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Could Telegram’s TON Blockchain be the “next Solana” and successfully challenge Ethereum?
Despite lagging behind Solana, TON’s daily active addresses have surpassed Ethereum’s figures every day except one so far in June. Some believe that TON could close the gap in market capitalization with Solana.
Published June 12, 2024 at 5:09 pm EST.
The Blockchain Open Network (TON) is showing signs that it could be the next Solana as it challenges historic smart contract leader Ethereum.
Boosted by Telegram’s crypto wallet built into every app and rampant mini-game play, the TON blockchain surpassed Ethereum in daily active addresses on every day in June except one, a sign of growing popularity for the network connected to Telegram, the popular service messaging application with over 900 million monthly active users.
According to the blockchain analytics firm ArtemisTON recorded an average of 465,200 daily active addresses in June with a high of 568,300 on June 3, levels that Ethereum has not yet surpassed as the latter has yet to see more than 400,000 daily active addresses on its base level in the month , excluding its various levels 2. .
“We believe that for early ecosystems like TON [daily active users] is a better metric to keep an eye on than [total value locked] or commissions, as collecting users is a higher priority than making money,” wrote Kelly Ye, portfolio manager at liquid venture firm Decentral Park Capital, in his weekly newsletter published May 20.
Despite having higher levels of daily active addresses than Ethereum, TON’s growth numbers continue to lag those of Solana, which averaged around 1.64 million daily active addresses in June.
“TON is positive for the blockchain industry as data shows it is adding net new assets,” wrote Andrew Van Aken, data scientist at Artemis, in a Telegram message to Unchained. “Daily active addresses on both Solana and TON have increased over the year, indicating that TON is adding new addresses.”
TON opt-out wallet launches with a huge user base
Telegram’s integrated community, aided by its in-app crypto wallet, has helped push TON’s level of daily active addresses to where it currently stands, said Jehan Chu, an investor in the TON ecosystem and managing partner of the blockchain venture capital firm Kenetic.
Telegram’s native crypto wallet is “an opt-out wallet, meaning that in addition to the 30 or 40 million US users who are geoblocked, the other 860 million Telegram users all have a native crypto wallet [and] automatically,” Chu said in a conversation with Unchained. “Let that sink in… This is a Thanos-level kind of change.”
Telegram was able to expand its technology and onboarding its large user base through the official launch of the Telegram crypto wallet, which launched in September 2023. “What’s interesting is that it’s not really about wallets. This is the seamless integration of web3 technology where users already are,” namely messaging, “one of the highest traffic destinations for users on a daily basis,” Chu said.
“99.999% of blockchain projects are a technological idea that seeks to create a community – from nothing. According to CoinMarketCap, there are more than 23,000 cryptocurrencies. This is a tough road for most,” wrote Dan Morehead, CEO of a cryptocurrency-focused venture capital firm Pantera, in the company’s May announcement about how TON was its largest investment ever. “Telegram is a community [of over 900 million users] integration of blockchain technology. It has to be simpler.”
Pantera, which has $4.7 billion in assets under management, cited other reasons in its rationale for investing in TON, including its values as a neutral platform independent of state influence and an easy onboarding process.
Games drive record levels of activity
What has driven the recent surge in activity is another factor that led Pantera to its massive investment: an ecosystem of mini-applications that include chatbots and games. Referring to Telegram’s increased levels of daily active addresses, Chu said it’s the result of “a combination of things: obviously, gaming is a big driver.” Numerous minigames within Telegram have attracted considerable attention from its users, such as Not moneyHamster Kombat and Catizen.
Notcoin, a free game on Telegram where more than 35 million users have tapped their screens to earn tokens, launched its cryptocurrency in May and has since garnered a market capitalization of $1.6 billion, data shows by CoinGecko. Similarly, Hamster Kombat has nearly 33.6 million subscribers to its Telegram channel, while Catizen has over 3.6 million users.
Even Bloomberg reported on Tuesday, many in the cryptocurrency world believe this trend of minigames on Telegram “could be the ‘killer app’ that defines the current bull market.”
Although they do not interact with the TON blockchain, popular trading bots such as Solana’s native BONKbot and Banana Gun, which is on Ethereum, depend on Telegram to generate commissions by allowing cryptocurrency users to trade on their mobile devices. Telegram also has trading bots for the TON blockchain, such as sTONks and TOB Bot.
“We believe similar TON-native Telegram bots will become the preferred user experience for many traders,” according to Ryan Barney, partner at Pantera.
Over the past year, TON’s price has increased nearly 392% to around $7.40, bringing its market capitalization to $18 billion. Despite surpassing the two largest cryptocurrencies by market capitalization, BTC and ETH, TON’s price performance over the past year is not as strong as that of Solana, whose native token increased by 860% over the same period to reach a market capitalization of more than $68 billion.
According to Decentral Park Capital’s Ye, TON has solid potential “to close the market cap gap with Solana this cycle.”