Telegram has had a troublesome time in current weeks. The messaging app’s founder, Pavel Durov, was arrested in France in late August on prices of operating an organization that aided within the distribution of kid sexual abuse materials, facilitating drug trafficking and arranged fraud, and has since been launched on €5 million bail. As anticipated, this has brought on the worth of the community’s cryptocurrency, Toncoin, to plummet by a 3rd.

However there was no gloom within the lengthy line of individuals ready to get into a celebration hosted by TON, a blockchain that runs on Telegram, on Seoul’s upscale Dosan-daero road final Wednesday. The truth is, builders, entrepreneurs, traders and different members within the blockchain ecosystem had been in a celebratory temper. Only a few hours earlier, TON had introduced at Korea Blockchain Week that it had surpassed 1 billion transactions on its blockchain.

Surprisingly, Durov's high-profile arrest turned out to be one thing of a boon for Telegram: the app's downloads skyrocketed instantly after his arrest, and TON's metrics additionally appeared to enhance.

“Final week, TON hit an all-time excessive in energetic customers and transactions, however truthfully, it was most likely one of many worst weeks ever for TON,” Jack Sales space, co-founder of TON Society, which manages the TON neighborhood, stated on the Korea Blockchain Week convention.

A fancy relationship

In concept, Durov’s place shouldn’t have a major impression on TON – Telegram and the TON Basis, which develops the blockchain, declare to be impartial entities – however the actuality is extra sophisticated.

Durov launched TON alongside his brother Nikolai Durov beneath Telegram, however the messaging app was pressured to desert blockchain after the U.S. Securities and Trade Fee sued Telegram for conducting a large-scale unregistered ICO. Since then, the app has tried to distance itself from TON, no less than by separating its company construction.

In the meantime, a gaggle of open supply builders and blockchain lovers based the Open Community Basis (TON Basis) to proceed the event of the blockchain. Since then, TON has spawned a number of organizations to help its burgeoning operations, together with the TON Society and The Open Platform (TOP), which created a TON-based cryptocurrency pockets that works with Telegram.

And to deal with issues that apps' disproportionate holdings of TON may undermine the community's decentralization, Durov introduced plans in February to “restrict Telegram's share of TON to roughly 10% of the full provide.”

Nonetheless, the truth that folks panicked and offered their Tokens speaks to the notion that TON and Telegram are carefully associated and, to some extent, interdependent. An individual who goes by the title Minho instructed me at Korea Blockchain Week that he had been shopping for extra TON since Durov’s arrest, within the hope that “the worth will get well after his launch.”

Operationally, Telegram's ambitions to develop into a brilliant app like WeChat additionally rely closely on the success of TON. To draw third-party builders, Telegram wants not solely the appropriate tech stack, but additionally a robust fee community to help in-app commerce. Nonetheless, as an alternative of utilizing a fiat foreign money system, it can go for cryptocurrency.

“Once you’re tying your ecosystem to the success of the Telegram platform, naturally when that’s referred to as into query, folks begin to marvel what’s going to occur,” Sales space stated. Nonetheless, Sales space careworn that as a result of TON is a blockchain community, it has sufficient independence to outlive with out Telegram.

“On the finish of the day, the TON ecosystem simply makes use of Telegram as a front-end expertise. The app additionally works on the web site, so even when the worst case situation of Telegram shutting down happens, TON will nonetheless be viable,” he stated.

Optimism Abounds

One billion transactions seems like a giant quantity, however how huge is TON, actually? Decentralized networks are sometimes tracked by completely different events and measured by completely different metrics, making it arduous to check on-chain exercise. However to place it in perspective, TON had 14.6 million day by day transactions as of September tenth. That's about 40% of the “non-voting” transactions of Solana, a extra established blockchain that’s presently the fifth-largest by market cap. Toncoin is tenth by market cap.

Nonetheless, the full quantity locked in TON is simply $408 million, in keeping with DefiLama, roughly 8% of Solana’s present worth of $4.77 billion.

These figures are in step with Sales space's assertion that TON's present growth is being pushed by a handful of viral “tap-to-earn” video games that reward customers with in-game belongings with the press of a button, and gamers then commerce these belongings on exchanges that settle for them. In the meantime, Solana has attracted way more capital because of a vibrant and rather more various decentralized finance (DeFi) ecosystem.

Based on Sales space, one TON-based recreation, Hamster Kombat, by which gamers role-play because the CEO of a cryptocurrency change, has reached 250 million month-to-month energetic customers. Whereas these numbers are spectacular, they shouldn’t be taken with a pinch of salt, because the “tap-to-earn” mechanic used within the recreation is kind of boring by fashionable online game requirements, elevating official questions concerning the longevity of such video games.

However for TON, and by extension Telegram, the worth of clicker video games lies of their means to get customers onto Web3 with a number of faucets (and preserve them there with monetary incentives), Sales space stated in his speech. It's additionally vital to notice that to play Web3 video games, customers should soar by means of quite a few hoops first: they need to obtain an app, arrange a cryptocurrency pockets, and preserve an extended pockets passkey protected. So something that makes issues simpler is more likely to be a constructive.

That's to not say the studio isn't making an attempt to create extra subtle titles for TON. One such title, Catizen, permits gamers to handle and optimize a herd of cats and has attracted 30 million month-to-month customers, greater than 2 million of whom are energetic on the blockchain, Tim Wong, chairman of the Catizen Basis, instructed currencyjournals. In lower than six months, the sport has generated $21 million in income.

“Most Web3 video games purchase customers with out producing in-game income,” Wong stated. “The mini-game ecosystem is already effectively established on WeChat and is simply beginning on Telegram. We consider that human need for high quality gameplay and the will to spend cash on leisure are common.”

Given the fees towards Durov and Telegram’s frequent appearances in reference to dangerous information, we might not see a surge in TONCoin anytime quickly. However as is usually the case with crypto tasks, there’s a honest quantity of enthusiasm and optimism on show right here. Roy Chen, a Denmark-based developer of the TON-powered console-inspired title HypeSaints, famous that the primary impression of Durov’s arrest is on TONCoin’s worth, not the ecosystem itself:

“In any case, because of Telegram’s 950 million customers, the potential for mass adoption of cryptocurrencies by means of TON is big,” he stated.