Telegram's crypto adoption story via TON may be its lasting mark in 2024 despite recent news leaving many with a negative impression, says Daniel Cawrey, a former CoinDesk journalist who is now chief strategy officer of Tonkeeper, a non-custody wallet app for The Open Network (TON) ecosystem.
Telegram’s long-standing ethos of openness and free speech, hence the paper plane as its logo, has landed the messaging platform and CEO Pavel Durov in legal trouble. Yet, it’s important to remember that the global digital freedom Telegram enables has now also boosted real crypto adoption.
Blink if you’ve missed it, but Web3 – the idea that users can have digital ownership powered by cryptography, blockchain and digital assets – is happening on Telegram, and in a major way. Web3 is now available on anyone’s smartphone. It’s a hugely positive development somewhat ignored by all the recent, mostly negative, news surrounding Telegram.
Crypto payments come alive
Telegram's use as an avenue for crypto adoption can be attributed to the rise of The Open Network (TON) blockchain. With over 950 million users, Telegram is one of the world’s most popular messaging apps and digital communities. TON's blockchain was brought back to life by its community after it had to contend with SEC enforcement back in 2020 - and it is now flourishing.
How is this happening? Telegram, a separate company from the protocol-level work being done by The Open Network Foundation, began to integrate TON’s blockchain into its app. The availability of Toncoin payments for in-app advertising and stablecoin integration first occurred back in April 2024.
The number of transactions on TON’s blockchain over the past six months. Source: TON Stat
Usage of TON’s blockchain, based on the number of transactions, has grown since these crypto-friendly features were added to Telegram. According to data aggregator TON Stat, since payments and stablecoins became available in April 2024, TON on-chain transactions have been above 3.5 million per day, on average.
Unpacking Web3
With Web3 technologies, cumbersome middlemen like banks have less of a constricting stranglehold on financial access, empowering anyone with a smartphone. This is what makes Web3 a powerful concept - it can enable many who might be financially underserved to have a seat at the table.
Telegram "mini-apps" – third-party software within the app itself - is a big driver of TON’s transaction activity. Users are interacting, competing and earning rewards for regular engagement in many mini-app games. This has been a significant driver of economic activity on TON. For example, a play-to-earn game called Lost Dogs contributed to the spike of over 13.5 million transactions (shown in the chart above) that occurred at the end of August.
This isn’t classic crypto airdrop hunters or mercenary capital participating. It’s mostly ordinary users accessing games because they want to – because they’re fun. Admittedly, games like Lost Dogs may not be revolutionary. But the engagement some of these are games experiencing, in the millions, is primary proof Web3 has arrived – and Telegram is a conduit.
TON is capable of higher throughput than most blockchains thanks to a unique design that uses “workchains” to process a high number of transactions. But during the Lost Dogs airdrop of its DOGS token, validators on TON using older hardware struggled to keep up, leading to two outages. This has provided insight into the load (and revamped validator rules for TON) required to onboard large quantities of consumers backed by a consensus blockchain system.
Mass adoption is not without its own set of problems for scaling crypto, and those who have been working in the industry for some time have long been aware of this. Technically scaling crypto to millions upon millions of users has largely been stymied for user growth – until Telegram and TON.
Telegram natives to crypto natives
Games like Lost Dogs, Hamster Kombat and the Elon Musk-themed X Empire within the Telegram ecosystem are onboarding millions to crypto. Many users don’t realize it or even care. Getting people’s attention via gaming isn’t revolutionary. But Telegram games are a source for mass adoption without having to onboard heavy crypto concepts at the start. Most of the world simply does not care a lick about brain-fuzzy intricacies like private keys, paying for gas and staking.
And that's fine, because mini-app users predominantly aren’t crypto natives - rather, they’re Telegram natives. These users talk to their friends on Telegram, stay updated with topics they like via groups and they play mini-app games on their phone. Then, the rewards stage "airdrop" arrives for these popular games and users are distributed what they have earned. DOGS, for example, now has a tail-wagging market capitalization of over $500 million according to CoinGecko.
