Co-authors: Andrea Chang, Partner, Oak Grove Ventures; Alan Cui, Product Advisor, Oak Grove Ventures
With Web3's rapid rise, integrating Web2 traffic has become critical to driving its success. As more projects seek to stand out in the blockchain space, leveraging existing Web2 platforms and their vast user bases has become the decisive factor in rapidly expanding their influence.
The intertwined growth model of Telegram and TON exemplifies this collaboration, showcasing how Web3 projects can effectively introduce Web2 traffic to drive ecosystem-wide prosperity. Behind the recent surge in mini-app users and revenue, in addition to TON's efforts, Telegram's evolution as a communication platform played a pivotal role. This partnership not only expands the use cases of Web3 but also provides rich growth potential for future innovative projects.
Ecosystem Overview
Telegram and TON (The Open Network) are independent entities but maintain close cooperation. Telegram provides TON with a large user base and social network effects, while TON brings Web3 functionalities and applications to Telegram. This synergy enables Telegram users to seamlessly access Web3 services, while TON projects can quickly acquire users. Native applications like Telegram Bots and Mini-apps combine Telegram's social network effects with TON's blockchain features, creating unique application scenarios.
Current Infrastructure
The core modules built by Telegram and TON can be divided into three categories based on their functionality:
- Traffic Growth: Telegram Channels + Ads
- User Interaction: Telegram Groups + Bots
- Application Deployment: Telegram Mini-apps + Apps Center + TON
While companies in the Web2 era used websites as their main storefront, Web3 companies prefer Twitter and Discord for frequent interactions and announcements with their communities. With Telegram’s recent improvements, especially the innovations in group functions, more and more fan interactions and announcements are now taking place on Telegram. Mini-apps are lowering the user acquisition barrier, with many projects using them as a first step to reach potential users.
Mini-apps: Since their launch, the usage of mini-apps has grown steadily. According to official TON data, by July 2024, around 500 million of Telegram's 950 million monthly active users were also mini-app users. Leading projects, such as Hamster Combat, accumulated 250 million users within four months. Previously, most popular mini-apps focused on gaming, but now there’s also growth in DeFi applications from hackathons.
Top 10 Telegram Channels Data
Source: Telemetrio
Decentralized Browser: In July 2024, Telegram introduced a decentralized browser, allowing users to open links within the Telegram app. This has significantly improved user retention and created opportunities for dApp development.
Mini Apps Store & Apps Center: Telegram has embedded the Mini-apps store and decentralized browser into its main communication platform, further lowering the barrier for Web3 products to cross over into Web2. Currently, over 5,000 mini-apps are available, covering a wide range of categories, from productivity tools to entertainment content.
Telegram Mini-Apps Store & Telegram Apps Center
Telegram Payment Modules: These parts include wallet and payment functionalities, with over 20 wallets supported, such as TonKeeper and the official Telegram Wallet. Telegram Wallet allows users to send USDT without fees, similar to how WeChat Red Packets work. In contrast, WhatsApp Pay supports such transfers in only a few countries.
Several payment gateways, such as CryptoPay and Alchemy Pay (https://ton.org/en/payments), have already partnered with Telegram.
Source: TON website
Telegram Ads Platform: Telegram Ads allows advertisers to sponsor messages in channels with over 1,000 subscribers. Advertisers can use TON tokens to pay for ads, making integrating Web3 elements into ad campaigns easier. Telegram also launched a revenue-sharing program, allowing channel owners to take up to 50% of the ad revenue.
Source: TON website
Building on this foundation, Telegram launched a creator revenue-sharing program in March of this year, allowing channel owners to set up to 50% revenue sharing.
Source: TON website
The Ambition of TON Memelandia: Becoming a Meme Incubator, Airdrops + Fair Launch
"The TON Foundation recognizes the importance of community tokens and meme coins. We firmly believe that creativity, engagement, and fun are key elements for community development."
TON Memelandia is a centralized platform launched by the TON Foundation specifically for meme coins. Its core goal is to promote these often-overlooked crypto projects into the mainstream market. Memelandia is not just a platform for token trading and showcasing but also rewards community participation through promotional activities such as The Open League, encouraging competition among projects to win rewards.
By creating a centralized platform, Memelandia provides these projects with an opportunity for exposure and growth, offering investors and enthusiasts valuable insights through rankings and key metrics (such as Total Value Locked (TVL), number of holders, DEX trading activity, and airdrop distribution). Additionally, Memelandia lowers the technical barriers, making creating and launching meme coins easier. Anyone can design and mint their project using no-code tools and open-source templates, thus encouraging the emergence of more innovative projects."
Source: TON website
The Synergy Play for Web2 and Web3
As the layout of core functions above, we know that Telegram’s support for the TON ecosystem is reflected in several key areas. First, with over 950 million monthly active users, Telegram provides TON with a vast user base. Telegram seamlessly brings users into the blockchain ecosystem through integrated features, driving rapid user growth for TON. Second, Telegram offers convenient access points, such as mini-apps and a built-in wallet, simplifying users' engagement process with Web3 applications and making it easy to use TON’s DeFi and gaming features. Telegram’s channels, groups, and bot functions also enhance cross-platform interactions and user engagement, increasing users’ participation in Web3 applications. Finally, Telegram’s Premium membership service and ad platform provide new payment scenarios for TON tokens, promoting Web2 users’ demand for Web3 tokens.
Driving Forces Behind Telegram + TON Ecosystem Growth
Looking closer at the recent growth, we can conclude the driving forces as below
- The Role of Gaming Companies: Web3 gaming companies have played a key role in ecosystem growth, leveraging Telegram’s social network effect and integrating simple game mechanics to lower user barriers. By combining Web3 elements like NFTs and tokens, they have increased user engagement. These companies primarily focus on casual games, which are easy to play, have high interaction frequencies, and monetize through virtual goods and NFTs.
- Telegram’s Strategic Adjustments: Since 2021, Telegram has made a series of adjustments to boost ecosystem growth, including:
- Telegram Premium: Launched in June 2022, this premium service increased user retention and platform revenue.
- Improved Group and Channel Functions: Features like group video calls and interactive stickers have increased user activity.
- Increased Integration with TON: Built-in Wallet and TON Space have lowered the threshold for users to access Web3 services, leading to greater usage.
These strategies had a significant impact on revenue figures. In 2023, Telegram successfully boosted revenue by enhancing the integration of its wallet and Premium services. Digital asset-related businesses, such as the "integrated wallet" and "collectible sales," accounted for 40% of total revenue, becoming the primary income source. The growing number of Premium service users contributed notably to the company's revenue. Through these strategic adjustments, Telegram's in-app revenue reached $11.66 million in early 2024, demonstrating the effectiveness of its diversified revenue model and leading to a more stable overall income.
Financial Report of Telegram
Source: Financial Times, CoinTelegraph
- Active Support from Developers: TON Foundation and third-party developers have actively contributed to building TON’s infrastructure, such as the TonKeeper wallet and StonFi exchange. Regular meetups and hackathons further enhance the developer community.
Points for Web3 projects to maximize Web2 exposure
Effectively leveraging Web2 traffic and user bases is critical to standing out in the fiercely competitive Web3 market. To maximize the value, we create some guidelines for builders and professionals.
Identifying the core functions needed by both Web2 and Web3 users: In the Telegram and TON ecosystem case, chat rooms, payment, and community tools are essential functions for users, whether using Web3 elements or not. These overlapping demands are the base of extended features that made the product/ ecosystem viral.
User-friendly features: After identifying the core functions needed, the extended ones can be built around them to make them user-friendly with good accessibility. Like Telegram’s built-in wallet and seamless payment integration, Web3 projects can drastically lower the entry threshold.
Community building & Retention: The extended features mentioned above should foster community formation and retention, encouraging users to remain active in the ecosystem. Channels, bots, community tools, and emojis make users want to return more.
Discover user demand specific to Web2 and Web3: While Web2 and Web3 users share core expectations, their advanced demands reveal distinct priorities that each group values more within their respective ecosystems. For instance, many Web3 users, mainly gamers and traders, place significant importance on the functionality and accessibility of mini-apps. Seamless integration of these features within the core product is crucial for directing traffic while maintaining a user-friendly interface.
Token economy tied to main products: By integrating tokens into platforms with real business value and high-frequency usage, such as advertising, payments, and reward systems, platforms can help each side understand the value. This practical usage drives wider token adoption and circulation.
Diversifying revenue models: Unlike Web2 projects, which often rely on singular revenue streams like ads and subscriptions, Web3 projects can diversify their revenue through multiple avenues. Decentralized finance (DeFi), NFTs, and DAOs provide various opportunities for offering value-added services while generating income.
Conclusion: The Opportunity and Challenge
By merging Web2's proven strategies with Web3's innovative technologies, projects can rapidly expand their influence and drive user growth. However, this integration requires higher standards in product management and user experience design than ever before. For experienced founders and product experts, this presents a unique opportunity to apply their skills in a more mature market while seizing the potential of Web3. It's a chance to put their expertise and hard work to the test, capitalizing on the new growth opportunities that Web3 offers.
Appendix: TON’s Next Growth Driver: DeFi
Besides gaming, decentralized finance (DeFi) on TON is steadily growing, with applications like decentralized exchanges (DEX), staking, lending, and liquidity mining gaining traction. The introduction of stablecoins and cross-chain functionality is attracting more capital and attention, showcasing strong growth potential.
Source: Tonstats
DEX: STON.fi and DeDust.io are two commonly used decentralized exchanges on TON. They provide low-fee, fast transactions. DeDust.io supports cross-chain transactions, allowing users to transfer assets between blockchains easily.
Source: STON.fi, Dedust
Blum is a hybrid cryptocurrency trading platform that combines CEX and DEX. Through @BlumCryptoBot, you can trade tokens and derivatives from primary and secondary markets in one place, including a trading bot with a built-in DEX.
Source: Blum
Stablecoins: In April 2024, Telegram CEO Pavel Durov announced the integration of USDT into the TON blockchain. Since then, TON has rapidly become a major player, with 730 million USDT issued on its blockchain by mid-2024.
According to real-time data from Tether's official website, 730 million USDT has been issued on the TON blockchain (doubling in one month), and its net circulation ranking has quickly reached 5th place.
Source: https://tether.to/en/transparency/?tab=usdt, as of 9/10/2024
In the TON staking ecosystem, the role of stablecoins is becoming increasingly important. Stakers can choose to receive rewards in the form of TON stablecoins, which not only helps to avoid the volatility risk of the crypto market but also provides users with a more stable source of income, enhancing the user experience.
The largest staking platform is Tonstakers, with a TVL (Total Value Locked) ranging between 150 million and 300 million USDT.
Source: DefiLlama, as of 9/10/2024
