Pantera Partners: Why we invested in the TON network

By Paul Veradittakit, Partner, Pantera Capital

Pantera Capital has announced its latest investment in TON. TON is a Layer 1 Blockchain network originally designed by Telegram and continued to be developed by the Open Source community. We believe that TON has the ability to introduce Crypto Assets to the masses because it is widely used in the Telegram network. With over 900 million monthly active users, Telegram’s future-proof, fast, and secure messaging platform is used for personal and team communication, large-scale community building, content sharing, and more.

By leveraging Telegram’s large user base and seamless user experience and the vitality of TON’s emerging ecosystem, we believe TON has the potential to become one of the largest encryption networks.

Combine the Web3 ethos with mass distribution

Among the world’s leading communication tools, Telegram stands out because its platform not only embodies much of the spirit of Crypto Assets, but also has significant distribution. Telegram regularly outperforms its closest replacement, Signal, by 10 times in monthly downloads, with more than 36.7 million downloads in January 2024.

What about other messaging apps? Telegram is the only major platform that is free from regulatory barriers and can incorporate Web3 into an open Blockchain network. While Facebook’s Messenger had tried to combine encryption payments with Libra, they eventually faced regulatory hurdles from the United States, leading to a complete shutdown. WeChat has tried to integrate CBDC payments for digital people’s coins, but the system is limited in scope and developers don’t have the ability to create permissionless apps.

We believe that Telegram is well-positioned to bring Crypto Assets into the mainstream world due to its Web3 ethos and wide distribution shared with the encryption world.

A scalable platform built for hundreds of millions of people

TON is a Blockchain initiative developed by Telegram to leverage the wide user base of messaging apps to create a Decentralization Network capable of supporting a variety of applications. TON has an ecosystem of long components, including TON Blockchain, TON storage, TON DNS, and TON services, all integrated to operate seamlessly.

The backbone of the system TON Blockchain built for high performance and scalability, with its dynamic Sharding mechanism that allows transactions to be processed quickly. This architecture ensures that the network can process millions of transactions per second and scale efficiently as the number of users rises, making it ideal for developers aiming to launch applications for hundreds of millions of users without compromising speed or security.

Enter the world of encryption with ease

Getting users to use encryption applications is often difficult. New users need to write down the 24-word secret key and store it in a safe place. But what if I forget my password?How do I send or receive money to other users?Copying and pasting the Public Key may not be the best experience.

Telegram simplifies many long complexities with Top.co Wallet in Telegram, enabling users to seamlessly connect to Mini Programs. Users can easily buy, sell, or manage Tokens and NFTs in one interface and access them directly through Telegram settings and personal chat.

Wallet in Telegram features TON-based custody and self-custody management, allowing all users to enjoy an easy onboarding experience, while giving experienced users the option to have full control over their own secret keys. With TON’s self-hosted wallet, users don’t need to memorize mnemonic phrases; instead, they can simply use Telegram and email as backups.

The era of encryption applets

TON’s thriving ecosystem leverages Telegram’s innovative design and large user base. More than 360 million users use what Telegram calls “mini-programs,” which include chatbots and mini-games. With TON, we anticipate that the integration of encryption into these “mini-programs” will significantly enhance the user experience for hundreds of millions of users. There are more than 300 long projects on TON, with a large number of long building mini-programs on Telegram, which can be accessed through the Telegram App Center.

Earlier this year, we observed how meme-coin trading tools like BonkBot were generating k million dollars in revenue through Telegram’s user interface. TON-based applications, such as StormTrade, now allow users to trade Perpetual Futures, Crypto Assets, Stocks, and Shares using the same interface. With more than $10 million in volume per day, we believe a similar TON-native Telegram bot will be the go-to user experience for long traders.

Telegram is the foundation of a viral social and gaming app. Early experimental Telegram games such as Pixels and Fanzee Battles attracted millions of users in a matter of days, demonstrating the platform’s great potential for user engagement. Catizen is a cat-themed mini-game platform built on TON and currently has more than 4 million users, of which more than 700,000 are playing every day. Notcoin, a social app built on TON where users can compete to mine Digital Money, has quickly attracted more than 30 million users, making it one of the fastest Crypto Assets adoption events ever.

The TON Foundation recently announced their incentive program, which will reward the development of successful TON applications. We believe this will facilitate the creation of exciting new Crypto Assets applets that have the potential to appeal to the masses.

Unlock new ways to earn money

TON is providing the Telegram community with longest ways to coin, share, and grow their business. Decentralization marketplace on the TON network, Fragment provides a platform where users can trade collectibles such as virtual phone numbers and custom Telegram usernames. Fragment has contributed to more than $350 million in sales of custom usernames and virtual phone numbers. This is just the beginning. In the near future, 730 billion Telegram stickers that have been sent may be converted into NFTs. These NFT will then be available for purchase and sale through TON Blockchain.

Telegram has taken a significant step forward by integrating revenue sharing with content creators and channel owners through its TON Blockchain-based Fragment platform. The move marks a shift from the traditional social media model, directly allowing these creators to earn revenue from ad revenue on their channels. This approach not only rewards content creators, but also fosters a closer relationship between platforms and their users, facilitating a more equitable distribution of economic benefits within the digital ecosystem.

Native stablecoin payments

On April 19, 2024, Tether announced the deployment of its stablecoin USDt in TON Blockchain and Telegram Wallet. This development represents a significant step forward for the encryption industry, as it allows hundreds of millions of users to seamlessly send and receive stablecoins through the Telegram platform, making payments as simple as using Venmo or Apple Cash.

THE SCALABILITY OF THE TON NETWORK ALLOWS TRANSACTIONS BETWEEN TWO USERS TO BE CHARGED A FLAT FEE OF ABOUT $0.10, WHICH IS 66% CHEAPER THAN OTHER ENCRYPTION PAYMENT PLATFORMS. In addition, built-in deposit and withdrawal channels are available, including bank transfers and exchanges, for further ease of access and use.

We believe that stablecoin payments on Telegram Wallet are especially important for individuals in developing countries, who often do not have access to banking services and are forced to use complex encryption user interfaces to store and transfer funds. With stablecoins deployed on the TON network, Crypto Assets are taking a major leap towards the vision of enabling Programmability peer-to-peer coins and globally accessible DeFi systems.

Conclusion

We believe the TON network is still in its early stages, and we are excited to witness the adoption of its ecosystem and new features by the Telegram user base.

At its core, Telegram embodies the spirit of Crypto Assets: an open, free network accessible to all. With TON, Telegram enables a symbiotic relationship in which scalable smart contracts capabilities and a powerful payment network enable breakthrough capabilities that are not possible in the Web2 environment.

Given its large user base, scalable infrastructure, thriving Mini Program ecosystem, and native stablecoin trading, TON taps into the full potential of its network of 900 million active users.