Recently, there has been a lot of hype about TON and Telegram, with many people believing that TON will be the next SOL or ETH. Blockworks Research published a post interpreting this, suggesting that TON’s future growth may be weak, disappointing many.
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Low user stickiness on Telegram
Incompatibility with EVM, low use of programming languages
Limited terminal market coverage
Overvalued FDV
Telegram has global influence, and its considerable daily active user (DAU) base could be directed towards TON. By this measure, Telegram is one of the most widely used applications globally.
According to data provided by Telegram, it is one of the most popular applications globally. With a total of 9 billion users, it ranks 8th among global applications.
However, when measured by DAU, the stickiness of Telegram users is overestimated.
The DAU/MAU ratio of various social applications in the following figure shows that while Telegram’s monthly active user (MAU) is high, the DAU is relatively low (between 55 million and 200 million, which is very low compared to competing applications), with a DAU/MAU ratio of only 15%.
In comparison, Facebook’s ratio is 69%, Wechat is about 67%, Instagram is 60%, TikTok (only in the US market) is 49%, and Twitter (X) is 45%. This indicates that Telegram’s market penetration is low, and the user base for profit is lower than market expectations.
PANews note: DAU/MAU ratio can measure user stickiness on websites or applications.
The TON ecosystem team will face challenges in the lack of EVM compatibility and the use of FunC (the native programming language of blockchain).
The Ton virtual machine (TVM) is incompatible with the Ethereum virtual machine (EVM) because TON adopts a completely different architecture (TON is asynchronous, while Ethereum is synchronous). Therefore, the TON ecosystem does not support development in Ethereum’s Solidity programming language.
According to a 2023 developer survey report (with over 90,000 developers participating), Rust is the most favored language, with over 80% of developers hoping to use it again next year. 46.4% of developers expect to use Solidity.
Currently, there are three programming languages available on TON: Fift, FunC, and Tact. Of these, FunC is the most commonly used language. Although FunC looks a lot like the C language, it is generally not well known or favored.
Much of the TON narrative growth is that Telegram will become the next WeChat. However, WeChat is blocked outside the US market, only serving the Chinese market.
In contrast, the current application market is dominated by financially strong tech giants with a well-established network effect, and Telegram’s largest market is in the dispersed markets of the Asia-Pacific region (excluding China and Eastern Europe), adding complexity for startups using Telegram for distribution.
Below are the annual download distribution of Telegram in 2022:
India: 104 million downloads.
Russia: 34 million downloads.
Indonesia: 27 million downloads.
USA: 26 million downloads.
Brazil: 21.94 million downloads.
Egypt: 14.85 million downloads.
Vietnam: 11.84 million downloads.
Mexico: 11.61 million downloads.
Ukraine: 10.76 million downloads.
Turkey: 9.79 million downloads.
Despite these realities, TON still has huge growth potential, with little safety margin for new investors.
The following figure shows that among all public chains, TON’s FDV is 8.6 times the network annualized DEX trading volume, ranking first and at the highest level.
In addition, the FDV is 927 times the network’s annualized fees, ranking high among all public chains.
Related reading:
Overview of 10 interactive new projects in the TON ecosystem
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