Disclaimer: This document is provided for informational purposes only. It is not intended to provide any investment, tax, or legal advice, nor should it be considered any investment advice relating to virtual assets to any person in any jurisdiction.This document may include estimates, forward-looking statements, and insights, including forecasts, which should not be considered as a guarantee of future performance. The information provided is not intended to be exhaustive or comprehensive, and no express or implied representations or warranties are made regarding its accuracy or completeness. The opinions expressed in this document are as of Sep 2024 and are subject to change without notice. Readers should exercise their own discretion when relying on the information presented herein. It is important to note that investing involves inherent risks that should be carefully considered.

This report was developed in collaboration with Samuel Qin, who played a pivotal role in the research and formulation of this document. Follow his insights on X: @Samuel_Q6.

TL,DR

• Current Status and Challenges of Web3: Currently lacks a globally recognized narrative, leading to stagnation in user growth and insufficient liquidity within the Web3 ecosystem. Expanding channels for traffic acquisition, lowering entry barriers for users, and uncovering genuine user needs are key to future development.
• Traffic Potential of Web2 Platforms: As one of the top four global instant messaging apps, Telegram holds immense potential for user conversion for the cryptocurrency world. Many crypto projects on Telegram leverage its community management and traffic accumulation functions to accelerate the transition of users into crypto.
• Telegram’s Strategic Blockchain Integrations: Telegram has partnered closely with The Open Network (TON) blockchain and has created a venture builder (TOP). Launch of an integrated wallet and a Mini App ecosystem, it is easy for users to explore Web3 without leaving Telegram’s native environment.
• Traffic Monetization and Integration: Efforts are focused on the gaming sector, avoiding the reliance on token issuance and paving the way for consumer-oriented mini apps. Telegram’s group and channel features aid Web3 projects in community building and user engagement, while ads and push notifications help users discover new Web3 Apps.
• New Era of Traffic in Crypto: Transitioning Web2 users to Web3 requires a smoother path. Platforms like Telegram can leverage their traffic to facilitate this shift. Diverse, user-driven applications are key to attracting new users.
• Future Direction of the Crypto Industry: After turbulent market shifts, Web3 has gained significant growth in both popularity and diversity worldwide. The focus now is on finding stable revenue streams and leveraging traffic growth to reshape the industry. The future holds opportunities in both existing and new user markets.

1. Scarce Traffic

Is Market Confidence Returning?

Since hitting its all-time high in 2021, the crypto market has spent the past year in a bearish downturn, with market confidence shaken by several factors. In the post-COVID landscape , the global economy has been disrupted by frequent regional conflicts, energy crises, and soaring inflation. In response, Central Banks worldwide have hiked interest rates to curb inflation. This tightening of monetary policy and higher interest rates have driven up investment costs. Moreover, the sustained strength of the U.S. dollar has further squeezed crypto investments, which are already viewed as high-risk assets.

Since 2023, frequent issues affecting centralized exchanges (CEXs) and crypto banks have significantly shaken confidence in the industry. The crypto market lacks a globally accepted narrative to drive growth. While sectors like AI, Decentralized Public Infrastructure Networks (DePIN), memes and inscriptions have shown promising performance and feedback, their inherent characteristics and maturity levels have prevented them from achieving scale. This is in stark contrast to the widespread participation and discussion sparked by the DeFi and NFT sectors in the previous cycle.

The recent rebound in the crypto market, driven by the arrival on the market of multiple Bitcoin Exchange Traded Funds (ETFs) and the entry of traditional financial institutions, has been limited. As of now, the total market capitalization of crypto stands at approximately $2.07 trillion, down 28% from its all-time high of $2.88 trillion and about 21% below its peak in the first half of 2024 ($2.63 trillion).

The Cycle Remains Sluggish

For stablecoins, the overall market capitalization has increased by $40 billion since the beginning of 2024. However, this growth is noticeably slower than the increase during the previous cycle from the 2021H2 to 2022H1.

In 2024H1, BTC surpassed its previous all-time high, with its market dominance clearly on the rise. The siphon effect of leading cryptocurrencies is evident, as the market cap of coins other than BTC and ETH hasn’t seen much growth since the last bear market. This suggests that, as speculative bubbles in financially-driven topics deflate, investors are hesitant to enter or even stay in the market, choosing instead to minimize their exposure to the risks associated with crypto asset allocations.

The Crypto Traffic Dilemma

The current situation can be attributed to the following reasons:

• Lack of New Users: The crypto sector’s regulatory frameworks are relatively underdeveloped and in need of further refinement. The disclosure of risks related to sudden events, policies, etc., can lead to significant price volatility, prompting countries to impose stricter entry restrictions on the crypto market.
• Challenges with Existing Users: Blockchain technology lacks fresh and practical use cases, making it difficult to implement. Projects overly focus on financial aspects and rely too heavily on price fluctuations, which severely shortens their lifespan. As speculative bubbles in finance-related topics burst, participants are unwilling to stay in the market.
• Lack of Innovative Business Models: While current blockchain projects excel in different technical aspects, they still rely on token issuance expectations to attract participants. Once the expected returns are achieved, projects often lose momentum.
• Lack of Access Channels: Entry barriers for Web3 users are high, with more complex initial account (wallet) setups that differ significantly from mainstream account systems, resulting in higher user friction. It is also challenging to discover new applications through specific channels and information is more fragmented.

Given these challenges, attracting new users has become crucial for the growth of the crypto industry. Expanding traffic acquisition channels, identifying potential users, lowering entry barriers, and meeting real user needs will be key to driving industry change. Telegram is currently at a pivotal point in this process.

2. Untapped Platform Traffic

In April 2024, Telegram surpassed 950 million monthly active users, placing it among the top four instant messaging apps globally. Its user base is widely distributed, with downloads spread across the world. In the regions where Telegram ranks highest, there is a significant presence of Web3 participants who are generally more open to the crypto industry. When these hundreds of millions of users are fully exposed to the crypto space, the potential is enormous.

Telegram’s use of end-to-end encryption aligns with Web3’s privacy principles, making it popular with many Web3 projects. It has become a vital hub for community interaction and traffic retention within the Web3 ecosystem. Users can join various groups and channels to access a wealth of cryptocurrency information and engage in real-time market discussions. This environment not only sparks users’ interest in cryptocurrencies but also provides a steady stream of industry news and educational resources, helping to accelerate their journey into the crypto world.

Many crypto projects leverage community enthusiasts’ interactions on Telegram to offer early investment opportunities, airdrops, and testnet access. These activities provide easy entry points for everyday users, drawing them into the cryptocurrency market. Moreover, Telegram’s multi-platform reach allows users to move seamlessly between different systems and devices, ensuring a consistent experience across platforms and boosting their confidence to explore the crypto world further.

3. Leveraging Traffic Through Blockchain

In recent years, Telegram has established a deep cooperative relationship with the TON blockchain while TOP has helped fund and scale multiple successful projects on TON. Leveraging TON’s established sharding architecture, Telegram can handle massive user interactions on its platform, enabling a deeper integration with Web3 applications. Telegram and TON have formed an official partnership to jointly develop the Telegram Web3 ecosystem. TOP developed the Telegram integrated wallet (@wallet), which is accessible from Telegram’s main interface, allowing users to take their first seamless step into the on-chain era.

Through the development of TON’s underlying infrastructure, Telegram aims to acquire users via its centralized platform traffic, subsequently driving commercial growth and product iteration. This collaboration creates a collaborative, mutually beneficial ecosystem between Telegram, TON and TOP, with significant potential for further expansion.

Currently, the @wallet feature, as a custodial wallet, allows users to perform transactions within Telegram, similar to WeChat Pay’s in-chat transfer functionality, while also supporting on-chain interactions within the Telegram app. The @wallet also includes the non-custodial wallet service TON Space. Unlike @wallet, TON Space supports NFTs and Jettons, enabling users to experience more DApp functionalities through this channel. Funds can also be transferred between @wallet and TON Space. The integration of various payment options within Mini Apps, web applications that work inside Telegram’s interface, further shortens the path for users to seamlessly transition to Web3.

In April of this year, Tether announced the issuance of USDt on the TON network. Currently, the net circulating supply is approximately $680 million, ranking fifth in terms of stablecoin circulation on the platform. In July, USDt-TON became the fastest growing USDt standard by total circulation among those that are tracked by Tether. The significant circulation of stablecoins indicates strong demand for crypto services on TON.

USDt payments on TON are enhanced by the W5 standard for gasless payments. This standard was released by the team behind Tonkeeper, a TON-based wallet, incubated by The Open Platform. The feature allows users to cover network fees using the same token being transferred, eliminating the need to hold Toncoin for transaction costs. W5 is available to developers through the TON API, a service for building dApps on TON. The presence of gasless payments across the ecosystem further shortens the path for onboarding Web2 users to the Web3 environment by eliminating the need to acquire the native token first to handle the transaction. This is especially useful for newcomers who may have received a USDt payment or reward but do not own Toncoin yet.

It was also disclosed in July 2024 that a Layer-2 expansion network, TAC (TON Application Chain), will be launched on TON Blockchain. This network is expected to use Polygon CDK and Agglayer interoperability protocols to overcome previous incompatibility issues with Ethereum, enhancing the integration of decentralized applications within Telegram and unlocking new possibilities that could drive significant user engagement.

In June, TON’s daily active address surpassed those of Ethereum, however, both daily active addresses and transaction volume still lag behind more established blockchains and those attracting significant industry attention, like Solana. However, since the second half of 2023, TON has shown notable growth, with increases that outpace other chains during the same period.

Meanwhile, older blockchains have become bogged down in internal competition, focusing on performance scaling and consolidating various sectors. This has made their narratives increasingly stale and out of touch. Their pursuit of fleeting industry trends has further diluted their focus, limiting their potential for sustained growth. While chains associated with memes and inscriptions have performed exceptionally well this cycle, users find it challenging to sustain profits through these models.

In contrast, the TON ecosystem, bolstered by deep collaboration with Telegram, is closely tied to traditional social applications. The frequent release of hit Web3 mini-programs has captured significant market and industry interest, drawing a large influx of users and developers.

4. Lessons from Others

The Rise of Telegram Bots

Telegram Bots have seen significant development since the introduction of the Bot API in 2015. These bots can perform a wide range of automated tasks within the Telegram chat environment, from sending personalized messages to handling transactions. This capability has allowed developers to create richer interactive experiences and e-commerce features. With the emergence of blockchain and Web3, Telegram Bots have increasingly supported related applications. For instance, the @wallet bot mentioned earlier exemplifies Telegram’s strategic push into Web3, highlighting its commitment to advancing cryptocurrency trading and smart contract interactions.

The automated, embedded interactivity that bots provide allows users to trigger predefined actions through clicks, text inputs, and other forms of engagement. For example, trading data from the past 180 days shows that the top 10 trading bots have collectively processed over $30 billion in transactions, spanning 13 blockchains, including Ethereum and Solana. Data from a leading trading bot indicates that, in the last six months, it has gained over 10,000 new users daily, with a cumulative user base exceeding 200,000. This suggests that as memecoins gain popularity, the use of bots for participating in new token launches, alongside on-chain contract deployments and transaction monitoring, has significantly streamlined the trading process for users.

Launch of Telegram Mini Apps (TMAs)

Telegram Mini Apps, introduced in 2023, are a major feature which marks a logical evolution of the Bot Platform. They function similarly to regular websites, complementing Telegram’s existing interface and signaling its transition from a simple messaging app to a comprehensive service platform. These Mini Apps enable developers to create lightweight applications within Telegram, allowing users to access a variety of services — from e-commerce to interactive content — directly within the chat environment.

This initiative is part of Telegram’s broader strategy to integrate more deeply with the Web3 ecosystem, offering developers and users innovative opportunities within Telegram’s secure environment. Telegram Mini Apps (TMAs) aggregate functionalities, allowing developers to incorporate HTML, CSS, and JavaScript into TMAs, and also provide tools to assist with integration. TMAs support 20 common payment methods, including Google Pay, Apple Pay and Telegram Wallet.

A selection of TMAs is available in Telegram Apps Center (tApps Center) — a catalog showcasing pre-moderated TMAs across various categories. tApps Center functions as a centralized marketplace where users can discover and access a wide range of Telegram-based applications. For developers, it provides a streamlined platform to distribute and promote their applications within the Telegram environment, supported by tools like the Apps Moderation Bot to ensure quality and compliance​.

The Future of TMAs

TMAs are similar to WeChat Mini Programs, with both Telegram and WeChat leveraging their large user bases as key assets. Launched in 2016, WeChat Mini Programs have become an essential feature, rooted in a vast user base and offering a wealth of use cases that can inform the development of TMAs. As one of the most frequently used types of applications, instant messaging platforms are critical channels for traffic retention within the internet ecosystem. One of the key challenges TMAs face is how to activate and monetize the significant traffic that is already embedded within their platform.

According to relevant data, the top 20 WeChat Mini Programs by MAU fall into six main categories: Social Life, Payments and Finance, Shopping and Dining, Office and Business, Travel Service, Gaming and Entertainment. WeChat Mini Programs cover nearly all aspects of users’ daily lives, and over time, users have become accustomed to managing their personal needs within WeChat’s all-in-one ecosystem.

This long-term user habit-building is something TMAs can aspire to replicate, offering a similarly seamless experience within Telegram.

Mini Program developers targeting billions of users only need to focus on traffic acquisition and subsequent monetization, relying on platform-constructed functional components (such as payment and advertising). This approach is far more efficient than developing an excellent app independently and then trying to attract users. As a result, nearly all commercial brands in China have established their own Mini Programs within WeChat, using them both as another form of e-commerce channel and as a member management system. They further operate their brand, store, or personal private traffic through tools like WeChat Enterprise, groups, and official accounts.

This traffic operation logic is also entirely applicable in Telegram’s Web3 ecosystem. Project teams can focus on developing lightweight applications while leveraging the traffic of a centralized social app. With built-in blockchain, wallet and ads placement components, the difficulty of an initial cold start is significantly reduced.

Shift in Monetization Logic

Compared to typical Web3 applications, traffic monetization is often a convoluted process. It usually involves attracting early users through airdrops, accumulating a large number of active wallets and interaction data and then listing the token on CEX for an exit. Traffic data becomes a critical metric for listing tokens, indirectly generating profits for project teams. However, this monetization model is often criticized for its potential to resemble a Ponzi scheme. The various parties involved may be incentivized to inflate the bubble further to achieve greater returns, which can lead to economic losses for those who buy in at the market’s tail end. It is important to note that this critique does not completely negate the innovation of Web3 projects in introducing token-based incentive models but rather highlights that the oversaturation of similar projects has pushed the market toward a near zero-sum game. The value created by genuine project innovation has become negligible compared to the massive gains from token issuance, which undermines sustainable development. This problematic monetization approach needs to be reformed.

Currently, projects within the Telegram ecosystem are innovating the traditional traffic monetization model, with a particular focus on the gaming sector. Although the primary method still revolves around airdrop incentives, there have been advancements. For example, a popular Telegram mini-game launched in April of this year has seen a significant increase in daily active users (DAU), with the cumulative number of on-chain users surpassing 1.5 million and on-chain gas fees exceeding 90,000 TON. The number of paying DAUs has also consistently increased. The game itself is a relatively simple synthesis and nurturing game, where users can pay to accelerate in-game production and automate synthesis, leading to voluntary payments by users. This has generated substantial revenue for the development team.

This business model addresses the issue of balancing operational costs and project revenue during the cold start phase, avoiding the reliance on token issuance as the sole means of generating returns. Investors can also better assess the business’ inherent profitability.

However, it is worth noting that for app-based game developers, cost calculations typically include channel costs, user acquisition costs, and development costs, with channel costs often being the highest. App stores also take a significant cut from in-app purchases. For example, on the WeChat Mini Program platform, there are limitations on the size of game code packages, which restricts games with high demands on visual quality. However, this can also reduce development costs. Additionally, the user acquisition logic for Mini Programs is simpler, and channel costs are primarily concentrated on advertising and app store revenue sharing, making the overall cost lower than that of app-based games.

However, the product life cycle of Mini Program games tends to be shorter. Compared to app-based games, which can support more content and immersive experiences, Mini Program games are limited by the platform’s ceiling. Even successful Mini Games on WeChat rely heavily on trending topics, distribution channels and advertising or word-of-mouth spread within user groups to sustain engagement. Revenue mainly comes from in-app purchases (IAP) and in-app advertising (IAA).

Despite these limitations, the viral spread mechanism of Mini Games can attract a large number of users in a short period and cater to different types of users. Therefore, using games as an entry point to explore non-transactional Mini Programs is a very effective strategy. Users who become accustomed to Mini Programs may later transition to more consumer-oriented applications, such as e-commerce, dining, travel, short videos, and other non-transactional apps, which also hold significant potential.

Major TON ecosystem players are allocating their resources to generate traffic with the intention of eventually converting it into paying users. The Open League (TOL), a seasonal competition for users and projects initiated by the TON Foundation, has acted as a major traffic generation channel since its inception in March 2024. Similar to airdrops, TOL is an incentive-based user acquisition initiative. The central part of the program is the boosted liquidity pools for holders of ecosystem tokens (jettons). Simultaneously, a competition for TON-based projects was held, where the best-performing projects shared a prize pool in Toncoin. Allocating rewards to both users (in the form of boosted liquidity pools, token mining, and airdrops) and best-performing projects (as a Toncoin prize pool and grants) ensures a synergistic effect. The competition created an incentive for projects to maximize the use of the tools and reward pools provided by TOL, while also boosting the exposure of these projects to new users.

The surge in most on-chain metrics that started in March and continues as of this report was largely influenced by TOL. Of course, TOL introduces the user retention challenge, but the seasonal structure is meant to mitigate this by building longer-term user habits and converting them into paying users.

5.Integrating Traffic from Individuals to Community

The Community Governance Hub

Instant messaging platforms have evolved through four distinct stages: starting with basic 1-on-1 chats, progressing to multi-user online chat rooms, then to group chats that can accommodate thousands of participants, and finally shifting from familiar social interactions to those involving strangers and acquaintances. This progression is a hallmark of the mobile internet era and is especially relevant in Web3 communities, where these scenarios frequently occur. As content accumulates, interest-based groups form, driving the need for communication within these groups.

However, opening a channel with thousands of messages can be overwhelming, as the sheer volume of irrelevant or filler content can make it difficult to navigate. To address this, Telegram has introduced Discord-like channel management features, which are particularly useful in Web3 community management. These features allow the separation of different message types and the creation of distinct groups for different community members, each with its own set of management permissions. This helps streamline the management of large communities, making it easier to handle the various types of information and enhancing interaction with core members.

The channel function on Telegram is similar to WeChat public accounts, where channel owners can broadcast various types of information. However, unlike WeChat, Telegram currently does not distinguish between broadcast channels and regular chat channels, and there is no dedicated entry point for each. Some of the top Web3 mini-programs on Telegram have already surpassed millions of subscribers. Notably, channels tied to trending topics can see substantial subscriber growth in a short period.

Expanding Traffic Entry Points

Based on information shared by Telegram’s founder Pavel Durov’s Du Rove’s Channel, despite Telegram generating over a trillion views per month, only about 10% of this traffic is currently monetized. Compared to other social platforms, Telegram is still in the early stages of exploring monetization opportunities. As a result, the commercialization of ads within Telegram channels has become a priority. Channel owners can now earn revenue by hosting ads and sharing profits with Telegram, primarily through in-line text ads within channels. These earnings are distributed and withdrawn via the TON Blockchain, marking an important step in the transition from Web2 to Web3.

However, given that Telegram’s traffic monetization is still in its infancy, the development of detailed user profiles is far from complete. While some insights can be gleaned from the types of channels users subscribe to, there remains significant untapped potential for precise ad targeting at both the channel and individual levels. Exploring ad effectiveness and building vertical platforms within Telegram could be key to its future commercialization.

Given the sheer volume of Telegram users and channels, many users will receive timely updates about new applications through channel ads and may be prompted to explore them further. This passive push approach could significantly alleviate the current visibility challenges faced by new Web3 projects. Using cryptocurrency as a revenue-sharing method is another crucial step for Telegram to make a bigger impact in the Web3 space.

However, Telegram’s open environment also brings increased information security challenges. In the context of Web3, which emphasizes decentralization, the risks of phishing, scams and other security incidents are heightened. Balancing the embrace of Web3 with the need to protect users from malicious actors on Telegram is a critical issue. For example, OKLINK’s Security Monthly Reports show that in just the past quarter, over 50 big-sum phishing scams have happened in various social applications across the web, with total losses exceeding $116 million. Users must also remain vigilant when receiving Web3-related information online.

6. The New Wave of Crypto Traffic

A Smoother Entry Path

At this critical juncture, the traditional crypto narrative is beginning to show signs of fatigue, with persistent liquidity challenges hindering the industry’s long-term growth. As a result, attention is shifting back to traditional instant messaging (IM) applications, which already have substantial traffic reserves. Simultaneously, traditional platforms are exploring new ways to attract additional users. Web3 is becoming an essential part of their growth narrative. Platforms like Telegram, which have already laid significant groundwork in blockchain infrastructure, are leveraging centralized platform traffic to acquire users, driving commercial growth and product iteration. This creates a closed-loop ecosystem within the Telegram and TON framework, positioning the transition from Web2 to Web3 as the new narrative that could define the next cycle.

Closer Integration with User Needs

When it comes to application types, beyond transactional uses, consumer-oriented applications that closely align with users’ daily lives are more likely to meet the needs of potential new users. Large-scale adoption of these applications can help reach a broader Web2 audience. The traffic-driven narrative has been a proven success in traditional sectors, where leveraging social and content platforms for commercialization has already shown significant results.

Broader Participation Scenarios

As the path to monetizing Web3 traffic continues to develop — through advancements in payments, application platforms, and traffic entry points — a more decentralized, open, and shared ecosystem is beginning to take shape. This expansion not only broadens user participation scenarios but also allows smaller, lightweight development teams to benefit from traffic dividends through platform revenue-sharing models. While this approach is still in the exploratory phase within the Web3 space, it holds promise and requires more time to fully prove its effectiveness.

Conclusion

Telegram’s extensive traffic base provides a prime opportunity for Web3 applications to convert existing users into new ones. Through its deep partnership with TON Blockchain, Telegram has laid down solid blockchain infrastructure and is now planning strategic Layer-2 compatibility with other blockchains. By integrating Web3 features directly into its user interface, Telegram is enabling more users to explore and adopt new technologies, thereby speeding up the broader adoption of Web3. This approach not only boosts engagement among new users but also draws in investors and developers to the space.

This strategy can significantly ease the current traffic shortage, as demonstrated by the strong performance of projects on Telegram. Projects can leverage their product strength to generate stable revenue through in-app purchases within mini-programs, reducing overreliance on token issuance for outsized returns. Token airdrops can serve as incentives for early adoption and continued user engagement. However, this approach will require time to cultivate user habits, test payment willingness and refine project strategies. Despite these challenges, Telegram’s efforts have introduced a new model of collaboration between Web2 and Web3 companies, blending their strengths to broaden industry horizons and, most importantly, provide users with more convenient and diverse application scenarios.

The Web3 market is extremely fast-paced, and staying attuned to market shifts is essential for identifying growth opportunities amid the information overload. This focus on user-centric growth is not only what users want but also the direction in which the industry is heading. Companies, which are at the forefront of Web3, are constantly monitoring market trends and technological innovations. Leveraging their technical prowess, they quickly identify and meet user needs, integrate with new blockchain ecosystems, expand their service offerings, and support innovative use cases in the blockchain industry. By providing the tools necessary for agile, user-focused development, they are helping more potential users experience and integrate into the Web3 world.

Reference：

• https://decrypt.co/239067/telegram-linked-ton-ethereum-ecosystem-layer-2-network
• https://coincodex.com/article/44175/how-telegram-and-mini-apps-could-push-web3-adoption/
• https://core.telegram.org/bots/webapps
• https://tgstat.com/
• https://www.coindesk.com/opinion/2024/06/27/the-prize-for-owning-web3-distribution-is-enormous-heres-why-it-wont-go-to-big-tech/
• https://x.com/tonkeeper/status/1810402818442064311
• https://topco.medium.com/native-usdt-on-ton-adoption-and-market-dynamics-q2-2024-701e07413f85
• https://topco.medium.com/from-bots-to-mini-apps-unveiling-telegrams-web3-ecosystem-edea254f9b5f
• https://cointelegraph.com/news/ton-telegram-integrates-ton-crypto-wallet-ton-price-jumps-7
• https://www.36kr.com/p/2371578714761224

A shift in the Web3 narratives has occurred in 2024. While initial discussions focused heavily on decentralization and disrupting traditional systems, the emphasis has now shifted towards user experience, accessibility, and practical utility.

The original ideals of decentralization and anonymity, while still important, are being balanced with the need for scalable, user-friendly solutions that can achieve mainstream adoption.

Consider the basic onboarding challenge for any blockchain. A new user wants to send or receive USDt. Typically, they would need to hold the native token, Toncoin, to cover the transaction fees. For someone new to blockchain, this adds complexity and an additional step that could deter users.

To address this challenge, Tonkeeper has introduced W5 Wallet, a new wallet standard that supports gasless transactions. With W5, users can cover transaction fees using the token which is already being transferred (e.g., USDt). This eliminates the need to hold Toncoin, simplifying the process and making it more accessible.

Gasless Payments in USDt with W5: How and Why

On May 30, Tonkeeper unveiled W5, a standard for gasless USDt payments on TON. This acts as a next step to Tonkeeper Battery, a feature that allows users to cover gas fees by “charging up” with in-app purchases. W5 was launched on July 25 and is now available to any TON builder who wants to enhance their dApps with an exceptionally smooth payment experience.

Tonkeeper, Installs and Monthly Active Users (MAU), Million

Our previous report about the launch of the native USDt on TON introduced the W5 standard:

W5 standard simplifies the transaction process by enabling users to pay network fees using the same token being transferred, eliminating the need to hold Toncoin to cover fees. This not only enhances accessibility but also significantly accelerates the adoption of blockchain for everyday financial activities.

The Open Platform. (2024). Native USDt on TON: Adoption and Market Dynamics Q2 2024 [Medium].

Beyond the headline feature of enabling gasless transactions, W5 standard supports up to 255 simultaneous transactions. This makes it highly efficient for use cases like transferring multiple NFTs or managing decentralized subscriptions.

The standard also reduces gas fees by 25% and supports account delegation and recovery, offering flexibility and convenience. This is especially useful in scenarios where users might need to delegate transaction permissions or recover lost access.

The introduction of subscription payments and low-cost multi-transfers further broadens the scope of applications that can be developed, making it easier to handle regular payments within the TON ecosystem.

The synergy between W5’s gasless feature and its support for high transaction volumes creates a powerful combination for developers. When combined with the ability to handle large transaction volumes efficiently, gasless transactions allow developers to build scalable, user-friendly dApps with a payment experience similar to traditional peer-to-peer payments or in-app purchases.

Why This Works: Ecosystem Balance and Long-Term Vision

It is important to note that W5 does not eliminate gas fees. Instead, it allows users not to worry about a wallet’s Toncoin balance when making transfers. Gasless payments using USDt on W5 wallet are slightly more expensive than paying directly with Toncoin using the same wallet standard.

Specifically, gasless USDt transactions cost around $0.10 with Battery and $0.14 with W5 at $7.00 per TON. The average fee for sending any amount of TON is 0.0055 TON (TON Docs), which translates to $0.038 at the same price.

The fee increase occurs because of additional steps involved in the process. However, the efficiency of W5 standard and TON’s ultra-low fees keep the final cost low enough that, for many users, the convenience of not needing to hold Toncoin outweighs the slight additional expense.

Why is TON the first blockchain to implement gasless payments?

First, the technical complexity of designing a seamless conversion mechanism that maintains network security and efficiency is a significant barrier. Many blockchains prioritize other developments or may lack the same level of integration with stablecoins that TON has achieved.

Furthermore, governance and consensus challenges within these blockchain communities could slow the adoption of such innovative features. Any change to fee structures would require broad stakeholder agreement and careful consideration of potential impacts on the ecosystem.

Conversely, TON has consistently prioritized user experience as one of the central aspects of its development strategy. By eliminating the need for new users to acquire Toncoin just for transaction fees, W5 can lower barriers to entry and attract more users to the TON ecosystem. This indirectly increases the utility and demand for TON in the long run, as users engage in other activities that require Toncoin.

Addressing the Need for a New Web3 Narrative

In 2024, several Web3 narratives have stalled, particularly those centered around the promise of full decentralization and total privacy. While these ideals were initially compelling, the reality of scaling such systems and achieving mass adoption has proven challenging.

Many projects now recognize the need for practical compromises, such as hybrid models that combine decentralization with more centralized elements for better user experience, security and regulatory compliance. As a result, the once-dominant narrative of complete decentralization has been tempered by the practical needs of today’s blockchain applications.

W5 may well be at the forefront of a fresh Web3 narrative because it addresses the critical need for usability and accessibility in blockchain technology. W5 shifts the focus from the traditional Web3 ideals of decentralization, creating a more user-centric and developer-friendly ecosystem.

TON’s connection with Telegram, which has nearly a billion users, leverages the W5 standard to introduce blockchain technology to a vast base of users seamlessly. This integration aims to create a bridge between Web2 and Web3, making blockchain interactions as simple as using any other Telegram feature.

Getting Started with W5

W5 is available in Tonkeeper and is expected to be supported by other TON-based wallets like TON Space and MyTonWallet in the near future. Users can already try W5 by updating Tonkeeper to the most recent version, tapping “Settings” and selecting “W5 Wallet” to add W5 and start using it like a regular wallet.

Builders are encouraged to learn more about W5’s technical specification at docs.ton.org and access W5 features through the TON API for integration into dApps. Learn more about W5:

• Tonkeeper’s Official Article on W5: Tonkeeper’s Gasless Payments — Explains the gasless payment feature and the role of the relay service.
• TON Documentation: TON Wallet Contracts — Provides technical details about W5, including features like plugin interfaces and transaction delegation.
• Tonkeeper’s Telegram Announcements: Tonkeeper News — Updates and announcements about W5 and its features.
• Wallet Address Versions: Tonkeeper Help Guide
• W5 Help Section: Tonkeeper Help Guide on W5.

Disclaimer: This article discusses various aspects of Real-World Asset (RWA) tokenization, including the involvement of major financial institutions, the integration of blockchain technology, and the potential benefits and challenges. It is important to note that the legislative and regulatory landscape surrounding RWA tokenization is rapidly evolving. Current laws and regulations are still being shaped, and future developments may significantly impact the theses and outcomes discussed herein. The information provided in this article is based on the current understanding and state of the market as of the date of publication. Readers are advised to stay informed about ongoing legislative changes and consult with legal and financial experts when considering investments in tokenized assets.

RWA Tokenization involves converting tangible assets like cash, equity, bonds, loans, real estate, commodities or fine art into digital tokens on a blockchain, making them more accessible, liquid and transparent. The concept has recently gained significant traction, offering a bridge between traditional financial instruments and the world of digital assets.

We previously covered the topic of Tokenized Real Estate. This segment was mostly dormant throughout the second half of 2023. RWA tokenization has faced many false starts due to technical, regulatory and market challenges. As a result, real estate tokenization has now become a smaller segment within the broader RWA market.

RWAs, however, became the second biggest digital asset narrative in Q2 2024, accounting for 11% of web traffic among narratives tracked by CoinGecko. The industry now represents a rich and diverse landscape, encompassing a variety of markets and including stakeholders from both Decentralised Finance (DeFi) and Traditional Finance (TradFi).

In this article, we explore the latest trends in RWA tokenization and highlight successful pilot projects that define the state of RWA in Q2 2024. We will also summarize the current narratives around the RWA market and look at possible future waves of tokenization.

Increased Institutional Participation Nudges the Dormant Market

Several major financial institutions made their first strategic moves into RWAs in 2024. The increased attention devoted to RWA tokenization likely followed successful pilot initiatives launched by giants of traditional finance such as BlackRock and Franklin Templeton as well as leading DeFi players like Ondo Finance.

BlackRock, Franklin Templeton and Ondo’s own tokenized financial products account for more than 60% of the total market capitalization of tokenized government securities:

BlackRock’s BUIDL, officially known as the BlackRock USD Institutional Digital Liquidity Fund, is a tokenized fund on the Ethereum network launched on March 20, 2024. The BUIDL fund is backed by a mix of cash, U.S. Treasury bills, and repurchase agreements, and is designed to provide qualified investors with the opportunity to earn U.S. dollar yields by subscribing to the fund through blockchain technology.

As of July 2024, BUIDL grew to become the largest tokenized treasury fund, surpassing $500 million in assets under management.

Several blockchain projects contributed to the success of BUIDL. Securitize played a role in compliance and investor management, ensuring the tokenized products met regulatory standards. Maple Finance offered an on-chain credit marketplace, facilitating the creation and trading of credit products. Swarm Markets, a licensed DeFi platform, facilitated the tokenization and trading of RWAs within a regulated framework. Boson Protocol enabled BlackRock to explore new avenues for tokenizing and trading RWAs through a blockchain-based e-commerce market. Polytrade provided a marketplace for managing RWAs, supporting the democratization of investment opportunities and improving asset liquidity. Finally, Ondo Finance, an issuer of OUSG, a tokenized short-term U.S. Treasuries fund, deployed the majority of its assets on BUIDL, contributing to its utility for traditional investors (BeInCrypto) (CoinDesk) (CoinMarketCap) (The Defiant).

Franklin Templeton’s tokenization project, known as the Franklin OnChain U.S. Government Money Fund (FOBXX) is another example of integration between traditional finance and DeFi. Launched in 2021, this fund is the first US-registered mutual fund to use blockchain for processing transactions and recording share ownership. The project leverages the Stellar and Polygon blockchains to support the BENJI token, which represents shares of the FOBXX fund. This initiative allows peer-to-peer transfer of tokenized shares and aims to provide steady yields to investors, enhancing the liquidity and accessibility of U.S. government money funds. Franklin Templeton developed this project in-house but collaborates with blockchain networks to implement the technology (Franklin Templeton, BeInCrypto).

Franklin Templeton’s RWA strategy differs from that of BlackRock, which primarily relies on partnerships with existing blockchain projects. While BlackRock’s BUIDL focuses on integrating various DeFi platforms to tokenize U.S. Treasury bills and other fixed-income products, Franklin Templeton’s approach centers on leveraging public blockchains to enhance the transparency and efficiency of traditional money market funds.

Ondo Finance is an example of a successful non-institutional tokenized U.S. Treasury asset issuer. Ondo Finance’s USDY project, launched in late 2023, is designed as a yield-bearing stablecoin backed by U.S. Treasuries and bank deposits. USDY represents a stable and interest-bearing digital asset, offering yields to its holders through the integration with traditional financial instruments. Unlike typical stablecoins, USDY generates yield from the underlying U.S. Treasury assets, making it an attractive option for both DeFi users and institutional investors seeking stable returns.

Ondo Finance’s Short-Term US Government Bond Fund (OUSG) represents tokenized short-term U.S. Treasury bills and complements USDY by providing a secure and yield-bearing alternative for investors seeking exposure to U.S. Treasuries within the DeFi ecosystem. Together, they offer diversified investment options, balancing stability with attractive yields for DeFi users.

JPMorgan and Goldman Sachs are also working on similar initiatives in the tokenized U.S. Treasuries space, such as JPMorgan’s Onyx and Goldman Sachs’ concept of a RWA marketplace (J.P. Morgan | Official Website) (BeInCrypto).

These institutions have the resources, expertise and regulatory clout to navigate the complex landscape of tokenization and are likely to be the driving force in the RWA tokenization segment. BUIDL demonstrates how TradFi plays a role in accelerating the path to adoption for DeFi protocols like Ondo Finance while also incorporating some of these protocols for its purposes.

Notably, all of the instruments discussed in this section are fixed income instruments, currently the dominant segment in RWA tokenization, which we will delve into in the next section.

Shifting Trends in the RWA Landscape: From Equity to Fixed Income

Leadership in the RWA tokenization market has shifted towards the fixed income segment, which extends beyond U.S. Treasuries. Tokenized fixed income securities, such as private credit, have gained significant traction due to their stability and regulatory clarity. These assets offer predictable returns and are easier to integrate within the existing regulatory frameworks.

According to RWA.xyz, tokenized private credit accounts for the largest share of total RWA value:

Tokenized private credit involves converting traditional debt instruments such as loans and bonds into digital tokens on a blockchain. This process is used by various entities, including investment funds, specialty finance companies and fintech startups. It generates returns through interest payments from the underlying loans.

According to RWA.xyz, the top private credit tokenization protocols by total value of all loans originated are Figure, Maple and TrueFi:

Figure leverages blockchain technology to streamline and modernize the lending process, primarily focusing on home equity lines of credit (HELOCs), student loan refinancing, and mortgage refinance. The platform uses Provenance, its own blockchain, to facilitate these services, aiming to enhance efficiency, reduce costs, and improve transparency in loan origination, servicing, and trading. Figure’s unique approach lies in its comprehensive use of blockchain across the entire lending lifecycle, differentiating it from other traditional and tokenized credit platforms (Figure Lending).

Maple Finance provides a decentralized infrastructure for institutional lending, enabling the creation of loan pools. Their strategy involves leveraging digital asset collateral such as BTC and ETH, providing high-quality, risk-adjusted yields. The platform operates on Ethereum and Solana and has partnered with blockchain credit risk management firms to offer managed credit portfolios (Maple Finance).

TrueFi is a DeFi platform specializing in uncollateralized lending. Launched in November 2020, TrueFi operates on the Ethereum and Arbitrum, connecting lenders and borrowers through smart contracts governed by the TRU token. Borrowers undergo rigorous credit assessments, including KYC and AML checks, and are assigned on-chain credit scores to determine loan terms. This process allows TrueFi to offer loans without requiring collateral, enhancing accessibility and efficiency in the lending market (TrueFi | Docs).

Private credit, along with U.S. Treasuries, is within the first wave of adoption of tokenized assets, according to McKinsey:

McKinsey’s report “From ripples to waves: The transformational power of tokenizing assets” suggests the appetite for investing in tokenization is influenced by the efficiency and profitability of current processes, the degree of outsourcing and the concentration of key players and their fees.

U.S. Treasuries and private credit both often involve high transaction volumes and relatively low margins, making the cost savings from blockchain’s efficiency and automation particularly attractive. The processes for these assets are typically more standardized and scalable, which reduces the barriers to tokenization and accelerates time to impact, enhancing the business case for early adoption. Since these activities are often outsourced to achieve economies of scale, there is also a strong incentive to adopt more efficient blockchain solutions to further reduce costs and improve returns.

The combination of high potential cost savings, quicker return on investment and the standardized nature of these financial products makes tokenized U.S. Treasuries and private credit prime candidates for early adoption in the tokenization landscape.

Tokenized Real Estate: Success Through Specialization

Real estate is a segment of RWA where the benefits of tokenization are particularly evident. Tokenization allows for fractional ownership, increased liquidity, and lower barriers to entry for investors, making real estate investment more accessible and democratizing opportunities. Despite its apparent benefits, the sector has remained relatively dormant so far and is expected to be part of future waves of adoption. Nonetheless, some companies have gained significant traction in this space. For example, RealT has emerged as a successful project that offers fractional ownership of U.S. real estate.

RealT is a blockchain platform that powers fractional ownership of real estate using tokenization. RealT’s marketplace represents a dynamic platform for investing in and trading of tokens that represent ownership shares in specific U.S. properties. These tokens provide both proportional ownership and rental income and can be traded on secondary markets.

RealT’s monthly primary market sales now stand at around $2.9 million as of August 2024 with an all-time-high of $5.9 million:

RealT’s $2.9 million in monthly primary market sales is significant, especially when compared to traditional real estate metrics. In the U.S., the median home price as of mid-2024 is at $412,300 (Federal Reserve Bank of St. Louis. (2024)). Traditional real estate companies typically facilitate the sale of individual homes, meaning each transaction could represent just one sale. For example, a real estate agent might close on a few homes per month, with each transaction contributing significantly to their total monthly sales volume. A typical real estate brokerage might handle monthly sales volumes that vary widely depending on the size of the market and the number of agents. For a small to mid-sized brokerage, reaching $2.9 million in monthly sales could be significant, equating to approximately 7 home sales at the median price. Larger brokerages with multiple agents might handle higher volumes, but this still underscores the scale of RealT’s achievement when considering the fragmented nature of traditional real estate sales.

Large online real estate platforms like Zillow or Redfin facilitate billions in sales annually, but this is spread across vast markets with millions of listings. However, these platforms do not sell properties directly; they connect buyers and sellers, and their revenue comes from commissions, advertising and lead generation, not direct sales. For a company like RealT, which deals in direct sales of fractional property ownership, $2.9 million in monthly sales is significant given the more niche and emergent nature of the market.

In our previous report, we made an argument against the possibility of the mass adoption of real estate tokenization due to inability to tailor to the needs of individual investors, lenders, and tax authorities. RealT primarily deals with residential properties in the U.S. that are conducive to fractional ownership and tokenization. This implies that the platform might not be as versatile when it comes to more complex real estate transactions, commercial properties, or regions with less favorable legal frameworks for tokenization. Conversely, by focusing on a specific niche, RealT has been able to create a streamlined, scalable model that appeals to a particular segment of investors.

Tokenized Private Equity and Its Significance for TON

While the projects mentioned above focus on integrating RWAs with traditional financial institutions to attract institutional investors, TON’s approach to RWA is more DeFi-centric. Targeting regular DeFi users, TON enables them to diversify their portfolios by holding equity in private companies, a space that has traditionally been closed and opaque. MMPro exemplifies this by facilitating access and trading of tokenized private equity through the TON ecosystem.

MMPro is a new DeFi protocol on TON that offers tokenization of shares in companies like Ledger, Consensys (Metamask), Ripple, Circle, and Animoca Brands before they go public. Tokenized private equity involves converting shares of private companies into digital tokens on a blockchain, enabling fractional ownership and trading on digital platforms. This process makes private equity investments more accessible, liquid and transparent, aligning with the characteristics of the offerings provided by MMPro.

With MMPro Trust, investors can acquire fractional ownership in companies via RWA NFTs. These NFTs can then be traded on secondary markets, such as Getgems, and stored in Tonkeeper.

While TON’s RWA landscape is still in the early stages, examples like MMPro Trust demonstrate the potential to mobilize various aspects of the ecosystem, including secondary markets, wallets and the companies involved. This approach is valuable for ecosystem participants who can now diversify their portfolios with equity, as well as for individuals outside the ecosystem who traditionally invest in public stocks and seek to diversify with private equity. By bridging these worlds, TON’s RWA initiatives create new opportunities for both DeFi users and traditional investors, promising a dynamic future for asset tokenization.

Nevertheless, tokenized unlisted equity is likely to have a longer path to adoption. The regulatory landscape for unlisted equities is still evolving, which creates uncertainty and poses significant compliance challenges. Private companies also often have less transparent financials and more complex ownership structures, making it harder to assess their value and risks accurately. Unlike fixed income instruments, which have predictable returns and established markets, unlisted equities require robust due diligence and investor protections, further slowing the adoption process.

However, protocols that successfully navigate these challenges and establish themselves early in the market for tokenized alternative asset classes can benefit from a first mover advantage. By building trust, setting industry standards, and creating a network effect, these early adopters can position themselves as leaders and capture significant market share as the ecosystem matures and regulatory frameworks solidify.

Future Outlook

RWAs have faced significant cold start problems, hindering their initial adoption. This problem manifests in several ways: there is a lack of established liquidity and market participants, limited trust and recognition from traditional investors, and regulatory uncertainties which slow down adoption.

There have been notable mismatches between the offered tokenized products and their target markets, often due to a lack of apparent benefits from tokenization and limited buy-side demand. These challenges have led to substantial shifts in the RWA landscape over the past year, with institutions like BlackRock and Franklin Templeton now driving the adoption of more feasible and attractive tokenized fixed income instruments, which offer clearer advantages and align better with market needs.

TON is well-positioned to participate in the further waves of adoption of tokenized assets, including unlisted and listed equities, commodities and real estate. By that time, the regulatory environment is expected to be more established, bolstered by the success of use cases currently pushed by large institutions. This evolving landscape will present TON and other blockchains with opportunities to gain a first mover advantage in these second- and third-wave markets, leveraging their innovative DeFi-centric approaches to offer new and compelling investment opportunities.

Disclaimer: The tokens, exchanges, and yield instruments mentioned in this article are provided for informational purposes only and should not be interpreted as endorsements or investment advice. Readers are strongly advised to conduct their own thorough research before deciding to interact with, invest in, or participate in any transactions involving the mentioned tokens or yield instruments.

This public article is the result of an internal report conducted by The Open Platform.

As always, we continue to highlight key developments within each DeFi segment, unveil new projects, and outline the trajectory of TON’s DeFi ecosystem.

Q2 2024 was a transformative period for TON’s DeFi ecosystem, marked by a significant increase in liquidity and trading volumes following the launch of native USDt. This boost propelled TON/USDt pools on DeDust and STON.fi to become the largest multi-exposure pools with stablecoins across all blockchains tracked by DefiLlama. Additionally, the quarter saw impactful infrastructure launches. In this report, we will explore:

• Trends in the higher-level metrics
• Market dynamics within the liquidity pools of TON’s DEXs
• TVL performance of smaller protocols: EVAA Protocol and Storm Trade
• Launch of ION Finance, DEX Diamonds, and Tradoor
• The first solution to bring EVM capabilities to TON: TON Applications Chain (TAC)
• Introduction of TonFura, a decentralized development platform.

USDt-TON Launch Drives 7x TVL Growth in Q2 2024, TON’s DAAs Surpass Ethereum

Q2 2024 was marked by an explosion in blockchain usage metrics. One of the most notable events was the launch of native USDt on TON, which has provided a major boost to liquidity and trading volumes across all major DeFi protocols on TON. The accompanying incentives programs played a crucial role in driving user acquisition and enhancing the TVL across the ecosystem, with the number of wallets and monthly active wallets increasing by more than 200% over the quarter.

At the same time, TON’s average Daily Active Addresses (DAAs) have been on a steady upward trend since the start of The Open League. The growth has seemingly accelerated with the introduction of the native USDt on April 19th. In June, TON’s DAAs surpassed that of Ethereum:

This translates to TON ranking 7th by Daily Active Users and 8th by Monthly Active Users among Layer-1 blockchains as of July 29, 2024, according to Token Terminal.

These metrics were largely driven by the market dynamics on TON-based DEXs associated with the ongoing Open League and the incentive campaigns around the launch of USDt-TON.

DEX Liquidity Pools are Reaching Top Rankings Across All Networks

DEXs are regaining their TVL dominance, which previously belonged to Liquid Staking. This shift follows from the surge in TVL of liquidity pools on both STON.fi and DeDust, especially in pools for trading pairs with USDt-TON.

DeDust and STON.fi accounted for more than 50% of TON’s total TVL by the end of the quarter:

DeDust and STON.fi experienced a 10-fold and 5-fold growth in TVL respectively over Q2 2024, most of which occurred in June. This trend overlaps with the appearance of boosted TON/USDt LP pools on both DEXs.

When not accounting for the pools with USDt, STON.fi maintains its leadership, accounting for 61% of the DEX TVL in the ecosystem by the end of the quarter:

To boost the adoption of USDt-TON, TON Foundation allocated 10M in Toncoin to DeDust’s and STON. fi’s TON/USDt liquidity pools. Users can now earn ~50% APR on both DEXs by providing liquidity in TON and USDt-TON. As of this report, the TVL of the two pools reached $301.12M and $286.75, respectively, which makes DeDust the largest and STON.fi the second largest multi-exposure pools with a stablecoins across all blockchains that are tracked by DefiLlama:

This unprecedented event is highly valuable to the visibility of these protocols beyond TON’s community. TON-based DEXs are becoming a focal point for liquidity and decentralized trading that integrates TON into mainstream DeFi.

Smaller Protocols Show Strong TVL Growth in Q2 2024

While DEXs led the quarter with an absolute increase in TVL, EVAA Protocol and Storm Trade were top performers by percentage growth. Their growth, although impressive in percentage terms, reflects the smaller base from which they started:

EVAA Protocol’s spikes in TVL overlap with the large USD inflows in mid-May and mid-June. The first spike may have been influenced by EVAA announcing up to 100% APY on supplied $TON.

The increase in supply and borrow may have also been influenced by the attractive supply APY for USDt and the high demand for borrowing USDt, which may be used for various yield opportunities across the ecosystem. As of 29.07.24, USDt contributes 41% and 57% of EVAA’s supply and borrow markets, respectively.

Storm Trade’s surge in TVL overlaps with the tournament held as part of The Open League and the introduction of USDt vault, a yield optimizer that “aggregates liquidity from all markets and optionally directs it to staking protocols to optimize yield.”

Additionally, Storm Trade introduced multi-coin collateral this quarter. This new feature allows users to use multiple types of cryptocurrency, such as TON and USDt, as collateral for futures trading across various pairs. It is meant to greatly improve the user experience by increasing asset utilization and reducing the need for frequent cryptocurrency conversions.

New DEX Models are Entering the Ecosystem

Two projects with alternative trade execution models and a new derivatives DEX were introduced to TON this quarter.

ION Finance is the first concentrated liquidity DEX on TON that employs an order execution model based on a “bin” system within its Hybrid Order Book AMM. This system allows liquidity providers to allocate their funds into specific price segments, or bins, making liquidity more efficient and reducing slippage. Each bin represents a distinct price point, ensuring that liquidity is concentrated where it is most needed. This method optimizes returns for liquidity providers by focusing their capital in high-demand areas and enhances the trading experience by offering better prices and more efficient trades. Learn more about ION Finance’s order book AMM.

DEX Diamonds, a new jetton DEX aggregator, has launched its Telegram Mini App. The platform aggregates liquidity from STON.fi and DeDust. DEX aggregators like DEX Diamonds work by combining liquidity from multiple decentralized exchanges into one platform. This approach provides users with better token prices and lower slippage due to the increased aggregated liquidity compared to individual DEXs. Additionally, DEX aggregators simplify the trading process by allowing users to execute trades across various DEXs without needing to compare prices or navigate multiple interfaces manually. This results in a more efficient, cost-effective, and user-friendly trading experience, making it easier for traders to find the best rates and execute larger trades seamlessly.

Tradoor is a new derivatives DEX on TON, designed to provide seamless and efficient trading experiences for users with up to 100x leverage on its Bitcoin and Ethereum Perpetuals. Tradoor presents itself as NDMM, or Normal Distribution-Based AMM. NDMM is a unique pricing mechanism that leverages advanced mathematical models to ensure efficient pricing, enhancing trading and LP experience. The NDMM mechanism calculates the deviation rate for each trading pair based on the difference between long and short positions and then determines the premium rate using a normal distribution function. This approach ensures that liquidity providers always act as passive counterparties, transacting at a consistent price, which mitigates risks and maintains market stability (source).

TON Achieves EVM Capabilities with TON Applications Chain (TAC)

TON is a non-EVM blockchain, meaning it does not natively support Ethereum Virtual Machine (EVM) — the runtime environment for smart contracts on Ethereum. Examples of non-EVM blockchains include Bitcoin, Solana, and Polkadot. These blockchains may benefit from EVM capabilities because integrating EVM would allow them to leverage the extensive ecosystem of Ethereum-compatible tools, dApps, and developer expertise. However, bringing EVM capabilities to non-EVM chains is complicated due to differences in underlying architectures, consensus mechanisms, and programming languages, which require significant engineering efforts.

We previously discussed the possibilities for bringing EVM capabilities to non-EVM chains. Finally, TON achieved EVM compatibility through a new Layer 2 solution based on Polygon’s technology. TON Applications Chain (TAC) is a new protocol that facilitates this integration by leveraging Polygon’s zkEVM. Polygon was chosen as the base for EVM compatibility to allow TON to maintain its high throughput and low latency while leveraging Polygon’s expertise in creating scalable and efficient Layer-2 solutions.

The combination of EVM capability and TON’s integration with Telegram creates unique synergies by enabling seamless access to Ethereum-compatible dApps and smart contracts directly through the widely used Telegram platform. This integration can drive mass adoption by making Ethereum-based DeFi dApps more accessible to Telegram’s vast user base. Users can manage assets, interact with dApps, and execute smart contracts within a familiar environment, fostering broader engagement and enhancing the reach of both TON and Ethereum ecosystems.

Enhancing dApp Development on TON: Introducing TonFura

This quarter saw the launch of TonFura, a decentralized platform designed to provide fast and efficient services on TON. TonFura aims to improve the overall performance and scalability of applications on the network, offering developers powerful tools to build and deploy high-performance dApps effortlessly.

TonFura’s core products include TonFura SDK, which provides developers with a comprehensive toolkit for building and managing dApps, and TonFura API, which offers seamless access to blockchain data and services. Learn more in TonFura Documentation.

TonFura complements TON API, a comprehensive interface that simplifies access to TON blockchain’s functionalities, enabling developers to manage dApps, tokens, and payments while offering advanced data analytics and seamless integration with various blockchain services. TON API is an established platform deeply integrated across a variety of TON’s web3 landscape segments. Some of TON API’s DeFi integrations include STON.fi, DeDust, Tonstarter, and TON Whales.

TON API, part of TON Apps ecosystem, plays a crucial role in providing seamless access to blockchain data and services, including innovative features like W5 Standard, which allows TON builders to enhance their dApps with gasless USDt payments. The platform offers tools for performing detailed blockchain analytics using SQL queries and visualizing account connections, enhancing the depth and usability of data analysis. Additionally, TON API supports various integrations, such as payment processing, making it easier for developers to set up crypto payment flows and manage transactions efficiently.

Future Outlook

The launch of the native USDt has had a profound impact on TON ecosystem. USDt-TON has provided the necessary liquidity foundation, while the rise of DEX activity has catered to the growing demand for decentralized trading. This drove the liquidity pools of TON-based DEXs to achieve top rankings across all blockchains, which is an unprecedented milestone.

While these developments are highly positive, it’s crucial to acknowledge the potential risks associated with the future end of liquidity boosts. Once the incentive programs conclude, there could be a significant outflow of liquidity as users move their assets to other opportunities offering higher returns. This scenario could impact the stability and attractiveness of TON’s DeFi ecosystem in the short term.

To mitigate these risks, the TON community and developers need to focus on creating sustainable value propositions and long-term incentives that go beyond temporary boosts. This includes building more innovative DeFi applications, enhancing user experience, and continuously engaging with the community to maintain interest and participation.

DeFi is the lifeblood of a thriving on-chain ecosystem, enabling economic activity and liquidity. It unlocks consumer and enterprise use cases by offering access to capital and facilitating fast, cheap transactions.

In Q2, TON made significant strides with the launch of native USDt and several breakthrough apps, leading to a 3x growth in MAW and a 7x growth in TVL. Having a native stablecoin will enable DeFi to trade larger volumes and facilitate commerce through payments. This growth is driven by major entities like @wallet and Ston.Fi, which support the surge in consumer activity with their infrastructure and liquidity.

We are still in the early stages of TON DeFi, but we are already witnessing the emergence of a vibrant ecosystem and believe in the future of the open economy for all!

Einar H. Braathen, Web3 investor @ CoinFund

The introduction of W5, a standard for gasless USDt payments developed by Tonkeeper, adds another layer to USDt-TON’s utility. By allowing users to pay gas fees using the same tokens they are transferring, W5 encourages more users to participate in TON ecosystem but also attracts developers looking to build cost-effective and efficient applications.

The synergy between TON-based DeFi, Telegram, and the latest infrastructure updates, such as TON Applications Chain, caters to both proficient DeFi enthusiasts seeking to benefit from interoperability and emerging markets, as well as a broader audience that needs easy onboarding onto both TON and Ethereum ecosystems.

EVM capabilities present TON with multiple growth opportunities. In future reports, we will explore how the seamless deployment of Ethereum-compatible smart contracts will enhance diversity, competition, and decentralization across various DeFi segments on TON.

Do you have ideas about bringing more value and utility to our DeFi ecosystem? DM us on Twitter or visit our official website: https://top.co.

Disclaimer: The tokens, exchanges, and yield instruments mentioned in this article are provided for informational purposes only and should not be interpreted as endorsements or investment advice. Readers are strongly advised to conduct their own thorough research before deciding to interact with, invest in, or participate in any transactions involving the mentioned tokens or yield instruments.

This public article is the result of an internal report conducted by The Open Platform.

On April 19th, Pavel Durov, CEO & Founder of Telegram, Paolo Ardoino, CEO of Tether, and Andrew Rogozov, CEO of TOP & Wallet, announced the launch of native USDt on TON at TOKEN2049. USDt-TON was designed to revolutionize peer-to-peer payments, allowing Telegram users to make USDt transfers instantly by simply sending a direct message to their contacts.

With a total circulation of $580 million in just 3 months since its launch, USDt is already deeply integrated with most of TON’s major protocols and dApps. This post will explore the emerging trends surrounding USDt within TON’s ecosystem and its role as a Digital Dollar. We will delve into:

— The premise for introducing native USDt to TON and its significance in the long-term strategy of TON and Telegram

— Gasless USDt payments on TON

— The context for USDt-TON’s adoption figures compared to similar metrics on other blockchains

— The adoption markers of USDt-TON within the TON ecosystem

— The current and future impact of USDt-TON on TON.

USDt-TON Ranks 10th by Total Circulation Among Other Chains

Soon after the launch announcement OKX, KuCoin, MEXC and ByBit enabled the USDt-TON deposits and withdrawals. The launch on the these exchanges was accompanied by free withdrawals to TON and promotion campaigns. OKX, KuCoin and ByBit held the USDt-TON Learn and Earn campaign in partnership with TON Foundation, where participants shared a prize pool of 20,000 Toncoin (~$140,000), $200,000 in Toncoin and 120,000 USDt respectively.

Simultaneously, 10 million Toncoin were allocated by TON Foundation to liquidity pools on STON.fi, DeDust, as well as Wallet Earn. The following sections will explore the metrics related to the adoption of USDt-TON on TON-based DEXs in more detail.

3 months since its launch, USDt-TON is supported by over 60 partners, including multiple global exchanges and is available on all TON-based wallets and DEXs:

Traction within the TON ecosystem and on numerous global platforms translates into robust adoption metrics. As of this report, USDt-TON reached:

• $580,000,002 market capitalization / total circulation
• 37,811,230 TON TVL (~$269.23M)
• $11,349,242 24H trading volume
• 487,698 holders

Sources: TON App, DYOR.io, Tonalytica Redoubt. Accessed on July 9, 2024.

This means that USDt-TON has achieved the 10th ranking by total circulation among other chains. With Tether’s total circulation at 112.19 billion, this contributes 0.52% to its market capitalization.

This also makes USDt-TON the fastest growing standard for USDt. In 3 months post-launch USDt-TON outperformed any other USDt standard by total circulation among those that are tracked by Tether:

This robust start, highlighted by the high-level metrics, indicates strong initial adoption of USDt-TON. To truly understand its impact, we will explore USDt-TON’s impact on segments of TON’s DeFi landscape in more detail.

USDt-TON as a Solution for Seamless P2P Payments on Telegram

Before the adoption of the native USDt, jUSDT served as the official USDt. jUSDT is a wrapped token based on the original USDt ERC-20 (Ethereum) or BEP-20 (Binance Smart Chain) standards. Holders of the original USDt needed to use TON bridge to convert their tokens to jUSDT to interact with the TON ecosystem.

jUSDT was widely adopted in the ecosystem prior to the launch of the native USDt and was used in trading pairs on major DEXs on TON (STON.fi and DeDust). Some protocols, like DeDust, built their UI based on the official bridge to simplify the onboarding process for users from other chains. Others, such as Storm Trade — a derivative exchange on TON — found their way around the bridging and allowed users to place collateral in Toncoin instead of jUSDT.

Still, the lack of a one-step solution for transitioning between fiat and a stable currency that would seamlessly integrate with TON/Telegram’s payment infrastructure, the Mini Apps ecosystem, and web-based dApps on TON acted as a major barrier to onboarding regular Telegram users who may not be as familiar with crypto.

Native USDt was introduced to address this challenge. USDt-TON streamlines Telegram payments, allowing users to purchase Digital Dollars on TON without needing a wallet address, making peer-to-peer transfers as easy as sending a message:

The launch of native USDt is part of a broader strategy to enable nearly 900 million Telegram users to engage in seamless peer-to-peer crypto payments directly within the app. Native USDt allows users to send and receive the stablecoin instantly and directly to their Telegram contacts worldwide. TON’s infrastructure supports this by offering built-in on-ramps for easy purchase of USDt with fiat.

The integration is complemented by Telegram Wallet, the Mini App infrastructure, major exchanges that exist as Mini Apps and can be accessed directly in Telegram (such as STON.fi and DeDust), and other TON dApps present on Telegram.

Gasless USDt Transfers Now Available on TON

Tonkeeper has introduced a game-changing feature: gasless USDt payments with W5 wallet. Now available as a public beta, this innovative advancement allows users to make transfers instantly and seamlessly, without worrying about the technicalities of managing transaction fees. This major update is meant to enhance accessibility for smaller holders and new users.

W5 standard simplifies the transaction process by enabling users to pay network fees using the same token being transferred, eliminating the need to hold Toncoin to cover fees. This not only enhances accessibility but also significantly accelerates the adoption of blockchain for everyday financial activities. Learn more about gasless payments on TON here.

Alternatively, blockchain fees can be covered using Tonkeeper’s Battery feature. The Battery can be “charged” by sending a few dollars’ worth of tokens to a special address or through in-app purchases and used to power transfers, swaps, staking, and NFT transactions.

Gasless transactions with W5 are also available to developers building projects based on the TON API, which is part of the TON Apps ecosystem alongside Tonkeeper. We can expect wider adoption of gasless USDt payments on TON in the near future. This update marks a significant step towards making crypto transactions as accessible as traditional financial transactions, removing the complexity and barriers typically associated with cryptocurrency use.

Native USDt Achieves Market Dominance Across Major TON Protocols and dApps

In the first 3 months since its launch, native USDt achieved a TVL of $269.23 million, attributed to its dominance in TON’s main DEXs and most adopted DeFi protocols. As of this report, USDt-TON is integrated into most of TON’s DeFi ecosystem components.

Checklist: USDt-TON interaction with TON DeFi

Several data points effectively demonstrate the extent of USDt’s adoption.

TVL and Trading Volumes

The majority of trading with USDt-TON occurs on DeDust and STON.fi. The total pool volume from trading pairs with USDt on both DEXs has exceeded $50 million, while the TVL continues to reach new highs as we release this post.

The TON/USDt pool is now the leading pool on STON.fi, with a TVL of $224.43 million:

Similarly, TON/USDt is a now the largest pool on DeDust with a TVL of $326.78 million:

USDt now ranks first by the amount borrowed and available for supply on Evaa Protocol, the lending protocol on TON:

Holders

The amount of holders reached 489.16K as of July 9, 2024:

Notably, the amount of USDt holders now largely exceeds the ATH amount of jUSDT (bridged USDt) holders:

The halt of minting new jUSDT is at least partially responsible for the fluctuating number of holders for USDt-TON and jUSDT. Holders of jUSDT can now bridge their USDT back to Ethereum without a percentage fee through bridge.ton.org. Bridging jUSDT to USDT ERC-20 will be supported as long as there are jUSDT holders.

Minting of new jUSDT stopped on June 10, 2024. Holders are now able to swap their tokens for USDt-TON on DEXs in addition to transferring jUSDT to USDt ERC-20. TON Foundation announced that they will add liquidity to the jUSDT-USDt pools in the upcoming weeks.

Performance Compared to Other Jettons

USDt accounts for over 90% of the native jettons’ TVL for the last 30 days as of July 9, 2024…

…and ranks first in terms of 30-day market volume:

What Does This Mean for TON

The native issuance of USDt-TON means that developers and users can trust that their asset is always redeemable 1:1 for US dollars and is issued by Tether, a regulated entity. Shift to native USDt also eliminates the bridge exploit risk, which has been a significant concern in the crypto world. Users no longer have to rely on third-party bridges, which are often susceptible to security vulnerabilities and exploits.

Additionally, having a single official version of USDt on TON makes the user experience uniform and not fragmented, allowing for more seamless and consistent interactions. This uniformity and trust are connected into a smooth cycle of seamless on- and off-ramp processes, low-cost and intuitive transfers, and interactions with TON-based DeFi, GameFi, NFT, and social platforms. As users and developers become more accustomed to native USDt, the user experience within TON becomes increasingly streamlined and efficient.

Summary of the Findings and Future Implications

The findings indicate that native USDt replaces bridged jUSDT in most on-chain activities and attracts new holders. This is evident from the decreasing trading volume of jUSDT since the introduction of native USDT, while the number of USDt holders now surpasses the peak counts of jUSDT.

The launch, however, is more about long-term engagement and less about immediate on-chain activity metrics. Onboarding Telegram’s vast user base of 900 million will take time. Still, it is a critical step towards achieving TON’s goal of becoming a standard for instant, low-cost transfers across the globe without barriers for non-tech-savvy individuals, making financial transactions as accessible as sending a message.

USDt has reached 10th position in total circulation among other chains in 3 months since its launch. As more Telegram users begin to adopt USDt, there is a real possibility that it could rival major chains like Tron and Ethereum in terms of adoption.

How to start using USDt on TON?

• Purchase USDt within Telegram Wallet via your bank card or on the P2P exchange. Learn more at ton.blog.org
• Start earning rewards on your USDt deposit with Wallet Earn in Telegram Wallet
• Check out the liquidity pools on STON.fi and DeDust (or in the Mini Apps: STON.fi, DeDust) to start earning rewards with LP boosts on pairs with USDt.

Are you a builder with ideas about bringing more value and utility to our DeFi ecosystem? DM us on Twitter or visit our official website: https://top.co.

This post was created by Kirill Malev, Junior Partner at TOP, and was originally published on his Telegram channel.

In the digital age, capturing and maintaining attention has become the ultimate currency. But what if we could quantify attention in a new way? Enter what I see as the ‘Attention Points Economy’ — a concept where simple interactions turn into some points, reshaping how we engage and learn something new online. This isn’t just about aimless clicking, it’s about turning every tap, click, swipe or any other interaction into points, transforming our online time and learning path into something measurable, with economic value attached. The Attention Points Economy is an interesting experiment on how we work with attention on a large scale

The Telegram Mini Apps Phenomenon

Consider some of Telegram’s Mini apps, like Notcoin and Hamster Kombat, both smashing it with user interaction. Notcoin, with its simple yet addictive mechanics, has grown to about 35 million users and even launched its own token. Hamster Kombat, attracting over 100 million users, thrives on the basic concept of a counter going up with each interaction.

These games aren’t just about mindless fun — they’re all about engaging users with every click, with obvious gamification turning interactions into points. Simple? Yes. Effective? Absolutely.

Points Over Clicks

Apps like Blum, HotWallet, and PocketFi demonstrate this shift to an Attention Points Economy clearly. Blum is rocking 22 million active users and HotWallet’s crushing it with 8 to 10 million on-chain active users.

The magic ingredient? Points. Users aren’t just aimlessly clicking — they’re chasing those sweet, sweet points. It’s simple: a rising counter equals value and a sense of achievement, paired with expectations of possible economic rewards. It’s not just a trend; it’s a subtle, yet powerful, game-changing shift.

Why Points Matter

Points aren’t just numbers — they’re digital gold. Every point quantifies attention, turning casual clicks into valuable data. For users, watching those points rack up is a dopamine hit that’s hard to resist, creating a rewarding feedback loop. Economically, it’s genius. Points are evolving into a new sort-of-currency, redefining how we value and monetize attention in our digital world.

But it’s not just users who benefit. For app developers, these points translate into deeper engagement and higher retention rates. Points make it easier to commercialize apps by offering in-app purchases, premium features, and targeted advertising. Developers can leverage this attention economy to build profitable, sustainable businesses. So, points are not just a win for users — they’re a game-changer for developers, too.

From Points to Economy

Here’s where it gets even more interesting. This is no research paper, but from what I see, it looks like those points lead to the emergence of trading. I suspect that there must be a good psychological or sociological explanation to it, but now everyone can see that users naturally start exchanging those points in different forms (for example through selling Telegram Accounts with or without the SIM card) effectively creating micro-markets inside those apps. Imagine what happens once the app starts supporting TON Connect and those points come on chain.

The Role of TOP.co

At TOP.co, we’re not just spectators — we’re excited to be architects of this new world. We’ve backed Open Builders, the brains behind Notcoin, and we’re watching closely as builders dive deeper into creating market-fitting use cases.
Our vision is to see these micro-economies blend into a massive, decentralized ecosystem, opening up endless possibilities for digital engagement and, possibly, identity.

What’s Next?

The Attention Points Economy isn’t just a cool new term — it might be close to a seismic shift in how we value digital interactions. This trend is turning clicks into gold, making our online time more meaningful and economically powerful.

Is it merely a trend or will it lead to a revolutionary future? Well, it’s certainly something to keep a close eye on. If you are working on something which seems to be on par or surpassing the pace of Notcoin or Hamster Kombat, drop me a line. We are able to support your growth and we definitely speak the same language.

Disclaimer: The tokens, exchanges, and yield instruments mentioned in this article are provided for informational purposes only and should not be interpreted as endorsements or investment advice. Readers are strongly advised to conduct their own thorough research before deciding to interact with, invest in, or participate in any transactions involving the mentioned tokens or yield instruments.

This public article is the result of an internal report conducted by The Open Platform.

As always, we continue to highlight key developments within each DeFi segment, unveil new projects, and outline the trajectory of TON’s DeFi ecosystem.

7-Fold TVL Growth Marks Q1 2024

The memecoin hype was a central theme in the TON DeFi space and the general crypto landscape in Q1 2024, which is at least partially responsible for the surging on-chain activity and DeFi metrics:

One of the main highlights of the quarter is the 7-fold increase in TVL, mainly fueled by the increased activity on DEXs and the market dominance of Tonstakers, the liquid staking protocol.

Another key theme is the launch of The Open League. This program rewards users for interacting with TON projects and features a competition with a Toncoin prize pool that rewards TON-based projects with the strongest performance during each season. The key element of the program is the farming pools with boosted APYs. The introduction of the farming pools, along with surging memecoin trading volumes, contributed to DEXs being the best-performing DeFI segment on TON based on TVL performance:

In the following section, we will explore the patterns behind the surging performance of TON-based DEXs in more detail.

DEXs: The Open League Meets the Memecoin Hype

Tokens on TON blockchain, also known as jettons, saw a dramatic surge in popularity in the last quarter of 2023, which continues to this day. Memecoins largely fueled the increase in trading activity.

The rally was chronologically preceded by the launch of Notcoin, a previously untradable memecoin that could be ‘mined’ by anyone by clicking a button in the Notcoin mini app on Telegram. Within just a few months of its launch, Notcoin attracted 35 million active users. Now listed on multiple DEXs and CEXs, Notcoin has inspired a variety of meme jettons with similar mechanics. This proliferation of jettons was one of the major drivers of the spike in trading volume on TON-based DEXs.

The memecoin hype attracted a lot of attention to DeDust and STON.fi, two DEXs that listed a substantial share of these tokens. According to data from Tonalytica, the total trading volume on DEXs on TON reached $4.2 million at the 90-day all-time-high. The all-time high was renewed in Q2 and now exceeds $60 million:

Below is the screenshot from our internal analytical tool displaying the trading volume on both DEXs. The pattern closely aligns with the one on Tonalytica’s chart:

STON.fi and DeDust act as the main venues for the boosted liquidity pools, an incentive initiative of The Open League. This resulted in more than a 9X increase in TVL on TON with a significant contribution from both DEXs over the course of the program’s first three seasons. With Season Three already in progress, readers can check the available boosted pools at STON.fi and DeDust and visit The Open League Pools bot.

STON.fi ranked first in the DeFi competition held as part of The Open League’s Pilot Season, followed by DeDust. The ranking was based on the change in TVL and the protocol fees earned during the Pilot Season. The final rankings can be accessed here.

One of the themes of Q1 2024 was the introduction of Telegram Mini Apps by both major DEXs. DeDust and STON.fi now have their own Mini Apps, which will make the trading experience more versatile and allow users to execute trades right in Telegram. This may be particularly convenient for traders who use Telegram-based token research tools and news channels.

Additionally, Storm Trade, currently the main derivative exchange on TON, now allows traders to use Toncoin as collateral for trading futures. This update eliminates the necessity of converting TON to jUSDT to place collateral, simplifying the user onboarding process and assigning Toncoin additional utility in the ecosystem. Additionally, Storm Trade completed its largest rewards program ever with a prize pool of approximately $130,000 as part of The Open League. The rewards are distributed to top performers in trading volume, PnL rankings, and liquidity provided in designated pairs.

Liquid Staking Propels TON into the Top 20 Chains by TVL

Liquid staking remains the dominant sector by TVL in TON. According to DefiLlama, TON ranks 17th by TVL as of this report, when accounting for Staking and Liquid Staking values.

Tonstakers won the liquid staking competition of The Open League’s Pilot Season, followed by bemo and the new liquid staking protocol Stakee, and remains a leader by TVL market dominance. Similar to the DeFi competition, the ranking was based on the change in TVL; another metric used was the number of new users who joined the protocol during the respective period.

Stakee (Stakee Bot) is a new liquid staking protocol on TON. Stakee blends simplicity, reliability, and high APYs to attract Toncoin holders seeking enhanced gains with minimal fees. The platform ensures secure and transparent transactions by operating on official smart contracts developed by TON Foundation.

Additionally, TON Whales launched Whale Liquid, a new liquid staking pool. The protocol allows Toncoin holders to earn wsTON, which can be swapped on DeDust, and lending protocols on TON. The project is currently in beta with a total stake of 848K Toncoin (over $5M).

Lending: EVAA Protocol Goes Live on TON

Evaa Protocol went live on TON Mainnet. As of this report, Evaa features $26.10 million in total supply and $12.03 million in total borrow.

EVAA Protocol held a Supply & Borrow campaign as part of The Open League. The campaign offered a unique opportunity for users to lend or borrow tokens such as TON, stTON, tsTON, jUSDC, and jUSDT via the EvaaAppBot or on app.evaa.finance. The participants earned weekly airdrops, interest rewards for supplying and borrowing activities, and EVAA XP points, which will be exchangeable for EVAA DAO Tokens in the future.

While the campaign has officially ended, the reward pools with attractive APYs are still available in the app:

Similarly, DAOLama held a farming season and introduced Reward Points (RPs), an internal token designed to incentivize users through their in-app activities. Every loan issued earned RPs, which can be exchanged for $LLAMA. The promotional period ended on March 30, and users can now trade the token on STON.fi and DeDust.

RedStone is the First Oracle Solution on TON

Oracles are crucial components in blockchain technology because they act as bridges connecting blockchains to the outside world. They provide a reliable way to feed external data onto a blockchain, such as token or stock prices. This capability is vital for enabling smart contracts — self-executing contracts with the terms directly written into code — to interact and react to external events.

RedStone becomes the first oracle available on TON, which marks a major milestone in the data integrity for TON-based DeFi.

RedStone highlights that TON, with its asynchronous and fully decentralized nature, required a significant shift from the usual integration methods, involving more complex inter-contract messaging instead of straightforward contract interactions typical in other blockchains. Looking ahead, RedStone aims to bolster TON’s DeFi ecosystem through a new relayer system for consistent price updates, smart contract templates for easier integration, and advanced data feeds to meet the growing needs of TON-based DeFi. Learn more about the integration here.

Future Outlook

Jettons on the TON blockchain are carving out a unique niche, representing a diverse spectrum of digital assets that go beyond traditional utility. While some of these jettons may have yet to define practical applications clearly, they still hold an important place in the broader ecosystem.

Surging interest in these diverse assets can be the starting point for a larger process: the increasing demand for DeFi infrastructure to meet the capital efficiency requirements of token holders. We can already see evidence of this with the success of the incentive campaign as part of The Open League.

To be honest, since I discovered TON in 2022, I have never believed in it. NEVER. I thought, “It would be just another ghost chain.” But as you see, it didn’t. My first interaction with TON was at the end of 2022 when I had mid-2 figs in crypto (yes, 2-figs) and won a giveaway.

The admin of this Telegram channel DM’d me and said, “Yo, can I send you your prize in TON on Telegram wallet?” I was just like, “What? Telegram wallet?” He kindly explained it all and sent me a prize. It was $10, by the way. Thank goodness TON has low fees so I sent it to CEX.

When I started writing threads and leveraging content creation by learning 24/7, I became deeply involved in marketing strategies. For some reason, I did not like TON’s marketing strategy back then. 6 months later, I still do not fully like their marketing strategy. But as we see numbers of TVL and TON price, it was effective, despite my opinion.

I started hearing about TON from normies who weren’t involved in crypto at all. TON is cheap, accessible, and easy-to-understand. This is why normies were farming Notcoin a lot. At the moment of writing, TON is at #9 in “Today’s Cryptocurrency Prices by Market Cap,” according to CoinMarketCap.

Despite the fact there are many things to improve, just like marketing (hello Const), TON will be paid more and more attention in the future. Numbers of active users, TVL, and TON market cap are crazy, and I truly didn’t expect this flywheel.

defizard, The ZKasino Survivor & The Derivatives Monke Slayer

As the DeFi landscape on TON becomes increasingly complex, the demand for reliable and secure oracle services will grow. RedStone’s efforts in this area suggest a trend towards the higher-level data integrity on TON. We can expect oracle solutions to penetrate the ecosystem further in the near future.

What to build on TON now?

We look forward to seeing:

• Solutions that bring EVM capabilities to TON
• DEXs with non-standard order execution models, including limit order book-based exchanges
• Autocompounders/yield optimizers

Do you have ideas about bringing more value and utility to our DeFi ecosystem? DM us on Twitter or visit our official website: https://top.co.

TLDR:

• Match-3-type games (Candy Crush Saga, Homescapes, Sheep a Sheep in WeChat, Pirates’ Treasures in VK, etc.) stand out compared to other genres within social network gaming. They compete in mobile revenue even with PUBG and Genshin Impact while being singnificantly less complex in terms of gameplay and development. Sports/simulation games (especially card games and pool) and endless runners are also popular on social networks. RPGs are leading on WeChat and QQ, while dating games are popular on VK.
• Common monetization models used in web3 games are in-game purchases of items, upgrades, repairs, and boosts; NFTs representing characters or items and tickets to game events and tournaments; in-game NFT marketplaces; in-game DEXs; and staking.
• There is a lot of overlap between casual web3 and web2 games in terms of monetization due to similar game mechanics, such as stats, leveling, health/mana systems, and the ability to personalize gaming experiences by changing the visuals and stats of characters or items. The main difference, however, is the ability for web3 games to carry the value of in-game assets outside of the game, allowing for revenue generation from secondary markets such as DEXs, NFT marketplaces, or staking fees.
• It appears feasible for TON to initially prioritize match-3 type games due to their competitiveness, the potential for revenue generation, and suitability for a “mini-game” format. Additionally, we can explore other genres, such as platformers, endless runners, card games, and simulators.
• The traditional monetization models used in Web2 casual gaming could be enhanced by providing utility of the in-game assets outside of the game through token staking, yield farming, sale of NFT, and secondary markets for trading in-game assets. Additionally, play-to-earn mechanics and NFT ticketing for special game modes, tournaments, and events could be introduced to most casual genres, including match-3 games.

This public article results from an internal report conducted by The Open Platform.

Accelerating Blockchain Startups to Escape Velocity. https://top.co/

Our previous post introduced our readers to Telegram’s new Web3 Ecosystem. In the context of Telegram’s evolution into a comprehensive Web3 ecosystem, gaming, particularly through Mini Apps, emerges as one of its central pieces. This article explores the domain of casual Web3 games, emphasizing their compatibility with the Mini Apps format. The decision to focus on casual games is heavily influenced by their proven success within similar frameworks in major messaging applications, notably WeChat.

Continuing the exploration of Telegram’s Mini Apps in the context of casual Web3 games, it’s crucial to consider the inherent convenience of this format. The mini apps’ architecture eliminates the need for downloading separate applications, as users can access games directly within the chat interface. This feature significantly simplifies the onboarding process, making it more user-friendly, especially for those new to gaming or Web3 environments.

Games on Telegram are currently a highly trending topic. Many game developers, not limited to just Web3 games, are eager to publish their games in Telegram. There are several reasons for this, but Telegram’s massive audience of 800 million users and low penetration of games are major attractions.
Equally important is the integration of @wallet in Telegram, which opens up numerous opportunities for experimenting with new genres, monetization methods, and user engagement.
At TON Foundation, we receive a tremendous number of inquiries from game developers about what games to create for Telegram and how to seamlessly integrate them into TON and Telegram. This overview provides valuable insights, particularly for teams that are new to developing instant games on social networks and messengers, venturing into a new vertical for themselves.

Inal Kardanov, Gaming Lead at TON Foundation

By integrating games into the familiar interface of a widely used messaging app, Telegram effectively reduces barriers to entry and allows for seamless interaction with games in an environment where users are already engaged.

As per Telegram’s guidelines on gaming bots, this integration facilitates instant playability and encourages social interaction around gaming experiences. The Web3 monetization elements can add a new dimension to these interactions by allowing users to exchange assets with utility that is also present outside of the game.

A lot can be learned from Web2 gaming by Web3 developers, and the first step in building Telegram’s Web3 gaming landscape is to analyze the successes of similar games on other social networks. Understanding the revenue drivers in traditional gaming will inform our direction in the casual gaming genre. Then, we can explore how these traditional monetization models can be enhanced with Web3 elements. This strategic approach aims to blend proven gaming methodologies with the unique capabilities of Web3, redefining the casual gaming landscape in the process.

The Current State of Social Network Gaming

As we delve into the dynamic gaming world within social networks, we must consider the historical context and evolution of gaming on platforms like Facebook, WeChat, and TikTok. These case studies offer invaluable insights into the potential trajectory of gaming on Telegram. However, it’s important to recognize that Telegram’s journey will be distinctly shaped by its close ties with TON and its unique Web3 ecosystem. This connection to Web3 brings a new dimension to the gaming experience, one that is still learning and adapting from the foundations laid by Web2 gaming. This section explores how popular platforms have successfully integrated gaming into their ecosystems, providing a framework for understanding Telegram’s potential path in this evolving landscape.

Facebook Gaming

Facebook Instant Games is a gaming platform accessible directly within the Facebook and Messenger apps, offering a diverse range of free-to-play games that users can enjoy without the need for downloads or installations. Please note that gaming features are only accessible via the main Facebook app, but iOS and Android gaming are not available anymore (source).

Despite changes, Facebook Gaming remains popular, with major match-3 titles like Candy Crush Saga by King, Coin Master by Moon Active, and Homescapes by Playrix among the most played, reflecting a demand for casual “time-killer”-type games. Facebook Gaming has managed to secure a strong user base with 350 million monthly active users as of today.

WeChat Mini Games

WeChat Mini Games emerged in 2017, complementing the app’s mini-programs. The games offer casual gaming experiences perfect for social play and time-killing, enhancing the overall WeChat ecosystem.

Users can access games directly within the WeChat app without separate downloads or installations. WeChat provides a frictionless transition from chatting to gaming, boosted by social connectivity. Players can easily play with friends, share scores, and challenge each other, making the games more engaging and viral. This social aspect is a significant draw, as it taps into the existing relationships and networks on WeChat. The platform offers a diverse game library across various genres, catering to different tastes and preferences. From puzzle and strategy games to action and adventure, there’s a broad selection to keep users engaged.

WeChat’s mini-games alone draw a staggering 400 million monthly active users, cementing the platform’s dominance in China’s social gaming scene and illustrating the power of integrating gaming within a multi-purpose app.

VK Games

VK Games is a gaming platform integrated into the popular Russian social media network VKontakte (VK). It offers a wide variety of free-to-play and social games that users can enjoy directly within the VKontakte platform, allowing them to compete with friends and connect with other gamers.

With popular titles such as Spin the Bottle: Meet and Chat by Cyboma, boasting 30 million players, VK Games has carved out a formidable presence in social gaming, fusing the gaming experience with social interaction. Other notable titles are Pirate Treasures: Jewel & Gems by TAPCLAP and the Indy Cat series by PlayFlock, with the former boasting 50M+ downloads on Google Play. Both are match-3 puzzles with simple and addictive mechanics. The platform’s top games span genres from dating simulations to traditional card and puzzle games.

VK Games caters primarily to a Russian-speaking audience, with games that often include cultural references, language localization, and themes that resonate with this demographic. This localization makes the games more appealing and relevant to the VK user base.

TikTok Mini Games

TikTok’s new gaming pilot was quietly launched in mid-2022 with partners including game developers Voodoo, Nitro Games, FRVR, Aim Lab, and Lotum. At launch, the HTML5 gaming titles included Basketball FRVR by FRVR, Tap the Difference by Lotum, Peek-a-Who and Space Destroyer by Nitro, Pride Run and Influencer Run by Voodoo, and Mr. Aim Lab’s Nightmare by Aim Lab (source). There is also a TikTok exclusive title, Disco Loco 3D, by Zynga.

Later, in 2023, TikTok leaned further into games with a UK test of in-app minigames. The instantly playable games are accessible through a tapable box above the TikTok user’s name, according to mobilegamer.biz. The report mentions additional titles like Barricade Yourself Inside by Voodoo, Beauty Salon by Playable Factory, Color Galaxy by Gismart, Couple Challenge by Matchingham Games, Fortune Teller by Gamelancer, Kitten Force by FRVR, and Love Tester by Famobi. These titles fit into casual gaming format with genres ranging from infinite runners to space shooters and puzzles.

Douyin Mini Games

Games have been playable through Douyin, the Chinese version of TikTok, since 2019, according to scmp.com. Similarly to games on TikTok, titles like Yinyue Qiuqiu and Sheep a Sheep tap into the casual genre and explore the addictive puzzle mechanics, with the latter going viral in 2021.

Douyin’s gaming is strengthened by its publishing division, Pixmain, Danjuan Gaming’s platform, and Ohayoo, a casual game publishing platform owned by ByteDance, highlighting its commitment to controlling the gaming experience within its ecosystem.

QQ Games

QQ Games stands as a multifaceted entertainment portal by Tencent, offering a variety of social games alongside services like music and movies.

Integrating with Tencent’s messaging service adds a social layer to the gaming experience. This integration facilitates easy connection among players, enhancing the social aspect of gaming. Players can easily invite friends, join groups, or participate in community events, making the gaming experience more interactive and socially engaging.

QQ Games’ home page mainly features sports, simulation games, and fantasy-themed RPGs among the most played titles. A QQ account is also required to access major Chinese and Japanese MMORPGs, such as Moonlight Blade, Monster Hunter Online, Kritika, Lost Ark, and Saint Seiya Awakening: KOTZ.

Overall, except for games on QQ, most social network games are “time killers,” which include casual games, puzzles, runners, and sports. These games are often called “Mini Games” due to their simplicity. WeChat and Douyin adopted the concept of Mini Games, while TikTok is currently in the early stages of exploring this new market. Fantasy-themed RPGs also frequently appear among top games on social networks, such as QQ Games and WeChat MiniGames. None of the major players appear to be making an effort to appeal to the hardcore gaming crowd in the near future. Instead, they are choosing to focus on hyper-casual-style games.

Overview of the Top Casual Titles in Social Networks

This section will examine the monetization models of the top social network gaming titles. Notably, most of the mentioned games were released over the past five years but still rank high by MAU and revenue.

Match-3-type games stand out compared to other genres. They compete even with PUBG and Genshin Impact by mobile revenue while being significantly less complex in terms of gameplay and development. Sports/simulation games (especially card games and pool) and endless runners are also popular on social networks, but they lag behind in revenue. RPGs are leading on WeChat and QQ, while dating games are popular on VK. However, these genres are beyond our current focus.

If we define market leaders as developers of the most profitable games on social networks, then the top contenders would be King (Candy Crush Saga), Playrix (Gardenscapes, Homescapes), and Moon Active (Coin Master). Despite being older titles, they continue to dominate in MAU and revenue. Moreover, spin-offs based on these games are still being created.

Candy Crush Saga

Candy Crush Saga is a free-to-play tile-matching game developed by King and released in 2012. Players complete levels by swapping colored pieces of candy on a game board to make a match of three or more of the same color, eliminating those candies from the board and replacing them with new ones, which could potentially create further matches. Other King games like Bubble Witch Saga and Farm Heroes Sage have similar mechanics; however, they are lagging in terms of traction.

King’s monetization strategy involves freemium features where players can purchase in-game items like extra moves or lives. The game has generated considerable revenue, with a notable portion of players making in-app purchases. Notably, only 3% of users make in-app purchases (source).

Candy Crush Saga’s success is evident, with over 1 billion downloads and a high active user count, making it one of the most recognizable games in its genre. Candy Crush Saga is among the highest-grossing mobile games, with $592.75 million gross revenue in 2023 YTD (source), along with other major titles like PUBG and Genshin Impact. As of December 2023, it ranks 5th among all apps in the “casual” category in iOS and Google Play in the US (source) and 8th by revenue among all Google Play apps on data.ai with 69.96 million active users (source).

Coin Master

Coin Master is another match-3 type game, also called adventure, and a “social build-battler mobile game employing slot mechanics” (source). Coin Master was released in 2015 by Moon Active.

The players’ objective is to win coins to upgrade items to build up villages and progress through the levels. Similar to Candy Crush Saga, the game has a freemium model with in-app purchases offered in ten bundles of “spins,” “coins,” and other in-game assets and boosts.

The game also appears among the highest-grossing mobile games with $447.37 million gross revenue in 2023 YTD (source), ranks 2nd by revenue on data.ai as of December 2023, and has 23.33 million active users (source).

Homescapes

Homescapes is a popular match-3 puzzle game developed by Playrix and released in 2016. Players assist the game’s protagonist, Austin, in renovating and decorating his family’s mansion by completing various puzzle levels. The game combines traditional match-3 mechanics with a storyline and interior design elements, offering a unique and engaging experience. Homescapes has multiple spin-offs, including Gardenscapes, which follows a similar gameplay style but focuses on garden renovation and decoration.

The game features in-app purchases with in-game coins that can be earned or bought with fiat. As of March 8, 2023, Homescapes was downloaded more than 540 million times and has earned $2.5 billion in revenue (source). According to data.ai, the game currently has 9.31 million active players (source).

8 Ball Pool

8 Ball Pool, developed by Miniclip, is a widely acclaimed online multiplayer pool game released in 2010. It is available on multiple platforms, including iOS, Android, and web browsers. This game allows players to compete in 8-ball pool matches against others globally, offering a realistic billiards experience with a competitive ranking system.

Like other games in this list, 8 Ball Pool follows a freemium model with in-app purchases, including ten bundles of coins for buying mystery boxes, cue customization, and a VIP membership that provides additional perks.

8 Ball Pool has over 1 billion downloads on Google Play and 28.67 million active players (source).

Sheep a Sheep

Sheep a Sheep is a casual mobile puzzle game developed by Brilliant Games, released in 2022 for iOS and Android platforms, as well as WeChat and Douyin. The game, known for its simplistic yet addictive gameplay, involves players stacking sheep to build a tower, challenging their strategy and timing skills.

The game’s monetization sources are ads and in-game purchases, including the paid option to permanently remove ads, remove ads for seven days, a permanent VIP subscription, and the ”Battle Ticket.”

There is no public data on MAU or revenue; however, the game went viral in 2021 and brought much attention to WeChat mini-games, leading to 30%+ organic growth in 2021 (source).

Helix Jump

Helix Jump is an addictive, single-tap arcade game developed by Voodoo and released in 2018 for iOS and Android platforms. The game challenges players to navigate a bouncing ball through a spiraling tower maze, requiring precision and timing to avoid obstacles and reach the bottom.

Like Sheep a Sheep, Helix Jump is monetized through ads and allows players to purchase a “no ads” subscription. Additionally, players can buy revives.

According to the developer’s website, Helix Jump currently has over 100 million downloads on Google Play and 800 million downloads total. The game has over 2.33 million active users as of December 2023 (source).

Pirate Treasures: Jewel & Gems

Pirate Treasures: Jewel & Gems is a match-3 type puzzle game developed by TAPCLAP, initially made available for VK in 2013 and Android devices in March 2015. The game was later released on iOS platforms on November 30, 2018. Set in a vibrant pirate-themed world, it challenges players to match jewels and gems in classic puzzle game fashion, offering hours of engaging gameplay across various devices.

The game allows users to purchase ten bundles of coins, lives, weapons, and boosts. Pirate Treasures is one of the most successful games on VK, with over 23 million players representing more than 4% of VK’s total user base. Additionally, Pirate Treasures has more than 50 million downloads on Google Play.

Overall, most major casual titles on social networks adopt a freemium model, offering in-game purchases such as coins, asset bundles, and items. These purchases aid players in their gameplay and allow for personalization of their gaming experience. The next section will explore how Web3 elements can be incorporated into these monetization models.

Web3 Entry Points and Implications for Monetization

There is a lot of overlap between casual Web3 and Web2 games in terms of monetization due to similarities in in-game mechanics, such as stats, leveling, health/mana systems, as well as the ability to personalize the gaming experience by changing the visuals and stats of characters or items. See, for example, Dragon Strike and Meow Match as Web3 match-3 type games that incorporate monetization elements similar to those found in Candy Crush Saga or Gardenscapes.

Common monetization models used in Web3 games are in-game purchases of items, upgrades, repairs, and boosts; NFTs representing characters or items, as well as tickets to game events and tournaments; in-game NFT marketplaces; in-game DEXs; and staking. Unlike Web2 games, some Web3 games do not allow onboarding without purchasing an in-game asset, such as an NFT character, tool, pet, or other items. However, the main difference compared to traditional gaming is the ability of Web3 games to carry the value of in-game assets outside of the game, allowing for revenue generation from secondary markets, including DEXs, NFT marketplaces, or staking fees.

As of December 2023, several new GameFi projects appear in the top 10 by token market cap on CryptoRank:

• Axie Infinity is a digital pet universe developed by Sky Mavis, where players collect, breed, raise, battle, and trade token-based creatures known as Axies. Its monetization model revolves around the use of in-game ERC-20 tokens, with players making transactions using AXS and SLP, earning through gameplay, and participating in the game’s economy, including buying and selling Axies and in-game assets on the game’s marketplace.
• The Sandbox is a virtual world and a sandbox-type gaming ecosystem developed by Pixowl, where players can create, own, and monetize their gaming experiences. Its monetization model revolves around using SAND, its native cryptocurrency. It allows players to buy digital land and assets, engage in virtual real estate transactions, and participate in a decentralized economy, epitomizing the “play-to-earn” model, similar to Axie Infinity.
• Decentraland is a decentralized virtual reality platform powered by Ethereum, developed by Ari Meilich and Esteban Ordano. As a virtual world game, users can create, experience, and monetize content and applications. The platform’s monetization model is based on the use of its currency, MANA, which players use to buy and sell virtual land and assets within the game, making it part of the “play-to-earn” genre.
• Gala Games (game developers). Their portfolio includes a match-3 game, Meow Match. The monetization is comprised of NFTs representing “Meow Pets” and in-app purchases (”vault pack bundles”). Another match-3 project with RPG elements called Dragon Strike offers a VIP subscription and “Marketplace Bundles.” In-app purchases for both games are only available with fiat.
• Illuvium, an RPG sci-fi game on Ethereum, is renowned as “the world’s first IBG (Interoperable Blockchain Game).” Illuvium features open-world exploration, an NFT creature collector, and an auto battler game. Illuvium has its own token ILV. Illuvium positions itself as a “fusion of DeFi and Gaming.” Users can stake their ILV and purchase game objects as NFTs that can be utilized across various games in the ecosystem. Illuvium has its own DEX called IlluviDex.

dAppRadar features these games among those with the highest UAW:

• Farmers World — a farming simulator with in-game currencies GOLD, WOOD, and FOOD used to create tools, repair equipment, and maximise stats. NFTs represent tools and provisions and can be bought with in-game currencies.
• Untitled Platformer — a platformer with its own token UNT used for increased rewards, to mint NFTs (Bonus Characters), or to purchase in-game items.
• Nine Chronicles — an RPG with a fantasy setting with its ecosystem token NCG, which can be staked, traded, used for crafting items, and accelerated growth.

Overall, the Web3 monetization mechanics run down to:

• Purchase of items (characters, tools, weapons, etc.) with ecosystem token, as well as upgrades, improvements, and repairs of these items
• NFTs as in-game assets (characters, tools, weapons, etc.)
• NFTs as tickets (for events and tournaments)
• Fees from in-game NFT marketplaces
• In-game boosts with ecosystem tokens (level-ups, speeding up cooldown)
• Deposits in gambling games
• Fees from in-game DEX, where the token can be traded for common currencies
• Fees from staking of the ecosystem token
• Liquidity mining programs used to boost activity.

We can draw parallels between the leading Web2 titles and their closest Web3 analogs and offer some suggestions on how to diversify their monetization models with Web3 elements:

Wrapping Up: What Can We Learn from Web2?

Following the examples of market leaders, it appears feasible for TON to prioritize match-3 type games initially. This choice is driven by their competitiveness, potential for revenue generation, and suitability for a “mini-game” format. Additionally, we can explore other genres such as platformers, endless runners, card games, and simulators.

Games like Coin Master, Candy Crush, and Gardenscapes appear among the highest-grossing mobile games worldwide, alongside giants like PUBG or Genshin Impact. All three are casual-style match-3 games suitable for a “mini-game” format on Telegram and other social networks. We could replicate their success while dipping into similarly addictive genres, such as platformers, endless runners, card games, and sports games.

The monetization models of games like Coin Master, Candy Crush, and Gardenscapes could be easily enhanced with Web3 mechanics. For example, in-app purchases can be made with Toncoin or other jettons, and NFTs can represent characters or items, as well as subscriptions for special game modes (similar to “The Farm Season” in Homescapes) or access to tournaments if the game employs PvP elements. If an in-game token is launched, an in-game DEX can provide an additional source of revenue through trading fees. Similarly, fees can be earned through staking.

It is evident that Web3 casual gaming remains a relatively untapped market, with only a handful of casual titles making it to the top ranks. This presents an opportunity for Web3 game developers to learn from the success stories of Web2 gaming market leaders, charting a course that blends innovation with already proven strategies. The integration of Web3 elements combined with the social aspect of the messaging apps provides an additional dimension for engagement and revenue generation, that could reach far beyond what traditional casual gaming has already achieved.

Ready to start building crypto-friendly mini-games and unlock access to 800 million Telegram users? DM us on Twitter or visit our official website: https://top.co. Dive deeper into the world of Mini Apps at ton.org. Join the conversation and stay updated with the latest developments by following the official Telegram Mini Apps Twitter.

Telegram Bots Are Gaining Traction

According to Binance Research’s Telegram Bots: Exploring the Landscape report, cumulative lifetime volume of trades facilitated on Telegram bots exceeded $190M in early August, 2023. In July 2023, daily active users of Telegram bots also reached a record high of 6,000.

Both CoinMarketCap and CoinGecko now feature Telegram Bot Tokens sections. Unibot, a bot that facilitates fast swaps and snipes on Uniswap in Telegram, maintained its position as a leading token throughout Q3 2023, achieving an ATH market capitalization of $200.27 million. Meanwhile, the entire segment is now valued at $288.48 million, according to CoinGecko. The hype behind Telegram Bot Tokens has cooled down, causing the market capitalization to decrease from its ATH. At the same time, the apps listed in the Telegram Bots sections of CoinMarketCap and CoinGecko represent only a fraction of Telegram’s Web3 ecosystem, which is just beginning to reveal itself.

TON has entered into an official partnership with Telegram to collaboratively develop the Telegram Web3 Ecosystem. The key highlight of this partnership is the unveiling of the Wallet, that took place during the Token2049 event in Singapore. This marks a significant milestone for both TON and Telegram, establishing a foundation for the Telegram Web3 Ecosystem.

Telegram-based trading bots are just one example of the many utilities the messenger interface can offer beyond communication. This also demonstrates how Telegram is now becoming an integral part of the entire crypto and blockchain ecosystem.

Telegram’s integration of Web3 functionalities through Telegram Apps (tApps) represents a significant leap forward in driving blockchain adoption. The inclusion of Telegram Bot tokens on CoinGecko is just the beginning, as we recognize the immense potential of The Open Network (TON) and the role of tApps as a completely new infrastructure layer.

Bobby Ong, COO and Co-founder of CoinGecko

A variety of other decentralized products are entering the market as we are releasing this post. In this report, we are going to introduce our readers to Telegram’s Web3 ecosystem embodied by Telegram Mini Apps.

Current State of Telegram Apps

Telegram is not only used for messaging but also for a variety of other purposes, ranging from automated responses and news updates to weather forecasts, portfolio tracking, translation, gaming, file sharing, and even payments. As a result, Telegram has evolved into a crucial communication channel for projects, businesses, and brands, and its chatbot capabilities are extensively used to onboard new users, manage marketing campaigns, and streamline sales processes.

Mini Apps are the latest addition to the Telegram ecosystem, which was previously represented by bots. Mini Apps are a logical evolution of the bot platform. They complement it by providing a web interface that resembles a regular website, and are more advanced and versatile compared to standard chatbots overall. The Telegram Mini Apps ecosystem is designed to assist developers in increasing traffic, exploring monetization opportunities, and expediting development using its centralized toolkit. In the next section, we will take a closer look at what Telegram Mini Apps are, how they work, and what they can be used for.

Telegram Mini Apps — The Newest Addition to the Telegram Bot Platform

Telegram Mini Apps enhance all the features of common bots and function as independent websites within a bot. They provide highly flexible platforms that support a wide range of interfaces built with JavaScript. The apps are powered by Wallet, a Telegram-native self-custody crypto wallet, and Wallet Pay, a primary payment nework for Mini Apps. Additionally, Mini Apps support common payment methods via 20 payment providers, including Google Pay and Apple Pay.

Why are Mini Apps such a big deal? First and foremost, Telegram’s 800 million users, coupled with its ease of access and seamless onboarding process, make it the ideal platform for businesses seeking to establish new sales and marketing channels, increase engagement, and explore fresh monetization opportunities. The versatility of Mini Apps enables them to be used for virtually any purpose that regular websites could be used for.

The app can be launched in different ways, including through a keyboard button, an inline button, a bot menu button, an inline mode, or a direct link.

Here are some examples of the different ways you can launch a Telegram Mini App:

The application will open with the user’s theme settings and basic information. Telegram Mini Apps resemble a website in the interface of a messenger bot. Once the mini app is launched, users will see a window in Telegram’s interface offering them various actions, such as connecting their wallet, placing an order, executing payment, etc. In addition to the webpage content, Telegram Mini Apps support:

• Pop-ups;
• The “back” button, located in the header of the Mini App, which is used to navigate back through the navigation history;
• The main app button, displayed at the bottom of the Mini App in the Telegram interface;
• Haptic feedback.

Refer to core.telegram.org to learn more about the possibilities of Telegram Mini Apps and check out @DurgerKingBot, a test bot provided by the Telegram team, to see a Telegram Mini App in action.

Telegram Mini Apps are able to provide a visually consistent and user-friendly experience, resembling the design of Telegram itself. While Telegram Mini Apps can be customized to fit particular branding, Telegram offer guidelines to keep the design consistent with the platform. Specifically, the design should prioritize mobile platforms, while the app should “deliver a seamless experience by monitoring the dynamic theme-based colors provided by the API and using them accordingly.”

Mini Apps offer a powerful arsenal of tools for community growth and engagement. The seamless integration within the Telegram interface makes it easier than ever to build and manage communities. The versatility of Mini Apps not only enhances user onboarding but also facilitates ongoing engagement, helping projects, companies, brands, and individuals nurture their community and achieve their growth objectives. This includes running incentive campaigns, competitions, or simply fostering meaningful interactions, all of which can be a part of creating vibrant and engaged communities.

Projects, companies, brands, and individuals can harness the dual advantages of low user acquisition costs and an interconnected Mini App ecosystem. The ease of onboarding users already familiar with Telegram significantly reduces acquisition expenses, making it a cost-effective growth strategy. Moreover, Mini Apps foster synergy among themselves, as individuals who engage with one Mini App are more likely to explore others. This organic interconnectedness enhances the potential for viral user acquisition, creating a network effect where each Mini App contributes to the success of the broader ecosystem. With these elements in play, Telegram Mini Apps offer an unparalleled opportunity to tap into a vast user pool and drive exponential growth for projects, products and communities.

Some TON Ecosystem participants are already implementing Telegram Mini Apps to diversify their user onboarding channels and improve engagement:

• Tonstarter, the first launchpad on TON, onboards users with its Tonstarter Assistant. The bot features a mobile version of the Tonstarter website that enables users to connect their wallets and engage in fundraising for blockchain-based projects, as well as participate in events with reward pools.
• Getgems, a TON-based NFT marketplace, has a Getgems Bot, that enables users to store, view, and interact with their NFTs.
• The Community app is a toolset designed to help projects, brands, companies, and influencers onboard and manage their communities. It also facilitates growth and improves engagement by using tools such as incentive campaigns or competitions. The app is currently being used by TON Community to assist in discovering of TON-based Web3 projects.
• Fanton, a TON-based Fantasy Football NFT game, onboards players in its own Telegram Mini App. Earlier this month, Fanton reached 55K MAU, establishing itself as one of the leading GameFi projects on TON.
• Evaa Protocol, the first lending protocol on TON, enables users to lend and borrow tokens directly in Telegram with its Evaa Protocol Telegram Mini App.
• TON Rocket is a wallet for TON and jettons that is fully integrated with Telegram. It features an exchange, a P2P market, and a payment system called Rocket Pay.

The Web3 Landscape of Telegram

In late 2022, Pavel Durov announced the upcoming launch of a set of decentralized tools, including non-custodial wallets and decentralized exchanges, on Telegram. In 2023, Telegram achieved an important milestone by starting its first decentralized payment solution.

Earlier this year, we introduced Wallet, a self-custodial wallet on Telegram, and Wallet Pay, a payment system for Telegram users and apps. The unveiling of Wallet during Token2049 in Singapore now serves as a central piece in the public announcement of the TON and Telegram partnership.

Wallet is a TON-based platform that turned Telegram Messenger into a Web3 wallet and lets users easily manage their digital finances. Wallet enables apps to easily onboard new users using only Telegram Messenger. Wallet now has over 2.5 million users. Learn more at wallet.tg/ton.

Wallet Pay is a great payment system for Telegram Apps to support payments and operate with funds: crypto and fiat. Wallet Pay allows users to track their orders statistics and easily withdraw funds to Wallet.

Both tools are key components of Telegram’s Web3 landscape. Mini Apps can now leverage Telegram’s payment capabilities for seamless user onboarding, monetization, and gain access to Wallet’s community of over 2.5M users. This means that Mini Apps’ users don’t have to rely on third-party wallets to interact with Mini Apps, as all payments are integrated natively.

The Open Network Blockchain is the foundation of Telegram’s Web3 ecosystem, offering high scalability, low fees, and fast transactions. We anticipate that more TON-based projects will enter the market in the near future and take advantage of Telegram’s capabilities.

Telegram Apps Center — An Interaction Tool for Telegram’s Apps

You can already explore a selection of Mini Apps in the Telegram Apps Center. Designed to support developers and enhance user interactions, the Telegram Apps Center offers a range of tools, utilities, and entertainment options. From communication solutions to practical utilities, users will find a curated selection of apps that integrate smoothly with Telegram’s platform, all focused on simplicity, security, and convenience.

The purpose of the Telegram Apps Center is to facilitate the discovery of Mini Apps and provide developers with assistance in realizing their ideas. This is achieved through a streamlined submission process facilitated by a dedicated Apps Moderation Bot. By integrating with Telegram’s platform, developers can tap into Telegram’s expansive user base. The center’s emphasis on user privacy and security establishes a dependable environment for developers to showcase their innovations and deliver meaningful experiences to users.

What to Do Now and What to Expect in the Future

Are you building on TON? Do you have an interest in shaping the future of Telegram with decentralized tools and projects? Apply to the Telegram Web3 Grants program announced by TON Foundation earlier this month. The program aims to encourage development activity within the Telegram Web3 ecosystem by leveraging TON’s speed and scalability. There are 5 Grant Categories:

• Type A — Initial Deployment (up to $10,000 in TON). This category is meant for proof of concept Telegram Mini Apps or Telegram Mini Apps that are in the initial deployment stage.
• Type B — Live TON-based Projects with Existing User Base (up to $10,000 in TON). The Type B category includes TON-based live projects that already have a user base and plan to integrate with Telegram.
• Type C — Live Non-TON-based Projects with Community ($20,000 — $50,000 in TON). This category is for projects on other blockchains that are interested in scaling or moving to TON. The exact grant amount will be determined based on the project’s traction, including user base, TVL, and activity metrics.
• Type D — Projects Seeking Venture Funding (VC funding). While the grant program does not offer venture funding, projects seeking VC support can still apply to gain exposure to various VC funds, as well as guidance through the evaluation from TONcoin.fund.

Read more about program categories here.

In the meantime, you may find the following resources useful:

• Get started with Telegram Mini Apps at ton.org
• Explore the Telegram Apps Center
• Check out Telegram’s official guide to Telegram Apps
• Join the Trending Apps channel to stay updated about interesting launches
• Join the Telegram Mini Apps Developers Community for support and event updates related to Mini Apps
• Check out the open repository with useful tools and documentation about Telegram Mini Apps
• Keep an eye out for Mini App challenges like the recent TON TMA Challenge in the TON Contest Bot.
• Already built your Telegram Mini App? Submit it to Telegram Apps Moderation bot.

The launch of the Telegram Apps Center and a native self-custodial wallet will mark a significant milestone for both Telegram and TON. Mini Apps introduce a fresh paradigm for developing robust web-based applications that seamlessly merge the broad accessibility and reach of the web with the enriched user experience and functionality of native apps. Telegram’s embrace of Mini Apps sets the stage for a future where web applications can seamlessly integrate with messaging platforms, unlocking a new realm of possibilities for user engagement, seamless interaction, and immersive experiences.

Ready to build the decentralized future and move towards mass adoption of Web3 with the limitless potential of Telegram Mini Apps? Dive deeper into the world of Mini Apps at ton.org. Join the conversation and stay updated with the latest developments by following the official Telegram Mini Apps Twitter.

This public article is the result of an internal report conducted by The Open Platform.

Accelerating Blockchain Startups to Escape Velocity. https://top.co/

Key Takeaways:

• The most commercially successful cases of bringing EVM capabilities to non-EVM compatible blockchains are Aurora (a smart contact on NEAR that executes an EVM code), Moonbeam (a parachain on Polkadot) and Kava (a sidechain on Cosmos). Aurora migrated several Ethereum-based projects to NEAR, such as 1inch and Beefy. Meanwhile, Moonbeam brought SushiSwap, Curve, and Lido to Polkadot, and Kava integrated Curve as well. Lido on Solana, which made up 19.2% of Solana’s TVL, is also a notable case, however, the transfer of Lido to Solana did not involve any solutions for EVM compatibility. Neon EVM (a project that implemented EVM on Solana) was highly anticipated because it had the potential to facilitate the migration of more Ethereum-based projects to Solana, but it has yet to gain significant traction.
• Developing a workchain built on the EVM to support Solidity smart contracts appears to be the most feasible approach for TON, enabling Ethereum-based dApps to be deployed on TON, while utilizing TON’s unique “blockchain of blockchains” structure. A comparable initiative is underway in the Venom Blockchain, where the Everscale auxiliary network is exploring EVM integration as one of its potential use cases.
• Ultimately, the choice of solution depends to a large extent on TON’s architectural properties rather than drawing on the experience of other non-EVM compatible blockchains. All successful cases of bringing EVM capabilities to non-EVM compatible blockchains vary significantly, as they are tailored to the unique requirements of each blockchain. It is advisable to prioritize the cost-efficiency of transferring Ethereum-based projects to TON rather than attempting to replicate solutions from other blockchains. According to TON’s documentation, creating a specialized workchain may be the most viable option.
• Implementation strategies may include adopting an independent blockchain as an internal EVM compatible workchain (possibly with acquisition) or partnering with a provider of L2 solutions to build an alternative solution, such as a rollup. These are the strategies implemented by other blockchains, such as Venom (acquisition of Everscale) or Cardano and Algorand (partnership with Milkomeda).

Creating a non-EVM-compatible blockchain can help developers explore alternative consensus mechanisms and governance structures, offering distinct advantages over the EVM-based Ethereum network. In certain cases, it provides greater flexibility in designing consensus algorithms, transaction processing speeds, scalability solutions, and smart contract functionalities that can be tailored to specific use cases. Non-EVM blockchains also foster healthy competition within the blockchain ecosystem, driving advancements and diversity in decentralized technologies.

However, building and scaling non-EVM blockchains is challenging. Compatibility issues with existing Ethereum-based DApps and smart contracts arise. Establishing a developer ecosystem and achieving network scalability are common challenges. Overcoming these challenges requires a robust technical roadmap, developer community support, and a strong value proposition. This guide explores approaches to tackling these challenges.

Use cases of non-EVM compatible blockchains

We selected seven originally non-EVM compatible blockchains: NEAR, Solana, Algorand, Cardano, Polkadot, Cosmos, and Venom. While some have already established an efficient, interoperable environment connected to Ethereum (NEAR, Polkadot, Cosmos), others are still on their way to connect their ecosystems with Ethereum-based DApps and the Ethereum development community (Algorand, Solana, Cardano, Venom).

NEAR

NEAR Protocol has its own virtual machine, called the NEAR Virtual Machine (NEAR VM), which is specifically designed for the NEAR blockchain. It is optimized for scalability and high throughput. Smart contracts are developed using the Rust programming language. NEAR interacts with the Ethereum-based environment primarily through Aurora, an independent Ethereum-compatible blockchain that runs directly on NEAR. Users with ethereum wallets can also gain access to NEAR via the NETH smart contract.

Aurora

Aurora is NEAR’s version of an EVM that runs a node within Ethereum. It represents a layer-2 blockchain on top of NEAR and an EVM implementation that runs a smart contract. This smart contract is set apart from Ethereum and is executed directly on NEAR.

Aurora is a significant addition to the NEAR Protocol blockchain as it provides full Ethereum compatibility. This means that developers can easily transfer their Ethereum smart contracts to NEAR, expanding the range of DApps and tools available on the platform. By leveraging the extensive Ethereum ecosystem, Aurora attracts Ethereum developers and promotes cross-chain interoperability.

NETH

NETH is a smart contract that allows Ethereum wallet users to sign transactions on NEAR without switching to a NEAR-based wallet. It creates a paired NEAR account where the signature is transferred within the NEAR ecosystem. NETH is the first solution that facilitates the direct onboarding of Ethereum users onto non-EVM compatible blockchains.

NETH has successfully bridged the gap between NEAR and the vast user base of MetaMask and other Ethereum wallets, comprising over 30M monthly active users (MAU). As a result, these users can now directly sign transactions in NEAR dApps using their Ethereum wallets.

Solana

Solana was developed as a unique blockchain that prioritizes fast processing, low delays, and scalability. To achieve these goals, the Solana team used a custom-designed blockchain instead of the Ethereum Virtual Machine (EVM). They also implemented a special consensus mechanism called proof-of-history (PoH) to enable fast transaction confirmation and high network throughput.

Solana uses the Solana Virtual Machine (SVM) for executing smart contracts. SVM is designed to maximize performance and supports programming languages like Rust, C, and C++. Solana’s architecture and consensus mechanism enable high-speed transaction processing and scalability.

The Wormhole Bridge was launched in October 2020 to allow users to bridge assets between Ethereum and Solana in both directions. Wormhole acts as a gateway, providing liquidity and interoperability for users to bridge tokens across multiple ecosystems, expanding the possibilities for decentralized finance and cross-chain applications.

Solana recognized the importance of EVM compatibility and the existing ecosystem built around Ethereum. Neon EVM, a highly-anticipated smart contract for Ethereum-like transactions on Solana, is meant to help the Solana community leverage the familiarity and functionality of the EVM ecosystem while benefiting from Solana’s scalability and performance advantages.

Neon EVM

Built on Solana, Neon EVM is an implementation of the Ethereum Virtual Machine (EVM) that has been adapted to run on the Solana blockchain platform.

Neon EVM enables developers to deploy and execute Ethereum-compatible smart contracts on the Solana network, leveraging the existing Ethereum tooling and ecosystem. It aims to provide developers with a familiar environment and a seamless transition from Ethereum to Solana.

In contrast to Aurora, Neon EVM operates an emulation of Ethereum smart contracts that adhere to the rules of both the Solana and Ethereum networks. This emulation is achieved by utilizing Vyper/Solidity compilers, which facilitate transaction signing on Solana while complying with Ethereum’s established regulations.

The Neon EVM team recently introduced a closed beta version of Neon EVMβ on Solana’s mainnet. This beta release provided users with the opportunity to deploy and evaluate Neon EVMβ, ensuring smooth integration ahead of the official launch on the Solana Mainnet. NEON, a utility and governance token, will support the Neon EVM ecosystem. The project remains in active development. Upcoming plans include the establishment of Neon DAO, integration with platforms such as The Graph, Chainlink, and Pyth, the launch of grant programs, and more.

Lido on Solana

Lido, a liquid staking protocol and one of the most recognized Ethereum-based projects, was deployed to Solana without the involvement of any EVM infrastructure. The deployment was performed by Chorus One, a staking integrations provider.

The Chorus One team had to develop a Solana-specific version of the liquid staking protocol. This involved creating new smart contracts and adapting the underlying infrastructure to work with Solana’s programming model and consensus mechanism. Later, ownership of Lido on Solana was transferred to P2P Validator, a notable participant within the Solana ecosystem, who actively supported projects like Wormhole Bridge, Pyth, and Neon EVM.

The end project utilizes both Solana’s and Lido’s infrastructure:

A SOL token holder connects their wallet to the Lido interface and deposits their tokens into the Lido program. They immediately receive stSOL tokens that represent a share of the total pool. Every user’s tokens are first held in a pool controlled by the Lido program …

…The Lido program collects the deposited SOL and releases the newly minted stSOL to the user. Beneath the layer, the Lido Program will distribute this SOL uniformly across those validators that are participating. When these delegations accrue rewards on the allotted stake, the total SOL under management increases and this increases the value of stSOL tokens. The Lido DAO governs the Lido Program — and also controls the list of validators that are part of this program.

Chorus One — Announcing Lido for Solana: A Liquid Staking Protocol: Medium

Algorand

Algorand stands out for its unique consensus mechanism, pure proof-of-stake (PPoS), which enables fast and secure transaction confirmation without needing energy-intensive mining. It offers massive scalability, capable of processing thousands of transactions per second with minimal latency, making it suitable for large-scale applications.

Like the NEAR and Solana communities, the Algorand Foundation brought EVM compatibility to the mainnet to enhance scaling and interoperability. In October 2022, the foundation granted funding to Milkomeda, a cross-chain solutions provider, to develop EVM capabilities in Algorand.

Milkomeda A1

Milkomeda is an independent blockchain-agnostic protocol that enhances blockchain interoperability by bringing EVM capabilities to non-EVM blockchains. It achieves this by implementing L2 scaling solutions, such as rollups, which operate on top of existing layer-1 blockchains and connecting them through a permissionless bridge.

Milkomeda enables non-EVM ecosystems to leverage key features from EVM-based ecosystems, including rollups, Solidity support, and access to the full suite of EVM tools, simplifying the process of building, deploying, debugging, and auditing, similar to Ethereum. This means that developers can easily port their projects from Ethereum, resulting in a larger selection of DApps being available on supported L1 blockchains.

The code deployed on multiple chains has the same security properties, eliminating the need for individual audits per chain. In the future, zero-knowledge technology innovations can be implemented as L3+ solutions on top of Milkomeda. Milkomeda also empowers startups to build on chains like Cardano, Algorand, and Solana while tapping into the resources of the largest community for smart contracts (Solidity).

The Milkomeda A1 is a rollup made for Algorand. It utilizes mALGO as a gas and fee token, meaning that the transactions are executed on Algorand and then bundled and sent to Ethereum, retaining its security properties. To access the A1 Rollup Mainnet, users need an Algorand native wallet containing $ALGO, as well as an EVM-compatible wallet like MetaMask (source).

With Milkomeda’s permissionless bridge, users can bridge their Algorand-based assets into Milkomeda A1 to interact with EVM-based DApps. The TVL contribution to Algorand has been negligible so far.

Cardano

Cardano is another non-EVM compatible blockchain with a strong focus on governance, aiming to enable community-driven decision-making and secure the long-term sustainability of the platform. The altchain is known for its rigorous scientific approach to blockchain development, combining peer-reviewed research with a layered architecture to achieve scalability, security, and sustainability. It utilizes a unique proof-of-stake consensus algorithm called Ouroboros, which ensures energy efficiency and decentralization.

KEVM, a project of Cardano’s Goguen era, represents an early effort towards EVM compatibility by offering a smart contract virtual machine compatible with the EVM. KEVM uses “formal semantics for elements such as the configuration and transition rules of EVM, resulting in a more secure virtual machine for smart contracts,” per the project’s roadmap. IOHK, the engineering company behind the project, paused its development to focus on other priorities.

Milkomeda C1

Milkomeda C1 is a sidechain that was officially launched in April 2022 and now acts as the primary bridge between the Cardano and Ethereum ecosystems. Unlike Milkomeda A1, Milkomeda C1 operates as a sidechain, serving as an independent blockchain network capable of processing transactions and executing smart contracts separate from the main Ethereum chain. This arrangement provides greater flexibility as Cardano can utilize its own consensus mechanism and block validation environment.

Analogously to Milkomeda A1, C1 uses mADA as its main asset for gas and fees. This simplifies the onboarding experience for users who want to interact with Ethereum DApps. Initially, Milkomeda C1 contributed a significant share of TVL compared to Cardano. However, its share in total TVL has since decreased to nearly zero.

Polkadot

Polkadot implements a unique method of achieving blockchain interoperability through its parachain auction system. Here, projects can bid for a slot on the Polkadot network and deploy their own blockchain as a parachain. This dynamic framework offers flexibility, allowing any project to participate and attract validators. However, due to the limited number of available slots, competition among projects vying for a slot may arise.

Parachains in Polkadot have their own consensus mechanisms and validators and can have their own rules and governance models. They benefit from the security and interoperability provided by the Polkadot network, allowing for efficient communication and asset transfers between parachains and the wider ecosystem.

Parachains are autonomous blockchains that are connected to a designated relay chain. They depend on the relay chain’s consensus mechanism to ensure security and interoperability. In contrast, sidechains are separate blockchains that can run parallel to the mainchain and may employ their own consensus mechanism. Sidechains can function independently or with limited interaction with the mainchain. Moonbeam, which was launched in January 2022, is Polkadot’s first parachain.

Moonbeam

Moonbeam uses Substrate and offers full compatibility with the EVM. This enables Ethereum developers to deploy and execute their smart contracts on Polkadot. The bridge between Ethereum and Polkadot offers the benefits of Polkadot’s scalability, interoperability, and shared security to Ethereum developers and their DApps.

Moonbeam supports existing Ethereum tooling, DApps, and smart contracts seamlessly on Polkadot. It makes it easier for Ethereum developers to transition their projects to Polkadot while leveraging Polkadot’s scalability, interoperability and shared security.

Polkadot takes a unique approach to EVM compatibility. In contrast to NEAR’s focus on bridging Ethereum and initiatives like Aurora and NETH and Solana’s integration with Neon EVM, Polkadot aims to offer Ethereum developers a seamless experience. It does this by replicating the EVM environment and enabling them to deploy and run their smart contracts on Polkadot directly.

Moonriver

Moonriver is a canary network to Moonbeam. Designed to provide a stable and secure environment for testing and deploying DApps, it enables developers to leverage the interoperability and scalability features of Polkadot while maintaining compatibility with the Ethereum tooling and ecosystem.

Cosmos

Cosmos represents a newer class of blockchains, a layer-0 blockchain. It stands out for its focus on interoperability, enabling different blockchains to communicate and exchange assets through its Inter-Blockchain Communication (IBC) protocol. It offers a scalable and secure platform for developing sovereign blockchains, allowing them to maintain their own governance models and consensus algorithms while benefiting from the broader Cosmos ecosystem.

Similar to some of the layer-1 solutions discussed in this report, Cosmos utilizes a sidechain to enable EVM capabilities.

Kava

Kava is an L1 blockchain built on Cosmos SDK that acts as a sidechain for Cosmos. Just like the previously mentioned sidechains, it facilitates interoperability between Ethereum and Cosmos. The L1 also enhances scalability and contributes to the overall expansion of the Cosmos ecosystem.

Kava EVM is part of the Kava ecosystem. Kava EVM is a smart contract execution platform that is fully compatible with Ethereum. It allows Solidity developers to build DApps and benefit from Kava’s scalability and security.

Evmos

Evmos is an Inter-Blockchain Communication (IBC) protocol and a proof-of-stake network that incorporates EVM capabilities. It serves as a means of value transfer between Ethereum and Cosmos. With over 20 interoperable blockchains on the Cosmos network, Evmos addresses the crucial need for compatibility with Ethereum. It is constructed using the Cosmos SDK framework and leverages Tendermint Core’s Byzantine Fault Tolerance (BFT) consensus mechanism. This ensures the network’s resilience, even in the presence of failed or malicious nodes. EVMOS is used for governance and staking, as well as a gas and fee token in Evmos.

Dymension

Dymension, a network of modular blockchains, is developing an L2 rollup solution compatible with the EVM for the Cosmos ecosystem. This rollup aims to support developers in deploying Ethereum applications on Cosmos, addressing the challenges posed by code differences between the two platforms.

Dymension’s rollup is currently undergoing testing. The plan is for Dymension’s EVM-compatible rollups to function on different Cosmos chains and establish seamless communication with them, thereby eliminating the necessity for bridges. This development enables the creation of multiple EVM-compatible rollups that can efficiently interact with various Cosmos chains.

Venom Blockchain

The Venom Blockchain is part of the Venom Foundation ecosystem. Venom Foundation is the first entity licensed by the Abu Dhabi Global Market to provide support for a blockchain. Notably, it can handle 100K TPS and incorporates dynamic sharding. It has a multilayer structure with a master chain, work chains, and shard chains.

The workchains are designed to adhere to different security, compliance, and privacy standards in various industries. The use of workchains allows for catering to the needs of particular apps while complying with the regulatory environment.

Additionally, integrating an EVM is one of the possible use cases for the workchains. Easy integration of Ethereum DApps is further enabled by the programming language used by the Threaded Virtual Machine, a smart-contract code execution platform in the Venom master chain and base chain. The language is called Threaded Solidity.

Threaded Solidity is an asynchronous dialect of Solidity, which is adapted to the Threaded Virtual Machine (TVM). T-Sol is similar to Solidity and, therefore, can easily be used by Ethereum developers. According to Venom documentation, TVM was designed to be language-agnostic.

Everscale

Everscale, one of Venom’s investments, initially emerged as an independent blockchain known as “Free TON.” It was launched based on Telegram’s “Telegram Open Network” whitepaper and open-source code (TON). Later, Venom Foundation acquired Free TON to support its workchains environment. The primary objective of Everscale is to address existing flaws in Ethereum’s architecture, particularly in terms of scalability. It achieves scalability through a combination of data sharding, implemented through work chains, and execution sharding, achieved via threads.

It is confirmed by Sergey Shashev, a member of the Everscale DeFi Alliance, that Venom adopted Everscale in part for its EVM capabilities:

There is a world of EVM, there are many blockchains: Ethereum, BNB, Polygon, etc. The more development branches you have, the better for the technology, because you can launch different technological and economic experiments in different networks and what shoots, it can scale on other networks…

… The presence of different networks on the same architecture can accelerate the growth of this technology. We have 4 TVMs, ideally before the end of the year, everyone should build a relationship with everyone. That’s what I do.

Sergey Shashev, co-founder of @Broxus and Everscale DeFi Alliance: Everkit

Everscale plays a vital role within the Venom ecosystem that goes beyond creating workchains. It also establishes connections between zero-level blockchains and facilitates the harmonious collaboration of TVM networks.

As a unique Everscale feature, it will be possible to call smart contracts from an EVM compatible workchain to other Everscale workchains and vice versa, creating a homogeneous environment for smart contract execution and enabling real EVM integration into Everscale, as well as making it possible to create synchronous, asynchronous, and combined applications within one blockchain or to extend existing ones.

This will open up incredible prospects not available in any of the solutions currently existing on the market.

John Everscale, EVM Workchains in Everscale: Medium

Implications for TON

What does the economic performance of use cases look like?

The commercial success of EVM solutions for non-EVM compatible chains can be measured by the amount of TVL and new users they attract and the liquidity they bring from Ethereum. However, there are a few examples of commercially successful solutions:

1. Aurora smart contracts on NEAR have contributed an additional 29.7% of the TVL to the platform. NEAR is part of a highly developed ecosystem with several prominent DEXs and lending protocols. Notably, its unique approach to EVM compatibility sets it apart. It does not fall into the common subcategories of L2 solutions such as rollups or sidechains. The primary motivation behind NEAR’s creation was to attract Ethereum developers to the NEAR platform rather than solely deploying Ethereum-based projects on NEAR.
2. Moonbeam and Moonriver are parachains on Polkadot, contributing a substantial $44.93M to the TVL. They have successfully attracted prominent Ethereum-based projects such as SushiSwap, Curve, and Lido to the Polkadot ecosystem. Like Aurora, Moonbeam and Moonriver possess unique architectural characteristics that defy classification into a specific type of L2 solution. Parachains operate with their own distinct execution environments and rely on the properties of the Polkadot relay chain.
3. Kava is a sidechain on Cosmos that attracted $194.89M in TVL from several widely adopted Kava-based DeFi protocols, as well as the Curve DEX.
4. Lido on Solana has brought a significant TVL of $54.14M, making up a 17.2% contribution to Solana’s ecosystem. Notably, Lido was deployed on Solana directly, without requiring EVM-compatibility tools, as it runs natively on the Solana blockchain. Additionally, Lido had previously been deployed on Terra Classic — also not an EVM-compatible chain — before its eventual collapse.

Milkomeda C1, A1, Neon EVM, and Evmos didn’t demonstrate substantial traction. Meanwhile, Everscale and Dymension have not been officially released on a mainnet as of November 2023.

What about bringing EVM to TON?

There are several properties that may affect the choice of a particular solution for bringing EVM capabilities to TON:

• Asynchronous structure and Infinite Sharding. Asynchronous structure and Infinite Sharding are key pillars in TON’s market positioning. This distinctive architecture sets TON apart from Ethereum and limits the options that can be used to achieve EVM compatibility.
• “Blockchain of blockchains” structure. TON supports the creation of workchains (”blockchains with their own rules”). Creating a work chain is a complex and expensive process that requires approval from TON validators. TON workchains, theoretically, can be based on EVM and run Solidity contracts.

Theoretically, everyone in (the) community can create their own workchain. In fact, it’s pretty complicated task to build it, after that to pay (expensive) price of creating it and receive 2/3 of votes from validators to approve creation of your Workchain …

A good example is to make a workchain that works on the base of EVM to run Solidity smart contracts on it.”

TON documentation

• Onboarding TON users to Ethereum DApps is a higher priority than onboarding Ethereum users to TON. Streamlining the onboarding process by connecting Ethereum-based wallets may be beneficial in the future. However, the network’s immediate priority lies in attracting major Ethereum-based platforms such as Aave or Uniswap to increase TON’s TVL. Consequently, solutions like NETH on Near (Ethereum wallet smart contract) are currently less relevant.

For the TON team, the ultimate objective of the integration can be summarized as follows: deploying DeFi projects based on Ethereum and bridging Ethereum’s liquidity to TON while maintaining TON’s distinctive architectural characteristics.

Which approach to EVM would suit TON?

The mentioned examples of other non-EVM blockchains can be summarized into five categories.

EVM sidechains and workchains appear to be the most appropriate options for TON. This is due to their ability to utilize TON’s unique scaling and transaction processing capabilities while being able to onboard TON users to EVM-based projects. The concept of an EVM-compatible workchain is outlined in TON docs and seems to be the most obvious solution.

Alternatively, adopting a rollup could help TON avoid excessive architectural complexity. Notably, transactions could be rolled up directly to the network while utilizing its security properties:

I believe the path forward to bring Ethereum DApps over to TON is by adopting a rollup. A zkEVM rollup utilizes the existing TON infrastructure (no need for an extra workchain that the network will have to verify and validate), and at the same time, inherit the same security of TON. In addition to that, A zkEVM Rollup on TON could act as a bridge between the TON ecosystem and Ethereum’s ecosystem where tokens from both chains can flow around. This increases liquidity available in the TON ecosystem.

Ahmad Mazen Bitar, Ethereum Core Developer

Regardless of the specific solution chosen, deploying Ethereum-based protocols can potentially bring in an increased TVL to TON, as observed in peer blockchains that are not EVM-compatible.

Implementation strategy

Here are some options for implementing EVM capabilities on non-EVM compatible blockchains (other than building an internal solution without involving third parties):

Acquiring an existing blockchain is a viable option for TON, but it necessitates a carefully tailored setup. The acquisition of Everscale by Venom, for instance, was a reasonable decision owing to Everscale’s commercial challenges and Venom’s superior scaling capabilities and reputation. Another approach is to develop an L2 blockchain with the assistance of an L2 solutions provider.

What can be learned from other non-EVM blockchains?

Identifying a consistent pattern between the type of L2 solution adopted by a blockchain and the commercial success achieved through EVM compatibility is challenging. This is due to the highly distinct architectures of each case, customized to align with the specific properties of their respective blockchains. Moreover, the choice of an approach to EVM compatibility may also be influenced by a blockchain’s market positioning. For example, a sidechain may be preferred compared to a rollup in order to preserve the blockchain’s unique consensus mechanisms, governance models, and economic parameters.

All successful cases of bringing EVM capabilities to non-EVM compatible blockchains vary significantly. This is because they are tailored to the unique requirements of each blockchain. For TON, it is advisable to prioritize the cost-efficiency of transferring Ethereum-based projects to the network rather than attempting to replicate solutions from other blockchains.

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