How long will TON remain popular?

Original title: Apps on the TON Blockchain Have Become Extremely Popular. Is It Sustainable?
Original source: Unchained

Original translation: Ismay, BlockBeats

 

Editor's note: This episode invites Alena Shmalko, head of ecosystem at the TON Foundation, and Jack Booth, marketing director at the TON Foundation, to discuss the current status and future prospects of TON. The two talked about how the open league helped TON increase TVL and other key metrics, and how Telegram's cooperation with TON has evolved and deepened over time.

In addition, the discussion also touched on the mechanism of Notcoin and the reasons for its success, and whether the rise of games like Hamster Kombat can be sustained. The importance of USDT in the TON ecosystem and its contribution to the growth of TVL were also highlighted. Jack mentioned the upcoming Bitcoin trustless bridge and explained its possible importance and whether TON has plans to integrate with applications other than Telegram.

 

TL;DR

 

1. TON was originally created by the Telegram team, but Telegram separated from TON after a legal dispute with the SEC. Since then, TON has been managed by an independent team of developers and has attracted a large number of users and attention through the promotion of gamification mechanisms and reward programs.

 

2. Although the cooperation between Telegram and TON has been limited, the relationship between the two has gradually become closer over time, especially in terms of Mini Apps and wallet integration launched on Telegram. However, TON still operates independently, and users in some countries cannot use the TON wallet.

 

3. TON is exploring the possibility of integrating with applications other than Telegram to expand its user base and application scenarios.

 

4. Notcoin uses the game mechanism of Tap To Earn and quickly attracts a large number of users through viral communication and recommendation systems. In addition, its reward mechanism stimulates user interest and participation. Although these games have successfully attracted a large number of users in the short term, the long-term user retention rate and the continued popularity of the game still need to be observed.

 

5. USDT plays an important role in the TON ecosystem, providing a stable digital dollar option that enables users to make fast and free payments around the world.

 

6. The Bitcoin Trustless Bridge is expected to be launched this year. Its importance lies in introducing a trustless Bitcoin asset to TON's DeFi ecosystem, increasing the diversity of users and assets.

 

7. The TON Foundation plans to continue to increase TVL by rewarding liquidity providers and developers, introducing new DeFi products and use cases, and expanding community participation. The Foundation is also studying how to reduce the reliance of rewards on TVL to ensure the long-term stable development of the ecosystem.

 

The following is the original content:

 

Ton's Origin and Milestones

 

Laura Shin: Today's topic is the recent rise of TON, and we have invited Alena Shmalko, Ecosystem Director of the TON Foundation, and Jack Booth, Marketing Director, to discuss this topic. Welcome Alena and Jack.

 

Jack Booth: Hey, it's great to be here. Thank you for inviting us, Laura.

 

Alena Shmalko: Yes, totally agree.

 

Laura Shin: The Open Network, also known as TON, has been performing strongly since the end of February. Its TVL has grown 34x, currently around $750 million, and its price has also increased from around $2 to around $7 at the time of this writing, with the number of daily active addresses in May and June even surpassing Ethereum. And there are a lot of interesting games like Hamster Kombat and Catizen that are gaining traction. In addition, Pantera Capital, a well-known crypto VC, announced its largest investment ever in TON. But before we dive into these latest developments, why don’t we talk about your background. Alena, you talk about your role and how you came to TON, and then we’ll hear Jack’s story.

 

Alena Shmalko: Yes, I’d love to. First of all, thank you very much for having us, it’s a pleasure. Talking about myself, I have a few years of experience in the crypto space, initially involved in a few startups, in some operational roles, and later I started running my own Web3 startup accelerator. It was during this process that I became connected with TON, as I had the opportunity to learn about cryptocurrencies at a broad and high level, engaging with different blockchains and ecosystems. Therefore, I chose TON because, in my opinion, it has the greatest potential among all other L1 and L2, and that is why I joined this ecosystem and now I am the head of the ecosystem responsible for supporting startups building on TON.

 

Laura Shin: What about you, Jack?

 

Jack Booth: I am the Chief Marketing Officer of the TON Foundation. I have been working in marketing for many years. In 2020, I was working for a startup in the UK when the pandemic hit and I lost my job and received a government grant. I invested this money in Bitcoin and had a very interesting crypto journey. At that time, this small investment doubled in a few months. I thought, what a magical world, so I decided to develop a career in crypto from 2020, first working at Oasis Protocol and then joining TON a few years later.

 

I am very happy to work at TON and very satisfied with the development of the ecosystem. What we are seeing now is that many games are allowing new users to obtain cryptocurrencies for the first time through tap-to-earn games. It reminds me of how I felt when I first got into crypto, when I bought my first Bitcoin in 2020, and when you first own a little bit of cryptocurrency, you start to understand what it means, why it's important, why it's an interesting thing.

 

It's not something you can easily explain to someone, and I think that's what TON and our ecosystem really contributes to the whole space, by giving people some initial cryptocurrency, they start to get interested and excited and start to understand what ownership on the blockchain really means. That's exciting for me, and it's exciting for the millions of people who are playing these games right now. That's my background and why I'm so excited to work here.

 

Laura Shin: So let's talk a little bit more about the origin story of TON. TON was launched by the company behind the messaging app Telegram, who did a $1.7 billion ICO in 2018. However, most of our listeners probably know the story: In 2019, the SEC obtained a temporary restraining order preventing Telegram from selling or distributing the tokens that were originally planned to be called GRAMs, and subsequent court battles with the SEC also failed. So, the end result was that Telegram parted ways with this blockchain, but a group of developers decided to launch their own blockchain in March 2020. So, can you tell us about the progress of that effort and how TON got to where it is today?

 

Jack Booth: Yes, of course. Several of that group of developers won a competition to obtain the keys to the open source software that was then called Telegram Open Network. That network was completely different from what it is today, and those developers grew it to the high-capacity, high-scalability state it is today, which was not available when they took over.

 

The initial two developers formed a loose group called NewTON, who attracted other developers who were passionate about building TON and became core developers. Then in 2022 the TON Foundation was officially launched, and it's been a period of growth since then.

 

With the launch of the TON Foundation, we established a partnership with Telegram, and their decision to continue building on TON because of the great work done by the core developers has really been a catalyst for TON's growth.

 

Our integration with Telegram's internal wallet means you can send crypto as easily as sending a text message in a DM, you can send TON, Bitcoin, USDT, and now Notcoin, and it's instantly and for free using the wallet within Telegram, which is integrated into Telegram's settings menu and is now available in all countries where Telegram users are located outside of the US.

 

In the next few years, most Telegram users will have a TON Wallet in their Telegram menu, which is a transformative collaboration for us and the entire ecosystem, and this is our first milestone.

 

The second milestone was the launch of Notcoin at the beginning of this year. Notcoin was launched globally on New Year's Eve and grew rapidly, reaching 20 million users in the first month. This made us really understand, and the entire market understood, that Telegram's distribution power is real.

 

This integration attracted attention because it introduced millions of people to the crypto space. Although Notcoin was not exactly a cryptocurrency during its mining phase, it got people interested in the concept of earning some kind of yield through a simple mechanism that could potentially pay off in the future.

 

The third milestone I want to mention is the launch of Open League in March of this year. Open League is a major catalyst for the growth of our on-chain metrics. It is a competition between the best projects on TON, providing rewards for projects that acquire new users and users who use them. This is a great competitive project and one of the results of Alena and I working closely together over the past six months. It currently accounts for about 60% of TON's daily active wallets and is a great contributor to the growth of our chain.

 

Laura Shin: Okay, Alena, do you have anything to add?

 

Alena Shmalko: The current role of the TON Foundation is mainly to support this growth, especially to support founders and builders in our ecosystem. As Jack said, from the initial core development team, we have grown to now include different people from the business field, such as the marketing team, which is also responsible for promoting the blockchain brand. But our main task is definitely to further enhance and support this growth through the various tools, projects and initiatives we launch for teams building on the chain.

 

Speaking of Open League, this is an important project in the current ecosystem. It contributes about 60% in terms of on-chain users and about 15% in terms of TVL, which is, as you mentioned, growing very rapidly.

 

Open League is an open competition for TON teams, and the cool thing is that you don’t need years of development experience, just build a Telegram Mini App on TON, immediately implement some on-chain mechanisms, join the leaderboard and win big prizes.

 

These awards are distributed directly to the teams on a quarterly basis, and a quarter usually lasts about two to four weeks, and at the end of the season, the teams receive these awards, which are similar to a grant that can be used for marketing, product development, or airdrops for the community, which is amazing and something we haven't seen in any other ecosystem. These awards are set up for major contributors to the growth of the ecosystem, and really come from projects that we build with us, and that we support.

 

In addition to this, we have also launched incentive programs for LPs on DEXs such as STON.fi and DeDust. LPs will be rewarded for staking Jettons (ERC-20 standard tokens on TON) and Toncoin into the pool.

 

In addition, we also have an amazing project after the launch of native USDT on TON, which is almost the largest contributor to the growth of TVL. We are very excited about the future growth, and now our task is to maintain this growth and direct this value and liquidity to a variety of different initiatives and projects.

 

Ton Foundation and its relationship with Telegram

 

Laura Shin: Before we dive into the changes in the past few months, I would also like to get some details about the foundation. Who are the main members of the TON Foundation? How did they get to their current position?

 

Jack Booth: The main members include Steve Yun, who is the chairman of the foundation. In fact, he was one of the early community members of TON and was involved even before the SEC's issues arose. Therefore, he has been pushing for the establishment of an official non-profit foundation from the beginning, bringing together core developers, and starting to recruit on the growth side, such as Alena's team, including ecosystem development, developer relations, and my marketing and business development team.

 

There are five directors now, I am one of them, and I am responsible for the marketing side. Our mission is to achieve the goal of the TON ecosystem, which is to enable everyone to own cryptocurrency. We have a very ambitious goal to get 500 million Telegram users on the blockchain by 2028.

 

Laura Shin: What is the current number of Telegram users?

 

Alena Shmalko: 900 million users per month.

 

Jack Booth: Yes, so we hope to convert 30% of Telegram's monthly active users to TON users by 2028.

 

Alena Shmalko: And we also expect the number of Telegram's monthly active users to grow.

 

Laura Shin: I want to ask more about the relationship with Telegram. As we just mentioned, TON was originally started by Telegram, and then because of the SEC's action, TON evolved into an independent project. However, last September, Telegram chose TON as the only crypto network built into its application. How did this happen?

 

Jack Booth: Telegram had actually been developing on TON before this. They bought fragment.com, which is a major use case for TON. This is the platform where you can buy social media usernames as NFTs for the first time and actually own and use them. They had built this platform and saw its success, netting $150 million in NFT username sales. It was a very successful project, and then they naturally started to work more with the TON Foundation and the TON Blockchain to try to build a close relationship that would benefit both parties.

 

For Telegram, it helps them because we are helping them grow the Mini Apps ecosystem.

 

Telegram has an open third-party Mini Apps program, and anyone can come and build a Telegram Mini App. And for us, this helps the distribution of our project, because our current project is building Telegram Mini Apps, and these applications are now distributed to the Telegram user base at scale.

 

Pavel Durov announced a few days ago in his channel that they are going to create an app store inside Telegram and promote Web3 apps for TON. We are very excited about this, we don't know the details yet, but my guess is that it will be part of the main UI where you can find apps, Mini Apps, and use them directly inside Telegram.

 

Nikolai Durov and Pavel Durov are the creators of the TON whitepaper, and the technology has come a long way since then. They used it to launch the Fragment app, which was a huge success in terms of revenue, then they integrated the wallet, and now they are continuing this collaboration to try to integrate more ways for the blockchain to actually interact with the Telegram app.

 

Telegram also uses TON for creator payments, you can advertise on Telegram by paying TON, and then the owner of the Telegram channel also gets paid in TON, and 50% of the advertising revenue goes to the creator.

 

Telegram is looking at multiple ways to work with TON, we are not directly involved in their decisions on how to work together, they are more like third-party developers. In fact, the only part we really work with is the wallet integration, and we jointly decide how it looks and works.

 

Laura Shin: From what I understand, Toncoin seems to be the largest asset on Telegram's balance sheet, what percentage of Toncoin do they hold? How much do Pavel and Nikolai Durov hold?

 

Jack Booth: I don't know much about this question, so I can't really comment or answer the specific amount, I don't want to say it wrong.

 

Laura Shin: Okay, but even if you work on this decentralized network, because it is focused on this specific application, you mentioned that you are mainly responsible for the wallet, but there are no other integration points or cooperation. In this case, it feels like there should be fairly regular communication and cooperation?

 

Jack Booth: Actually not.

 

Alena Shmalko: Yes, we got most of our news from Durov's channel like everyone else, right Jack, we just follow his channel and learn something new.

 

Jack Booth: Yes, it is. For example, the news that they use Toncoin as a payment for the advertising platform, I also learned about it from Pavel's channel.

 

This is huge news, we had no idea about it beforehand, no one knew about it. They didn't discuss anything with us at all, in fact they only communicated with the wallet team because the wallet is the only real integration point. And that's not our team, that's a completely different company called TOP (The Open Platform), they are responsible for running the wallet, running one of the DEXs on TON, STON.fi, and many other great TON projects that TOP has invested in and built.

 

So to be honest, as a foundation, we didn't get a lot of information from Telegram. Even when Pavel announced USDT on TON at the TOKEN2049 conference, we knew it was going to happen, but we didn't know that he would announce that Telegram stickers would also be on the TON blockchain, and other things he mentioned at the conference.

 

So, while there is collaboration, it's mainly on the wallet side, not on our side of the foundation, they are more like third-party developers.

 

Alena Shmalko: I would like to add that I actually counted the number of times Pavel mentioned TON at the TOKEN2049 conference, and that was also a complete surprise. Although we knew that USDT would be available on TON, the other news was a complete surprise. And Jack mentioned the upcoming app store, which we don't have any details on.

 

There is also a separate team building the Telegram App Center, which they have been doing for more than a year, and it is now the main catalog of TON applications, not only Web3 applications, but also Web2 applications. Now it is still the main way to discover different applications on TON, and we certainly strongly recommend exploring it.

 

One more thing to add is that Telegram Mini Apps are still the main way to integrate different Web3 elements into the messaging application.

 

We also learned that Telegram stars is a new in-app purchase method, and Web2 developers are now able to learn more about cryptocurrency by withdrawing their income as Toncoin. They let users pay with Telegram stars, but developers withdraw their income in Toncoin, which is like the revenue sharing for community creators and channel owners mentioned by Jack, and is a way to guide more people into the crypto field.

 

Laura Shin: Hearing you say that, it reminds me of the relationship between Ethereum and Consensys. But the difference is that you are more like Cosmos, and then there are a lot of things like app chains. But I have another question, right now the TON blockchain is very focused on the Telegram platform, but do you have plans to integrate into other applications?

 

Jack Booth: That's a good question, do other chains have plans to integrate into other things besides Google Chrome extensions? What is the difference? Telegram is an open platform with millions of users, and Google Chrome is also an open platform with millions of users.

 

So we chose and pursued a strategy of putting our application frontend in a messaging app, which is here to stay. We hope that Telegram will continue to grow, just like other chains rely on Google Chrome and Chrome extensions as platforms for their frontends.

 

We want to put our applications in a place where they can be easily shared, so that these applications can become very viral and easy to use. Telegram's Mini Apps platform makes this very easy to do. So we encourage projects to launch there as the primary interface to interact with the blockchain in the Telegram Mini App, which doesn't mean they can't create a website.

 

The DEXs we have now, like STON.fi and DeDust, they all have Mini Apps, but they also have websites that can be accessed through any web browser, so I think it's more of a platform choice question, I wouldn't say that this makes TON centralized by relying on Telegram because it's just another interface that can show apps.

 

This makes the job of app developers easier because they don't have to develop a full app themselves and then have users download it. Instead you just click a button in Telegram and the Mini App pops up and the user can start using it immediately without having to download anything and without leaving the Telegram app itself.

 

We made these choices and strategic design decisions because of the user onboarding challenges that cryptocurrencies face. It’s too hard to get people to set up an exchange account, fund it with their bank account, then install a Chrome extension, fund their wallet with their exchange account, and then start participating in blockchain and learning the different steps and nuances of each chain.

 

With TON these problems don’t exist. You can start using any app, you don’t need anything, and then you are educated step by step in the process, and eventually you create a wallet, which is created in two clicks in Telegram, and then it lives permanently in your settings menu.

 

By the end of the year, most users who have Telegram will already have a wallet in their settings menu, which makes the registration process very painless and adds virality to all apps, which is why we see so many users now using TON apps inside Telegram, because it is a better design decision.

 

Laura Shin: Yes, it does have the advantage of convenience. Although I am in the United States, I can also access some of these features.

 

Jack Booth: It’s a blessing.

 

What makes TON different

 

Laura Shin: Let’s talk about the TON blockchain, what features do you think make this blockchain different?

 

Alena Shmalko: I think it's very clear that it's distributed, which is what we've discussed today. Of course, TON is very scalable, thanks to its inherent architecture, and it's very fast, we set a speed record last fall.

 

Laura Shin: Yes, can you tell me more about the architecture and speed?

 

Alena Shmalko: Yes, thanks to sharding, which is a major element of the architecture, the TON blockchain is considered one of the most scalable, and we are also continuing to work on further improving scalability. Last fall, probably October or November, we set the fastest record, 100,000 transactions per second. Jack, please correct me if I'm wrong.

 

Jack Booth: 104,700 transactions per second, that's the highest record.

 

Alena Shmalko: This is done in an isolated environment, and we still need to improve this in the real environment. There are many teams working on this problem now, and as Jack said, TON's distribution capabilities are unparalleled, you can't find other places with so many people in one place at the same time. So we have 900 million monthly active users in one place, ready to enter the crypto space.

 

I want to go back to the previous question, Laura, you asked why we are so focused on Telegram, we are not asking every team in the TON ecosystem to focus only on Telegram Mini App. This can essentially be seen as an onboarding tool, where developers can build a Telegram Mini App to attract users on Telegram and then guide them to the web application in the original sense, because all of our DeFi protocols, including DEX, originally started as web applications, and they continue to work in this area because people are used to participating in DeFi using browsers, not through Telegram Mini Apps.

 

There is a new example of BLUM, which is a hybrid trading platform that builds cross-chain, multi-chain products, focusing mainly on TON, and they are now attracting users through a very simple click game. There is no core functionality in this application yet, but they have introduced millions of users to the Mini App through a very simple, easy-to-use mechanism. Then they will educate these users and guide them into more complex areas such as trading on the chain, cross-chain swaps, and so on.

 

Ton's Mini Games Ecosystem and Conversion

 

Laura Shin: So now let's talk about these Mini Apps, or games, because that's what's all the buzz on Telegram. The first game that you mentioned that really became popular is Notcoin, which is a click game. But for those who are not as familiar, especially in the United States because we don't have full access to everything, please explain how the Notcoin game works and why you think it became popular.

 

Jack Booth: This is one of my favorite topics because Notcoin did a great job. The reason it became popular is very simple, it's viral mechanism. They have a referral system and an incentive mechanism from the beginning. If you can master these two concepts as an application and promote it on Telegram, you will find that there are tens of thousands of users.

 

I say this without a doubt, it's all because of the referral mechanism in Telegram. The referral process for Notcoin is very simple, I go into the app, go to the My Friends tab, click Share with Friends, and then I can select my entire contact list and they will receive a referral link which will earn me Notcoin at the time.

 

Now, all the tap-to-earn projects have copied this referral mechanism. It's very powerful because the friend who receives that link can jump right into the game with just one click. No wallet to deal with, no setting up anything, no new apps to download, everything opens up instantly.

 

The virality is the first element, and then the incentives. Another project that's bigger than Notcoin is called Hamster Kombat, where you're the CEO of your own cryptocurrency exchange.

 

What's different from Notcoin is that in addition to tap-to-earn, they also included a tap-to-earn mechanism where you can use those coins to buy things that are profitable every hour. The airdrop of HMSTR tokens will be based on hourly profits, which is interesting, it's more of an engagement measure, how engaged you are in the game, your hourly profits are basically reflected in that.

 

In Telegram Mini Apps, virality and incentives are key. If you can introduce these mechanisms in a simple, fun way that keeps people engaged and coming back every day, then your app will reach millions of users. This is very simple and has been proven 10 or 15 times by different projects.

 

Laura Shin: I wanted to ask you about the quality of these users, because to be honest, this viral referral mechanism reminds me of FarmVille on Facebook in the old days.

 

Jack Booth: Yes, I played FarmVille before.

 

Laura Shin: Right? The game was very popular on Facebook at the time and the mechanism was very similar. But in this case, Notcoin seems to attract a lot of users who don't necessarily stay for a long time or don't play very often. Similarly, Hamster Kombat attracted 200 million users in the first three months, and the team hopes to record this achievement in the Guinness World Records, and its YouTube channel gained more than 10 million subscribers in a week and currently has 34 million subscribers. But from what I understand, this is largely to earn tokens, and users need to watch these videos. So this reminds me of the question we see over and over again: Are these users loyal or are they just "mercenaries" chasing short-term benefits, and if there is a better incentive, will they leave immediately? What do you think about this?

 

Jack Booth: I can answer this and then let Alena continue. Projects have two choices, they can launch the project and then expect users to join automatically, or they can build a community first and then work hard to convert and retain these community users.

 

The TON project chose the latter, while most Web3 projects tried and chose the former, but were not necessarily successful in attracting mass users.

 

This is a different strategy, building a community around incentives first, which is different from the airdrops of the past. In the past, in order to qualify for the airdrop, you needed to take a series of steps, such as opening an account, getting the Chrome extension, etc. This approach saves those steps and you can directly do something valuable for the project.

 

Take Hamster Kombat as an example. They designed a system to attract people to subscribe to them on YouTube. What's in it for them? Obviously, this brought in hundreds of thousands or even millions of dollars in advertising revenue.

 

So the great thing that happened here is that the community was built first, and they were full of great interest and anticipation for the project, especially after the mining phase. The mining phase is only part of the launch, and unlike many crypto projects that have high fully diluted valuations and low circulation, most of the tokens here are airdropped to the community at the beginning, and then the community decides whether they like the token and the project.

 

Notcoin has transformed into providing traffic for new projects, and projects have to buy this traffic with Notcoins, so Notcoin now has utility in itself, and other projects may choose the traffic route, or they may choose a completely different route.

 

For example, BLUM, which Alena mentioned, is a completely different case because they have delivered a product roadmap, and the click-to-earn phase they have stated is a phase, and after that they will become a trading platform. As for the utility of the token they provide, it is not clear at this time, but they have chosen to build an amazing community, I can't remember the exact number of BLUM players, but I think it is about 30 million people...

 

Laura Shin: A lot of people speculate that a significant portion of these users are bots, in this case, do you think this is real activity?

 

Alena Shmalko: I can answer this question. According to official statistics, such as the statistics recently released by the Notcoin team, they announced that more than 30 million people played the game before the TGE and the token listing, 35 million to be exact, and 11 million people received Notcoin, either in an on-chain or off-chain account. Now Notcoin has more than 2.4 million on-chain holders, so the conversion rate from off-chain players to on-chain holders is about 6%.

 

Laura Shin: Sorry, did you say 6%?

 

Alena Shmalko: Yes, if we count the 2.4 million people who hold Notcoin now, then about a third of the 11 million people who have received Notcoin overall are receiving it on-chain and off-chain, so the conversion rate is about a third, which is 30%.

 

Laura Shin: Or if you count from 11 million to 2.4 million, it might be 20%.

 

Alena Shmalko: No, no. A third of the 11 million are receiving it on-chain and off-chain, because Notcoin is listed on multiple centralized exchanges, and people can transfer it from the game to their accounts on the exchanges. So 11 million people, we can say a conversion rate of one third, which is a pretty good conversion rate.

 

Another example is Catizen, one of the most successful and popular play-to-earn airdrop games, which is not just a clicker game, but has implemented on-chain mechanics from the very beginning.

 

Unlike Notcoin, which was implemented on-chain after the TGE, Catizen was an on-chain game from the very beginning. According to an article by CoinDesk, their conversion rate is around 6% to 7%, which is much higher than the market average, proving once again that games on TON can do it even before the TGE and token launch.

 

Based on these numbers, we are doing well. Of course, there is still a lot of room for improvement. But it all depends on how the teams set and design their complex roadmaps and show the community that they will continue to build interesting and entertaining games after the TGE is over, or launch a trading bot, task platform or e-commerce platform, just like Catizen plans to do.

 

We at the TON Foundation and others in the ecosystem are also committed to supporting them, Open League is a great example as we reward users for participating in other products and protocols in the ecosystem. For example, players of Notcoin, Gamey or Catizen can now go to the DEX to earn a lot of rewards and points.

 

It’s amazing that we’ve attracted such a large audience and caused a lot of buzz in the Web3 space, but we need to understand how to sustain this growth, which is what we’re currently working on.

 

Laura Shin: USDT went live on TON in April, and now there is $730 million worth of Tether on the TON blockchain, how is it being used here?

 

Jack Booth: Before we get into that, I want to give you a general overview, which is a conversion funnel.

 

The funnel is to convert Web2 users, people who don't care about crypto, into Web3 users. I think this is what most blockchains and people in the space are trying to do in their own way.

 

We start from the most basic principles, if there is a potential market of 900 million users, we want them to do some on-chain activities, but we can't force them to do it, we need to guide them. So, click-to-earn is an easy way to get people involved, get interested, and put some crypto in their pockets through airdrops.

 

As I said at the beginning, now I am a holder of a token, a holder of a project, and I am interested and excited about it. And then we have Open League, which is the next step... Or, before Open League, we had USDT, which is now a digital dollar, which I can send to anyone in a private message for free and instantly around the world. It's a global product, and if I have their Telegram, I can pay anyone with it.

 

Laura Shin: When you say global, does that include the United States?

 

Jack Booth: No, it does not include the United States.

 

Alena Shmalko: I mean through the Telegram wallet, which does not include the United States, but you can use USDT on the chain, through any browser extension, such as Tonkeeper, MyTonWallet, Tonhub, etc., self-custodial wallets, on the TON chain.

 

Laura Shin: I assume, I don't know if I understand it correctly, that the reason is that Telegram and TON have been affected by regulatory issues in the United States, especially the SEC, and if things change with the SEC, will that restriction be lifted?

 

Jack Booth: Of course. The problem is that Telegram and TON were affected by the SEC in the past, and no one wants this to happen again, so we are currently focusing on the rest of the world. If the environment and atmosphere in the United States changes, this issue may be reconsidered. But for now, the wallet integration within Telegram is not available to US users by default unless there is a major change in the regulatory attitude in the United States.

 

Alena Shmalko: It's not just the US, there are other countries that can't use this wallet, like sanctioned countries like North Korea. I want to add that just to be fair. One very important point though, Laura, you mentioned that you're in the US and can't access certain features. That's just referring to the wallet features. That's important. You can easily access any Telegram Mini App, like make purchases or participate in DeFi activities within Telegram Mini Apps, and you can easily use any self-custodial wallet on the TON chain. Just like using Metamask on Ethereum, this also works on other chains.

 

Laura Shin: Yes. So, Jack, continue to describe your conversion funnel.

 

Jack Booth: Oh, thank you for reminding me. The wallet experience in Telegram is great, it pops up in Telegram, you can store your Bitcoin, Notcoin, and USDT there, you can send these to friends around the world instantly for free, and it's a great first step for anyone to get started with crypto.

 

When you start with click-to-earn, you might not necessarily want to get involved in the complexity of DeFi, and the wallet in Telegram is the first step to get people started. Oh now I can send money to my friends in Telegram, it's super easy.

 

Then we have Open League, which is super easy to introduce to people. It's actually also in the self-custodial wallet in Telegram, and you can easily access the Open League pool through the Open League bot to start participating in providing liquidity for some of the projects in the Open League. And this is the last step, usually more participants. We have click-to-earn for everyone, and then some people can convert to sending crypto globally in private messages, which is very easy.

 

And then some people will start using more complex DeFi products on TON. So that's the whole setup, that's the whole system, and that's what we're trying to build. The strategy of the foundation is to help achieve this. We think this is the most effective route, and we see ways to optimize the entire funnel, and we work with community teams and contributors to achieve this, and we see it working. So we're excited to continue down that path.

 

Laura Shin: Yes, there's also an aspect about the trust bridge where users can cross-chain bridge Bitcoin to the TON network, and I'm wondering when you expect to release this feature, and I'm also curious about what will happen when Bitcoin holders can do this.

 

Jack Booth: Actually I don't know if I can reveal the release date, it's too early. But it will definitely come soon. I'm very excited about it because for me, this will be the next big asset after USDT and the next focus in the user pool after tap-to-earn.

 

We believe that Bitcoin can become a USDT-like asset in the TON ecosystem, it can grow very quickly, and we will do our best to help it achieve this. It is very valuable to the DeFi ecosystem inside TON because we suddenly have a Bitcoin asset that is 100% backed by a Bitcoin asset on the Bitcoin chain, which is bridged to TON through trust, and is basically a better version of Wrapped Bitcoin. This is a trustless version of Wrapped Bitcoin, which does not involve an intermediary between the Bitcoin network and the TON network. It uses the validators of the TON network itself to verify the Bitcoin ledger.

 

So no one holds the keys, everything is done through smart contracts. It's a completely trustless and transparent bridge, and unlike many other bridges on the market right now, it's basically as close to real Bitcoin as possible, but on the TON chain.

 

So I'm really looking forward to this bridge going live because it has huge potential for the DeFi ecosystem of TON to allow people to better utilize their Bitcoin through lending protocols, through the DEXs that we have, through liquidity pools, and even potentially more complex scenarios. So yes, this bridge is going to be live very soon, definitely this year. We're very excited about it.

 

Laura Shin: Yeah, it looks like there's a lot to look forward to for Bitcoin users because there's going to be new ways for them to use Bitcoin even within their ecosystem. I also wanted to ask about some of the illegal activity on TON that the Fortune article mentioned, which included channels selling everything from guns to drugs to stolen stimulus checks. There is a criminology professor quoted in the article who said, "It's easier to create a Telegram account than a Facebook account" and he also said, "Telegram is now a playground for criminals"

 

So, I'm wondering about the ad networks that we've talked about, where people can earn ad revenue for their content. That criminals on Telegram can also earn ad revenue for their content, and they can be paid in cryptocurrency, and they can also pay for illegal goods through the TON wallet. I'm wondering how the foundation views these issues and if there is any way to prevent or mitigate the TON network or TON wallet from being used for illegal activities.

 

Jack Booth: Yeah, I think that's a legitimate question, and it's a legitimate question that we need to address at some point. We're focused on how to bring Web3 to the masses, and that's all the focus of our team. As for issues like illegal activity, that happens on every chain. That's one possible use of blockchain, right? It can be used as a tool for illegal activity, and that's why we have great partners like Elliptic who help with criminal transaction AI analysis, looking for these types of wallets and providing them to the authorities, and working with the wallet team at Telegram to actually eliminate these activities.

 

On the foundation side, we work in a decentralized ecosystem, so we don't necessarily have control over what happens in any transaction on TON. TON itself is self-run, and these things happen there, and they are a problem, but it's actually the projects that enable that problem to stop the illegal activity from happening. If it's happening in a wallet, then it's up to the wallet team to deal with that, it's up to the compliance team at the wallet.

 

That's why Alena mentioned before, outside of the United States, there are other countries where users can't use the wallet, such as Iran and other sanctioned countries like North Korea, where there are no services and users can't use the wallet. So these are centralized teams that need to solve the problem, and for us, the Foundation, we just focus on supporting the construction of the Web3 ecosystem.

 

Alena Shmalko: Yes, as you said, it's always a joint effort of different independent teams, such as us as the TON Foundation, and then Telegram, who play a big role here. By the way, Telegram has never been formally accused, but people always pointed out that Telegram has this risk from the beginning.

 

And the wallet team and the project team can work with specific marketing and PR companies to run their advertising campaigns. Of course, their review team will never allow any advertising about illegal products. This is the responsibility of each team. And this is exactly the benefit of it, because there is no single actor responsible for ensuring that such activities never happen. It's a joint effort and we are certainly working hard to solve this problem.

 

TON’s Next Milestone

 

Laura Shin: TON has obviously made a lot of progress this year, and as we discussed, there are multiple ways that this flywheel effect has begun, so what is the next milestone you hope to reach?

 

Alena Shmalko: Yes, we have very clear and exciting milestones. We hope to reach $1 billion TVL by January 2025 and 100 million on-chain users and on-chain wallets by January of the same year. How do we achieve this in terms of TVL? Laura, you mentioned that our current TVL is over $740 million or so.

 

I didn't check today's data, but it's probably in that range. As I mentioned, this growth is obviously incentivized by the rewards we provide to liquidity providers on the DEX, especially after the launch of USDT. Because the returns are very attractive, we put a lot of effort into this program.

 

We will continue to reward users for holding their liquidity on-chain, while finding and coming up with new ways to bootstrap this liquidity, because the main incentive program cannot last forever, and the rewards and incentives will end at some point.

 

Our goal now is to create a very thriving and diverse DeFi environment where people see more opportunities to bootstrap their liquidity within the ecosystem, such as lending protocols, perp DEXs, DEXs, yield farms, liquidity staking, and more. We are working closely with existing and new teams on TON and just finished a hackathon where we attracted over 1,000 teams to participate.

 

Jack Booth: To be exact, over 1,200 teams applied to participate in the hackathon.

 

Alena Shmalko: Yes. A lot of complex DeFi products are coming online because our foundation is very good. In terms of DEXs, perp DEXs, and lending protocols, we have good coverage, but we definitely need more use cases. This is exactly the direction of Open League as a main initiative. We will continue to provide rewards, but we will do it very reasonably and learn from the experience of other chains, especially those that have experienced a big drop after attracting a lot of liquidity. So the main effort now is to make sure that this does not happen on the TON chain. Then there are a lot of community activities, Jack, can you introduce this part?

 

Jack Booth: Yes, now on the community side, we have TON Society, TON Society is our grassroots sports structure, a bit similar to the way sports are managed in the UK, you have some small regional teams, they work hard to find and cultivate talents to become athletes. Our idea is to cultivate projects in regions and places, hold events, let people participate and understand blockchain in local spaces, and do this in multiple regions around the world.

 

Currently TON Society has nine regions around the world and will be expanding to five more regions over the next six months. This means there will be more local events coming to people’s regions, which we hope will also lead to more decentralization. We hope that more leaders will be able to rise through the ladder of TON Society and eventually start their own projects or contribute independently to TON’s ecosystem goals.

 

TON Society is very important to us and it will be a core focus that we will invest a lot of time in the next six months. TON Society also organizes Open League hackathons and bootcamps. We will be doing a new round of bootcamps and hackathons in October. This hasn’t actually been announced yet, so this is a little spoiler for those who have stuck around. The last hackathon was a huge success. It’s great to see all these teams now contributing in the TON ecosystem.

 

Last Friday, 23 teams prepared and presented their projects, and they will have a chance to win a prize of $2 million. These teams will go directly from the hackathon into the Open League, and if they win in the Open League, they will start to receive rewards and attract users.

 

The Open League is really trying to attract users to new projects, which is very exciting for projects because we've seen the number of project token holders in the Open League increase by 13 to 15 times since it started in March. I think there were about 120,000 Jetton holders at the time.

 

Jetton is the token standard on TON, similar to ERC-20. Now, we have over 1.6 million Open League token holders, so the Open League is really a catalyst for attracting people to join and become users of new projects, which is very exciting, and it also increases competition in the ecosystem. These new teams from the TON Society will all go into the Open League and become major projects on TON.

 

We also have this path on the developer side. So we are not only building a foundation on the user side, but also working on the developer side, helping them transform from Web2 developers to Web3 developers on TON, which is also a focus of our community.