actually a catalyst for TON's growth.

Our integration with Telegram’s internal wallet means you can send crypto as easily as sending a text message in a DM. You can send TON, Bitcoin, USDT, and now Notcoin, instantly and for free using Telegram’s internal wallet, which is integrated into Telegram’s settings menu and is now available in all countries with Telegram users outside the US.

In the next few years, most Telegram users will have a TON Wallet in their Telegram menu, which is a transformative collaboration for us and the entire ecosystem. This is our first milestone.

The second milestone was the launch of Notcoin at the beginning of this year. Notcoin was launched globally on New Year’s Eve and grew rapidly, reaching 20 million users within the first month. This really made us understand, and the entire market understand, that Telegram’s distribution capabilities are real.

This integration attracted attention because it introduced millions of people to the crypto space. Although Notcoin was not a full-fledged cryptocurrency during its mining phase, it got people interested in the concept of earning some kind of yield through a simple mechanism that could potentially pay off in the future.

The third milestone I want to mention is the launch of Open League in March of this year. Open League is a major catalyst for the growth of our on-chain metrics. It is a competition between the best projects on TON, providing rewards to projects that acquire new users and users who use these projects. It is a great competition project and one of the results of Alena and I working closely together over the past six months. It currently accounts for about 60% of TON's daily active wallets and has contributed greatly to the growth of our chain.

Laura Shin: Okay, Alena, do you have anything to add?

Alena Shmalko: The current role of the TON Foundation is mainly to support this growth, especially to support founders and builders in our ecosystem. As Jack said, starting from the original core development team, we have grown to now include different people from the business field, such as the marketing team, which is also responsible for promoting the blockchain brand. But our main task is undoubtedly to further enhance and support this growth through the various tools, projects and initiatives we have launched for teams building on the chain.

Talking about Open League, this is an important project in the current ecosystem. It contributes about 60% of the on-chain users and about 15% in terms of TVL, which is, as you mentioned, growing very rapidly.

Open League is an open competition for TON teams, and the coolest thing is that you don’t need years of development experience, just build a Telegram Mini App on TON, implement some on-chain mechanisms right away, join the leaderboard and win big prizes.

These awards are distributed directly to the teams on a quarterly basis, and a quarter usually lasts about two to four weeks, and at the end of the season, the teams receive these awards, which are similar to a grant that can be used for marketing, product development, or airdrops for the community, which is amazing and something we haven't seen in any other ecosystem. These rewards are set up for major contributors to the growth of the ecosystem, and really come from projects that we build with us, and that we support.

In addition, we have launched an incentive program for LPs on DEX, such as STON.fi and DeDust. LPs will be rewarded for putting Jettons (ERC-20 standard tokens on TON) and Toncoin into the pool.

In addition, we also have an amazing project after launching native USDT on TON, which is probably the largest contributor to the growth of TVL. We are very much looking forward to future growth, and now our task is to maintain this growth and direct this value and liquidity to various different initiatives and projects.

The relationship between the Ton Foundation and Telegram

Laura Shin: Before we dive into the changes over the past few months, I would also like to get some details about the foundation. Who are the main members of the TON Foundation? How did they get to their current position?

Jack Booth: The main members include Steve Yun, who is the chairman of the foundation. He was actually one of the early community members of TON, and was involved even before the SEC issue came up. So he has been pushing for the establishment of an official non-profit foundation from the beginning, bringing together core developers, and starting to hire on the growth side, such as Alena's team, including ecosystem development, developer relations, and my marketing and business development team.

There are five directors now, I am one of them, and I am responsible for the marketing side. Our mission is to achieve the goal of the TON ecosystem, which is to make cryptocurrency accessible to everyone. We have a very ambitious goal to get 500 million Telegram users on the blockchain by 2028.

Laura Shin: What is the current number of Telegram users?

Alena Shmalko: 900 million users per month.

Jack Booth: Yes, so we hope to convert 30% of Telegram’s monthly active users into TON users by 2028.

Alena Shmalko: And we also expect growth in the number of monthly active users of Telegram.

Laura Shin: I want to ask more about the relationship with Telegram. As we just mentioned, TON was originally initiated by Telegram, and then because of the SEC's actions, TON developed into an independent project. However, last September, Telegram chose TON as the only built-in encrypted network in its application. How did this happen?

Jack Booth: Telegram had actually been developing on TON before this. They bought fragment.com, which was a major use case for TON. It was a platform where you could buy social media usernames as NFTs for the first time and actually own and use them. They had built this platform and seen it succeed, netting $150 million in NFT username sales. It was a very successful project, and then they naturally started working more with the TON Foundation and the TON blockchain to try to build a close relationship that would be beneficial to both parties.

For Telegram, this is helpful for them because we are helping them grow the Mini Apps ecosystem.

Telegram has an open third-party Mini Apps program where anyone can come and build a Telegram Mini App. And for us, this helps with the distribution of our project, because our current project is building Telegram Mini Apps, and these applications are now distributed to the Telegram user base on a large scale.

Pavel Durov announced in his channel a few days ago that they will create an app store inside Telegram and promote Web3 applications for TON. We are very excited about this, we don't know the details yet, but I guess it will be part of the main user interface where you can find applications, Mini Apps, and use them directly inside Telegram.

Nikolai and Pavel Durov are the creators of the TON whitepaper, and the technology has come a long way since then. They used it to launch the Fragment app, which was a huge success in terms of revenue, then they integrated the wallet, and now they are continuing this collaboration to try to integrate more ways for the blockchain to actually interact with the Telegram app.

Telegram also uses TON for creator payments. You can advertise on Telegram by paying TON, and then the owner of the Telegram channel will also receive TON payment. 50% of the advertising revenue belongs to the creator.

Telegram is looking for multiple ways to work with TON, and we are not directly involved in their decisions on how to work together, they are more like a third-party developer. In fact, the only part we really work with is the wallet integration, and we jointly decide how it looks and works.

Laura Shin: From what I understand, Toncoin seems to be the largest asset on Telegram's balance sheet. What percentage of Toncoin do they hold? How much does Pavel and Nikolai Durov hold?

Jack Booth: I'm not very clear about this question, so I can't comment or answer the specific number. I don't want to be wrong.

Laura Shin: Okay, but even though you guys are working on this decentralized network, because it’s focused on this specific application, you mentioned that you guys are primarily responsible for the wallet, but there are no other integration points or collaborations. In that case, it feels like there should be fairly regular communication and collaboration, right?

Jack Booth: Actually, no.

Alena Shmalko: Yes, we got most of our news from Durov's channel like everyone else, right Jack, we just follow his channel and learn something new.

Jack Booth: Yes, that's true. For example, they use Toncoin as the payment for the advertising platform, which I also learned from Pavel's channel.

This is huge news, and we had no idea about it, no one did. They didn't discuss anything with us at all, in fact they only talked to the wallet team because the wallet is the only real integration point. And that's not our team, that's a completely different company called TOP (The Open Platform), they run the wallet, run STON.fi, one of the DEXs on TON, and many other great TON projects, all of which are invested and built by TOP.

So frankly, as a foundation, we don’t get a lot of information from Telegram. Even when Pavel announced USDT on TON at the TOKEN2049 conference, we knew it was going to happen, but we didn’t know he would announce that Telegram stickers would also be on the TON blockchain, and other things he mentioned at the conference. So, although there is cooperation, it is mainly on the wallet side, not on our side of the foundation. They are more like third-party developers.

Alena Shmalko: I would like to add that I actually counted the number of times Pavel mentioned TON at the TOKEN2049 conference, which was also a complete surprise. Although we knew that USDT would be launched on TON, the other news was a complete surprise. And Jack mentioned the upcoming app store, which we also did not have any details about.

There is also a separate team building the Telegram App Center, which they have been doing for over a year, and it is now the main directory of TON apps, not only Web3 apps, but also Web2 apps. It is still the main way to discover different apps on TON, and we certainly strongly recommend exploring it.

One more thing to add is that Telegram Mini Apps are still the main way to integrate different Web3 elements into the messaging app.

We also learned that Telegram stars is a new in-app purchase method, and Web2 developers are now able to learn more about cryptocurrency by withdrawing their income as Toncoin. They let users pay with Telegram stars, but the income withdrawn by developers is Toncoin, which is like the revenue sharing for community creators and channel owners mentioned by Jack, and is a way to guide more people into the crypto field.

Laura Shin: Hearing you say that, I think of the relationship between Ethereum and Consensys. But the difference is that you are more like Cosmos, and then there are a lot of things like application chains. But I have another question. At present, the TON blockchain is very focused on the Telegram platform, but do you have plans to integrate into other applications?

Jack Booth: That's a good question, do other chains have plans to integrate into something other than the Google Chrome extension? What's the difference? Telegram is an open platform with millions of users, Google Chrome is also an open platform with millions of users.

Therefore, we chose and pursued a strategy of placing our application frontend in a messaging app that is here to stay. We hope that Telegram will continue to grow, just like other chains that rely on Google Chrome and Chrome extensions as their frontend platforms.

We want to put our apps in a place where they can be easily shared, make these apps very viral and easy to use. Telegram's Mini Apps platform makes this very easy to achieve. So we encourage projects to launch there, as the main interface for interacting with the blockchain in the Telegram Mini App, which does not mean that they cannot create a website.

The DEXs we have now, like STON.fi and DeDust, both have Mini Apps, but they also have websites that can be accessed through any web browser, so I think it is more of a platform choice question, and I wouldn't say that this makes TON centralized by relying on Telegram because it's just another interface that can showcase applications.

This makes life easier for app developers, as they don’t have to develop a full app themselves and then have users download it. Instead you just tap a button in Telegram and the Mini App pops up, and users can start using it right away, without having to download anything or leave the Telegram app itself.

We made these choices and strategic design decisions because of the user onboarding challenges that cryptocurrencies face. It’s too hard to get people to set up an exchange account, fund it with their bank account, then install a Chrome extension, fund their wallet with their exchange account, and then start participating in blockchains, learning the different steps and nuances of each chain.

On TON these problems do not exist. You can start using any application, without needing anything, and then be educated step by step in the process, and eventually create a wallet, which can be created in just two clicks in Telegram, and then it will be permanently in your settings menu.

By the end of the year, most users with Telegram will already have the wallet in their settings menu, which makes the signup process very painless and adds virality to all apps, which is why we see so many users now using TON apps inside Telegram because it is a better design decision.

Laura Shin: Yes, there is a convenience advantage to that. Even though I am in the US, I can access some of these features.

Jack Booth: That's lucky.

What makes Ton different

Laura Shin: Let’s talk about the TON blockchain. What features do you think make this blockchain unique?

Alena Shmalko: I think what is very clear is its distribution capabilities, which is what we have discussed today. Of course, TON is very scalable, thanks to its inherent architecture, and it is very fast, we set a speed record last fall.

Laura Shin: Yes, can you give us more details about the architecture and speed?

Alena Shmalko: Yes, thanks to sharding, which is the main element of the architecture, the TON blockchain is considered one of the most scalable, and we are continuing to work on further improving scalability. Last fall, probably in October or November, we set the fastest record, reaching 100,000 transactions per second. Jack, please correct me if I'm wrong.

Jack Booth: 104,700 transactions per second, that’s the highest record.

Alena Shmalko: This is done in a quarantine environment, and we still need to improve this in a live environment. There are a lot of teams working on this right now, and like Jack said, TON's distribution capabilities are unparalleled, you can't find anywhere else where you have so many people in one place at the same time. So we have 900 million monthly active users in one place, ready to enter the crypto space.

I want to go back to the previous question, Laura, you asked why we are so focused on Telegram, we do not require every team in the TON ecosystem to focus only on Telegram Mini App. This can essentially be seen as an onboarding tool, where developers can build a Telegram Mini App to attract users on Telegram and then guide them to the Web App in the original sense, because all of our DeFi protocols, including DEX, originally started as Web Apps, and they continue to work in this area because people are used to participating in DeFi using browsers, not through Telegram Mini Apps.

There is a new example of this is BLUM, a hybrid trading platform that builds cross-chain, multi-chain products, focusing mainly on TON, and they are now attracting users through a very simple click game. There is no core functionality in this application yet, but they have introduced millions of users to the Mini App through very simple, easy-to-use mechanisms. Then they will educate these users and guide them into more complex areas such as trading on the chain, cross-chain swaps, and so on.

Ton's mini-game ecosystem and conversions

Laura Shin: So now let's talk about these Mini Apps, or games, because that's what's been all over Telegram. So the first game that you mentioned that's really popular is Notcoin, which is a clicker game. But for people who are less familiar, especially in the U.S. because we don't have full access to everything, please explain how the Notcoin game works and why you think it's become popular.

Jack Booth: This is one of my favorite topics because Notcoin did a great job. The reason it became popular is very simple, it's virality. They had a referral system and incentives from the beginning. If you can master these two concepts as an application and promote it on Telegram, you will find that there are tens of thousands of users.

I say this without a doubt and it’s all because of the referral mechanism in Telegram. The referral process for Notcoin is very simple, I go into the app, go to my friends tab, click share with friends, and then I can select my entire contact list and they will receive a referral link which will earn me Notcoin at the time.

Now, all tap-to-earn projects have copied this referral mechanism. It’s incredibly powerful because the friend who receives that link can jump right into the game with just one tap. No need to deal with wallets, no need to set up anything, no need to download a new app, everything opens up instantly.

Virality is the first element, and then the incentive mechanism. Another project that is bigger than Notcoin is called Hamster Kombat, where you are the CEO of your own cryptocurrency exchange platform.

Unlike Notcoin, in addition to click-to-earn, they also include a click-to-earn mechanism where you can use these coins to buy things that are profitable every hour. The airdrop of HMSTR tokens will be based on hourly profits, which is interesting, it's more of a measure of engagement, how engaged are you in the game, your hourly profit is basically reflected in that.

In Telegram Mini Apps, virality and incentives are key. If you can introduce these mechanisms in a simple and fun way that keeps people engaged and coming back every day, your app will reach millions of users. This is very simple and has been proven more than 10 or 15 times by different projects.

Laura Shin: I wanted to ask you about the quality of these users, because honestly, this viral recommendation mechanism reminds me of FarmVille on Facebook.

Jack Booth: Yeah, I used to play FarmVille.

Laura Shin: Right? The game was very popular on Facebook at the time, and the mechanics were very similar. But in this case, Notcoin seemed to attract a lot of users who didn't necessarily stick around for the long term, or didn't play very often. Similarly, Hamster Kombat attracted 200 million users in its first three months, an achievement the team hopes to put in the Guinness Book of World Records, and its YouTube channel gained over 10 million subscribers in a week and currently has 34 million subscribers. But from what I understand, this is largely to earn tokens, and users need to watch these videos. So this reminds me of the question we see over and over again: Are these users loyal or are they just "mercenaries" chasing short-term benefits, and would they leave immediately if there were better incentives? What do you think about this?

Jack Booth: I can answer that and then I'll let Alena go. Projects have two choices, they can launch the project and then expect users to join automatically, or they can build a community first and then work hard to convert and retain users in that community.

The TON project chose the latter, while most Web3 projects tried and chose the former, but were not necessarily successful in attracting mass users.

This is a different strategy, building a community around incentives first, which is different from past airdrops, where in order to qualify for an airdrop, you needed to take a series of steps, such as opening an account, getting the Chrome extension, etc. This approach cuts out those steps and you can go straight to doing something valuable for the project.

Take Hamster Kombat, for example. They designed a system to get people to subscribe to them on YouTube. What was in it for them? Apparently, it brought in hundreds of thousands or even millions of dollars in advertising revenue.

So the great thing that happened here is that the community was built first, and they were very excited and excited about the project, especially after the mining phase. The mining phase was only part of the launch, and unlike many crypto projects that have high fully diluted valuations and low circulation, most of the tokens here were airdropped to the community at the beginning, and then the community decided whether they liked the token and the project.

Notcoin has transformed into providing traffic for new projects. Projects must use Notcoins to purchase this traffic. Therefore, Notcoin is now practical in itself. Other projects may choose the traffic route or a completely different route.

For example, BLUM, which Alena mentioned, is a completely different case, because they have delivered a product roadmap, and the click-to-earn phase they have stated is a phase, after which they will become a trading platform. As for the utility of the token they offer, it is not clear, but they chose to build an amazing community, I can't remember the exact number of BLUM players, but I think it is around 30 million...

Laura Shin: Many people speculate that a significant portion of these users are bots. In this case, do you think this is real activity?

Alena Shmalko: I can answer this question. According to official statistics, such as the statistics recently released by the Notcoin team, they announced that more than 30 million people played the game before the TGE and token listing, 35 million to be exact, and 11 million people received Notcoin, either in on-chain or off-chain accounts. Now Notcoin has more than 2.4 million on-chain holders, so the conversion rate from off-chain players to on-chain holders is about 6%.

Laura Shin: Sorry, did you say 6%?

Alena Shmalko: Yes, if we count the 2.4 million people who hold Notcoin now, then about a third of the 11 million people who have received Notcoin overall have received it both on-chain and off-chain, so the conversion rate is about one-third, or 30%.

Laura Shin: Or if you go from 11 million to 2.4 million, maybe 20%.

Alena Shmalko: No, no. One third of the 11 million was claimed on-chain and off-chain, because Notcoin is listed on multiple centralized exchanges and people can transfer it from the game to their accounts on the exchanges. So 11 million people, we can say it is a conversion rate of one third, which is a pretty good conversion rate.

Yet another example is Catizen, one of the most successful and popular play-to-earn airdrop games, which is not just a clicker game but has implemented on-chain mechanics from the beginning.

Unlike Notcoin, which was implemented on-chain after the TGE, Catizen has been an on-chain game from the beginning. According to an article by CoinDesk, their conversion rate is around 6% to 7%, which is much higher than the market average, proving once again that games on TON can do it even before the TGE and token launch.

According to these numbers, we are doing well. Of course, there is a lot of room for improvement. But it all depends on how the teams set and design their complex roadmaps and show the community that after the TGE they will continue to build interesting and entertaining games, or launch trading bots, task platforms or e-commerce platforms, as Catizen plans to do.

We at the TON Foundation and others in the ecosystem are also committed to supporting them, Open League is a great example as we reward users for participating in other products and protocols in the ecosystem. For example, players of Notcoin, Gamey or Catizen can now go to the DEX and earn a lot of rewards and points.

It’s amazing that we’ve attracted such a large audience and created such a buzz in the Web3 space, but we need to understand how to sustain this growth, which is what we’re currently working on.

Laura Shin: USDT was launched on TON in April. There is now $730 million worth of Tether on the TON blockchain. How is it being used here?

Jack Booth: Before we get into that, I want to give you a general overview of what this is, which is a conversion funnel.

The funnel is to convert Web2 users, people who don’t care about crypto, into Web3 users. I think this is what most blockchains and people in the space are trying to do in their own way.

We start from the most basic principles, if there is a potential market of 900 million users, we want them to do some on-chain activities, but we can't force them to do it, we need to guide them. So, click-to-earn is an easy way to get people involved, get them interested, and get some cryptocurrency in their pockets through airdrops.

As I said at the beginning, now I become a token holder, a holder of a project, I'm interested and excited about it. Then we have Open League, which is the next step... Or, before Open League, we had USDT, which is now a digital dollar that I can send to anyone in a private message for free and instantly around the world. It's a global product, and if I have their Telegram, I can pay anyone with it.

Laura Shin: When you say global, does that include the United States?

Jack Booth: No, not the United States.

Alena Shmalko: I mean wallets through Telegram excluding the US, but you can use USDT on the TON chain through any browser extension like Tonkeeper, MyTonWallet, Tonhub and other self-custodial wallets.

Laura Shin: I assume, I don’t know if I understand it correctly, that Telegram and TON have been affected by regulatory issues in the United States, especially the SEC. If the situation at the SEC changes, will this restriction be lifted?

Jack Booth: Of course. The problem is that Telegram and TON were affected by the SEC in the past, and no one wants this to happen again, so we are currently focusing on the rest of the world. If the environment and atmosphere in the United States changes, this issue may be reconsidered. But for now, the wallet integration within Telegram is not available to US users by default unless there is a major change in the regulatory attitude in the United States.

Alena Shmalko: It's not just the US, there are other countries that can't use this wallet, like sanctioned countries like North Korea. I want to add that for the sake of fairness. However, a very important point is, Laura, you mentioned that you are in the US and cannot access certain features. This refers only to the wallet features. This is important. You can easily access any Telegram Mini App, such as making purchases or participating in DeFi activities within Telegram Mini Apps, and you can easily use any self-hosted wallet on the TON chain. Just like using Metamask on Ethereum, this also works on other chains.

Laura Shin: Yeah. So, Jack, go ahead and describe your conversion funnel.

Jack Booth: Oh, thanks for reminding me. The wallet experience in Telegram is really nice, it pops up in Telegram and you can store your Bitcoin, Notcoin, and USDT there, you can send those instantly to friends around the world for free, and it’s a great first step for anyone to get started with crypto.

When you start with click-to-earn, you may not necessarily want to participate in the complexity of DeFi, and the wallet in Telegram is the first step to attract people to start understanding. Oh, now I can send money to my friends in Telegram, it's very easy.

Then we have Open League, which is very easy to introduce to people. It's actually also in the self-hosted wallet on Telegram, and you can easily access the Open League pool through the Open League bot and start participating in providing liquidity for some of the projects in Open League. And this is the last step, which is usually more participants. We have click-to-earn for everyone, and then some people can convert to sending crypto globally in private messages, very easily.

And then some of them will start using more sophisticated DeFi products on TON. That's the whole setup, that's the whole system, that's what we're trying to build. The strategy of the foundation is to help make that happen. We think that's the most efficient route, we see ways that we can optimize the entire funnel, we work with community teams and contributors to do that, and we see that it's working. So we're excited to continue to develop along this route.

Laura Shin: Yes, there is also an aspect about the trust bridge that allows users to cross-chain bridge Bitcoin to the TON network. I'm wondering when you expect to release this feature and I'm also curious about what will happen when Bitcoin holders can do this.

Jack Booth: Actually I don't know if I can reveal the release date, it's too early. But it will definitely come soon. I'm very excited about it because for me, this will be the next important asset after USDT and the next focus in the user pool after tap-to-earn.

We believe Bitcoin can become a USDT-like asset in the TON ecosystem, it can grow very quickly, and we will do our best to help it achieve this. It is very valuable to the DeFi ecosystem inside TON because we suddenly have a Bitcoin asset that is 100% backed by a Bitcoin asset on the Bitcoin chain that is bridged to TON through trust and is basically a better version of Wrapped Bitcoin. This is a trustless version of Wrapped Bitcoin that does not involve an intermediary between the Bitcoin network and the TON network. It uses validators from the TON network itself to verify the Bitcoin ledger.

So nobody holds the keys, everything is done through smart contracts. It's a completely trustless and transparent bridge, unlike many other bridges on the market right now, and it's basically as close to real Bitcoin as possible, but on the TON chain.

So I'm really looking forward to the launch of this bridge because it has huge potential for the TON DeFi ecosystem to allow people to better utilize their Bitcoin through lending protocols, DEXs that we have, liquidity pools, and even potentially more complex scenarios. So yes, the bridge will be live very soon, definitely this year. We're very excited about it.

Laura Shin: Yes, it looks like there is a lot to look forward to for Bitcoin users as there will be new ways for them to use Bitcoin even within their ecosystem. I also wanted to ask about some of the illegal activity on TON mentioned in the Fortune article, which includes channels selling everything from guns to drugs to stolen stimulus checks. A criminology professor is quoted in the article who said, "It is easier to create a Telegram account than a Facebook account" and also said, "Telegram is now a playground for criminals"

So, I'm wondering about the ad networks that we've talked about, where people can earn ad revenue through their content. Criminals on Telegram can also earn ad revenue through their content, and they can pay with cryptocurrency, and they can pay for illegal goods through the TON wallet. I'm wondering how the foundation views these issues, and if there's any way to prevent or mitigate the TON network or the TON wallet from being used for illegal activities.

Jack Booth: Yeah, I think that's a legitimate question, and it's a legitimate question that we need to address at some point. We're focused on how to bring Web3 to the masses, and that's all the focus of our team. As for issues like illegal activity, that happens on every chain. That's one possible use of blockchain, right? It can be used as a tool for illegal activity, and that's why we have great partners like Elliptic who help with criminal transaction AI analysis, looking for these types of wallets and providing them to the authorities, and working with the wallet team at Telegram to really eliminate these activities.

On the foundation side, we work in a decentralized ecosystem, so we don't necessarily have control over what happens in any transaction on TON. TON itself is self-run, and these things happen there, they are a problem, but it's actually the projects that enable the problem to stop the illegal activity from happening. If it happens in a wallet, then it's up to the wallet team to deal with this, and it's up to the compliance team of the wallet.

That's why Alena mentioned before, outside of the United States, there are other countries where users can't use wallets, such as Iran and other sanctioned countries like North Korea, where there are no services and users can't use wallets. So these are centralized teams that need to solve the problem, and for our foundation, we just focus on supporting the construction of the Web3 ecosystem.

Alena Shmalko: Yes, as you said, it was always a joint effort of different independent teams, for example we as the TON Foundation and then Telegram played a big role here. By the way, Telegram has never been formally charged, but people always pointed out that Telegram had this risk from the beginning.

Whereas wallet teams and project teams can work with specific marketing and PR companies to run their advertising campaigns. Of course, their moderation teams will never allow any advertising for illegal products. This is the responsibility of each team. And that is exactly what is good about it, because there is no single actor responsible for ensuring that such campaigns never happen. It is a joint effort and we are certainly working on it.

Ton's next milestone

Laura Shin: TON has obviously made a lot of progress this year, and as we discussed, there are a number of ways that this flywheel effect has already begun, so what are the next milestones you hope to reach?

Alena Shmalko: Yes, we have very clear and exciting milestones. We hope to reach $1 billion TVL by January 2025 and reach 100 million on-chain users and on-chain wallets by January of the same year. How do we achieve this in terms of TVL? Laura, you mentioned that our current TVL is over $740 million or so.

I haven't checked today's data, but it's probably in this range. As I mentioned, this growth is obviously motivated by the rewards we provide to liquidity providers on DEX, especially after USDT was launched. Because the returns are very attractive, we put a lot of effort into this program.

We will continue to reward users for holding their liquidity on-chain while looking for and proposing new ways to bootstrap this liquidity, as the main incentive programs cannot last forever and the rewards and incentives will end at some point.

Our goal now is to create a very thriving and diverse DeFi environment where people see more opportunities to bootstrap their liquidity within the ecosystem, such as lending protocols, Perp DEXs, DEXs, yield farms, liquidity staking, etc. We are working closely with existing and new teams on TON and just finished a hackathon where we attracted over 1,000 teams to participate.

Jack Booth: To be exact, over 1,200 teams applied to participate in the hackathon.

Alena Shmalko: Yes. A lot of complex DeFi products are coming online because we have a good foundation. In terms of DEXs, Perp DEXs and lending protocols, we have good coverage, but we definitely need more use cases. This is exactly the direction of Open League as a main initiative. We will continue to provide rewards, but we will do it very reasonably and learn from the experience of other chains, especially those that have experienced a big drop after attracting a lot of liquidity. So the main effort now is to make sure that this does not happen on the TON chain. And then there are a lot of community activities, Jack, can you introduce this part.

Jack Booth: Yes, now on the community side, we have TON Society, TON Society is our kind of grassroots sports structure, a bit like the way sports are managed in the UK, you have small regional teams that work hard to find and develop talent to become athletes. The idea is to hopefully foster projects regionally and locally, hold events, get people involved and understand blockchain in the local space, and do this in multiple regions around the world.

Currently TON Society has nine regions around the world, and will expand to five more regions in the next six months. This means there will be more local activity coming to people’s regions, which we hope will also lead to more decentralization. We hope that more leaders will be able to rise through the ladder of TON Society and eventually start their own projects or contribute independently to TON’s ecosystem goals.

TON Society is very important to us and it will be a core focus where we will be devoting a lot of time over the next six months. TON Society also organizes the Open League hackathon and bootcamp. We will be doing a new round of bootcamps and hackathons in October. This hasn't actually been announced yet, so this is a little teaser for those who have been hanging in there until the end. The last hackathon was very successful. It's great to see all these teams contributing now in the TON ecosystem.

Last Friday, 23 teams prepared and presented their projects for a chance to win $2 million in prize money. The teams will move directly from the hackathon to the Open League, where they will start receiving rewards and attracting users if they win.

Open League is really trying to attract users to new projects, which is very exciting for the project because we've seen the number of project token holders in Open League increase by 13 to 15 times since it started in March. I think there were about 120,000 Jetton holders at the time.

Jetton is the token standard on TON, similar to ERC-20. Now, we have more than 1.6 million Open League token holders, so Open League is really a catalyst for attracting people to join and become users of new projects, which is very exciting, and it also increases competition in the ecosystem. These new teams from TON Society will enter the Open League and become major projects on TON.

We also have this path on the developer side. So we not only build a foundation on the user side, but also work on the developer side to help them transform from Web2 developers to Web3 developers on TON, which is also a focus of our community.

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