The Open Network Blockchain Grows Along with Associated Firm Telegram

In the world of cryptocurrency, a project with ties to the popular messaging app Telegram has been making waves this year.

The Open Network (TON) blockchain, which is associated with Telegram Messenger LLP, has seen a notable surge in value even amidst a broader rally in the crypto sector, Bloomberg reported Friday (July 5).

With access to Telegram’s 900 million monthly active users, the assets locked on TON have skyrocketed by 1,400% this year, briefly surpassing $1 billion, according to the report.

This performance has reignited hopes that Telegram could become a “super-app” that encompasses social interactions, gaming and financial tools, the report said.

Investment firm Pantera Capital Management LP sees Telegram as the only major platform that can incorporate Web3 for an open blockchain network without regulatory hurdles, per the report.

Telegram was founded in 2013 by Russian brothers Pavel and Nikolai Durov. In 2018, the company raised $1.7 billion through an initial coin offering (ICO) to launch the “Telegram Open Network,” according to the report.

However, the project faced scrutiny from the U.S. Securities and Exchange Commission (SEC). In 2020, Telegram settled with the regulator, agreeing to return the ICO proceeds and pay an $18.5 million penalty, the report said.

Following the settlement, the TON Foundation emerged as a separate entity from both the Telegram Open Network and Telegram itself. However, some skeptics argue that TON is still heavily reliant on Telegram, and decisions made by the network’s operators are likely to align with Telegram’s interests, per the report.

Despite these concerns, Telegram announced in February that it would exclusively use the TON blockchain for payments related to a new ad-revenue sharing program. This move coincided with a significant increase in key metrics for the blockchain. The number of daily active users on TON has recently surpassed 350,000, according to TonStat data, according to the report.

As the world becomes more global and digital, instant payment solutions that transcend borders are becoming increasingly popular. Richard Galvin, co-founder and CEO of the crypto investment firm DACM, said in the report that he believes that these types of payment solutions are a “killer app.” DACM purchased TON tokens in a private round in early 2023.

At the same time, the growth of crypto apps faces challenges due to know your customer (KYC) and anti-money laundering (AML) checks, per the report. On June 3, TON implemented new KYC and AML checks, requiring users to provide their personal information to access key wallet features.

TON’s recent surge in assets on the blockchain can be attributed to the popularity of mini-apps, such as play-to-earn games like Hamster Kombat and Notcoin, according to the report. These apps have amassed millions of users and have contributed significantly to the blockchain’s growth. Additionally, a partnership with Tether, the stablecoin issuer, was announced in April and has boosted the usage of USDT on TON.

Looking ahead, industry experts predict that payments and remittances will become increasingly important use cases for TON. Cosmo Jiang, a portfolio manager at Pantera, believes that consumer-facing platforms underpinned by blockchain software will be the key growth area in crypto over the next three years, per the report.

TON, with its ambitious goal of capturing a third of Telegram’s user base by 2028, appears to be well-positioned to capitalize on this trend, the report said.