Investing in TON Network
Author: Paul Veradittakit, Managing Partner at Pantera Capital
Translated by: Zombit
Introduction
Combining the spirit of Web3 with immense distribution power
A scalable platform built for billions of users
User-friendly experience
The era of cryptocurrency mini-applications
Unlocking new ways to make money
Native stablecoin payments
Conclusion
We are delighted to announce Pantera Capital’s latest investment in TON, a decentralized network originally designed by Telegram and continued to be developed by the open-source community. We believe that TON has the capability to bring cryptocurrency to the masses, as it has already gained wide adoption within the Telegram network. Telegram is a forward-thinking, fast, and secure communication platform with over 900 million monthly active users for personal and group communication, large-scale community building, content sharing, and more.
By leveraging Telegram’s massive user base, seamless user experience, and the vibrancy of the emerging TON ecosystem, we believe TON has the potential to become one of the largest cryptocurrency networks.
Among the leading communication applications globally, Telegram stands out for its platform that not only embodies the spirit of many cryptocurrencies but also has significant distribution capabilities. Telegram’s monthly downloads are 10 times higher than its closest competitor, Signal, and it exceeded 36.7 million downloads in January alone.
Compared to other top communication applications, Telegram is the only major platform that is not hindered by regulations and is capable of integrating Web3 to establish an open blockchain network. While Messenger attempted to integrate cryptocurrency payments with Libra, it ultimately had to halt due to regulatory barriers in the United States. WeChat also tried to integrate CBDC payments with limited scope for developers to create permissionless applications.
We believe that due to the shared spirit of Web3 and its immense distribution capabilities, Telegram has a high likelihood of bringing cryptocurrency to the world.
The Open Network (TON) is a blockchain project developed by Telegram with the aim of creating a decentralized network that can support various applications using its massive user base. TON has a multi-component ecosystem, including the TON blockchain, TON storage, TON DNS, and other TON services, all seamlessly integrated.
The core of this system, the TON blockchain, is built for high performance and scalability, thanks to its dynamic sharding mechanism that enables fast transaction processing. This architecture ensures that the network can handle millions of transactions per second and efficiently scale with the growing number of users, making it an ideal choice for developers aiming to launch applications for billions of users without sacrificing speed or security.
TON’s dynamic sharding enables the network to provide scalable services for millions of users.
Typically, it is quite challenging for users to start using cryptocurrency applications. New users need to memorize a 24-word password and securely store it, but what if they forget the password? Additionally, copying and pasting public keys for sending or receiving tokens may not provide the best user experience.
Telegram simplifies much of this complexity through its Telegram Wallet provided by Top.co, allowing users to seamlessly connect to mini-applications. Users can easily buy, sell, or manage tokens and NFTs, all through one interface, directly accessible through Telegram settings and personal chats.
Telegram Wallet features include both hosted and self-hosted management based on TON, enabling a user-friendly onboarding experience for all users while providing experienced users with options to have complete control over their keys. Through TON’s self-custody wallet, users do not need to remember their mnemonic phrases; instead, they can simply use Telegram and their email as backups.
Telegram Wallet by Top.co already has 15 million users and is continually growing.
TON’s thriving ecosystem leverages Telegram’s innovative design and massive user base. Over 300 million users interact with Telegram’s so-called “mini-applications” every month, including chatbots and small games. Through TON, we envision integrating cryptocurrency into these mini-applications, significantly enhancing the user experience for these hundreds of millions of users. There are already over 300 projects on TON, with the majority building mini-applications on Telegram, accessible through the Telegram App Center.
Earlier this year, we observed meme coin trading tools like BonkBot generating tens of millions of dollars in revenue through the user interface of Telegram. Applications such as StormTrade, based on TON, now allow users to trade perpetual contracts, cryptocurrencies, stocks, and equities through the same interface. StormTrade facilitates over $10 million in daily trading volume, and we believe similar TON-based Telegram bots will become the preferred user experience for many traders.
Telegram provides a foundation for viral social and gaming applications. Early experimental Telegram games like Pixels and Fanzee Battles attracted millions of users within days, showcasing the platform’s immense potential in user engagement. Additionally, Catizen, a TON-based cat-themed mini-game platform, already has over 4 million users, with over 700,000 users playing daily. Notcoin, a TON-based social application where users compete to mine digital currency, has rapidly attracted over 30 million users, making it one of the fastest cryptocurrency adoption cases ever.
The TON Foundation recently announced its incentive program, which rewards successful TON application development. We believe this will foster the potential for creating exciting new cryptographic mini-applications, which can attract mass participation.
TON unlocks many ways to earn, share, and grow businesses within the Telegram community. Fragment, a decentralized marketplace on the TON network, provides a platform for users to 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. And this is just the beginning. In the near future, the 730 billion Telegram stickers sent could potentially transform into NFTs. These NFTs will be available for purchase and sale on the TON blockchain.
Telegram integrates revenue sharing with content creators and channel owners through its Fragment platform, marking a shift from the traditional social media model and directly allowing these creators to benefit from their channel’s ad revenue. This way not only rewards creators for their content but also fosters a closer relationship between the platform and its users, promoting a fairer distribution of financial benefits within the digital ecosystem.
On April 19, 2024, Tether announced the deployment of its stablecoin USDt on the TON blockchain and Telegram Wallet. This development is a significant milestone for the cryptocurrency industry as it allows billions 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 enables transactions between two users at a fixed cost of approximately $0.10, which is 66% cheaper than other cryptocurrency payment platforms. Additionally, Telegram will provide built-in fiat on-ramps and off-ramps, including bank transfers and exchanges, further optimizing the user experience.
We believe that stablecoin payments on the Telegram Wallet are particularly crucial for individuals in developing countries who often lack access to banking services and are forced to use complex cryptocurrency user interfaces for storing and transferring funds. By deploying stablecoins on the TON network, cryptocurrencies are taking an important step towards realizing the vision of programmable peer-to-peer currencies and globally accessible decentralized financial systems.
We believe that the TON network is still in its early stages, and we are excited to see the adoption of its ecosystem and new features by the Telegram user base.
Telegram’s core embodies the spirit of cryptocurrency: a free and open network for everyone. Through TON, Telegram achieves a mutually beneficial relationship between scalable smart contract functionality and a powerful payment network, making breakthrough features that were not possible in the Web2 environment. Considering its massive user base, scalable infrastructure, thriving mini-application ecosystem, and native stablecoin transactions, TON taps into the potential of a user network with 9 billion active and highly engaged users.
At Pantera Capital, we are excited about this investment and look forward to supporting future builders in the TON ecosystem. If you share our passion and are developing and sharing on TON, please feel free to reach out to us.
