Crypto has spent the better part of the last decade trying to work out how to onboard the next hundred million users. Better wallets, cheaper blockspace, account abstraction, consumer apps and increasingly elaborate incentive programmes have all attacked different parts of the same problem. Yet most crypto products still begin by asking somebody to become a crypto user before they can become a user of the product.
TON approaches the problem from almost the opposite direction.
Rather than building a network and subsequently searching for distribution, The Open Network sits alongside one of the largest existing distribution channels on the internet. Telegram has roughly 950 million monthly active users, an enormous portion of whom already use the application for communication, communities and, particularly within crypto, discovery. The interesting question is what happens when financial applications can be inserted directly into that existing behaviour.
Over the past several months, we have started to get an answer.
Notcoin attracted tens of millions of users through a remarkably simple Telegram Mini App. Hamster Kombat claims more than 300 million players. Telegram has introduced advertising revenue sharing paid in TON, USDT has launched natively on the network, and wallet infrastructure increasingly allows users to interact with crypto without leaving an interface they already understand.
Some of these numbers are difficult to reconcile with what we normally consider meaningful crypto adoption. Tapping a screen in anticipation of an airdrop is obviously not equivalent to becoming a recurring on-chain user. But dismissing the entire phenomenon for that reason probably misses what TON has demonstrated.
It has made participating in crypto unusually easy.
Whether it can make that participation worth returning for is a much harder question.
A rather complicated family tree
TON’s relationship with Telegram is both the reason the network is interesting and the reason it needs to be understood carefully.
Telegram originally developed the Telegram Open Network after raising approximately $1.7 billion from investors in 2018 through the sale of rights to its proposed Gram tokens. The ambition was considerably broader than simply adding payments to Telegram: TON was conceived as a high-performance blockchain architecture capable of supporting applications and payments at the scale of Telegram’s existing network.
That plan ran directly into the SEC.
In 2019, the Commission sued Telegram over the Gram offering, arguing that the planned distribution constituted an unregistered securities offering. A federal court subsequently prevented the distribution, and in 2020 Telegram agreed to return more than $1.2 billion to investors and pay an $18.5 million civil penalty. Telegram formally stepped away from the project.
The story did not end there.
Telegram had released TON’s code as open source. Independent developers continued working on it, eventually producing the network we now know as The Open Network, with Toncoin rather than Gram as its native asset. The TON Foundation emerged to support its development.
This distinction matters. TON is not simply “Telegram’s blockchain”, even though that description is tempting. Telegram and the TON Foundation are formally separate organisations. At the same time, pretending there is no meaningful relationship between the two is equally unhelpful. Telegram endorsed TON as its Web3 infrastructure in 2023, and TON-based services have increasingly been integrated into the application.
The relationship is therefore somewhat unusual: legally and organisationally distinct, but economically and strategically increasingly intertwined.
That tension sits at the centre of the thesis.
Distribution, distribution, distribution
Most Layer 1s have historically competed on some combination of throughput, fees, liquidity, developers and incentives. These things matter, but they have also become increasingly commoditised.
TON has something much harder to manufacture: distribution.
Telegram already has the users. More importantly, it already has the social graph through which applications can spread.
A Telegram Mini App can be discovered through a group chat, launched inside Telegram and shared with another user without asking either person to download a new application. Bots can communicate directly with users. Payments and rewards can sit alongside existing social behaviour. The application doesn’t need to convince the user to leave Telegram before it can begin onboarding them.
This substantially changes the funnel.
The conventional crypto onboarding flow might involve discovering an application, downloading a wallet, creating and securing a seed phrase, funding the wallet through an exchange or bridge, switching to the correct network, and finally interacting with the product.
Every additional step is an opportunity to lose the user.
Telegram allows much of the application experience to happen before the user necessarily understands that there is a blockchain underneath it.
That might sound almost trivial. I don’t think it is.
The best consumer infrastructure tends to become invisible. Most people using Spotify do not think about content-delivery networks. Someone sending money through Revolut does not need to understand the banking infrastructure settling the transaction. Crypto has often expected the opposite: users are exposed to chains, gas, bridges, wallets, signatures and addresses before receiving much utility in return.
TON’s more interesting proposition is that perhaps they shouldn’t be.
Notcoin and the tap-to-earn machine
The clearest demonstration so far has been Notcoin.
Notcoin began as an almost absurdly simple Telegram game: open a Mini App and tap a coin to accumulate points. There was little pretence of sophisticated gameplay. The attraction was the expectation that participation would eventually translate into an on-chain token.
It worked.
By the time NOT launched in May, the project reported more than 35 million participants, with the token subsequently listing on major exchanges. The important part was not whether tapping a digital coin constituted a good game. It was how quickly Telegram allowed an application with a financial incentive to spread through its social graph.
Hamster Kombat has subsequently taken the model considerably further. By July, Telegram’s Pavel Durov said the game had reached 239 million users in roughly three months; the project now claims more than 300 million players. The numbers are extraordinary, even allowing for the obvious questions around bots, multiple accounts and what exactly constitutes an active player.
What we know is that financial incentives combined with Telegram distribution are extremely effective at generating participation.
The model also has an obvious weakness. If the primary reason to use an application is the expectation of receiving a token, the application eventually has to answer what happens after the token arrives.
Crypto has seen this movie before.
Liquidity mining, play-to-earn and points programmes can manufacture impressive early metrics because users are being paid for behaviour. The difficult part is separating acquisition from retention. Incentives can introduce somebody to a product; they cannot indefinitely substitute for the product itself.
That makes the current tap-to-earn cycle simultaneously impressive and fairly difficult to underwrite.
Farming without knowing you are farming
There is nevertheless something genuinely novel here.
TON and Telegram have dramatically lowered the level of sophistication required to become an airdrop farmer.
Historically, farming a new network might require bridging assets, interacting with smart contracts, managing multiple wallets and understanding enough about crypto infrastructure not to accidentally lose your money. On Telegram, a user can participate in essentially the same speculative behaviour by opening a Mini App and pressing a button.
That sounds ridiculous because, to some extent, it is.
But reducing a complicated behaviour to a button is exactly what good consumer software tends to do.
The question is what happens after that abstraction has brought the user in. If somebody’s first interaction with crypto is earning points inside Hamster Kombat, can the same interface subsequently introduce them to payments, savings, commerce or other financial applications?
That transition is considerably more interesting than the clicker game itself.
USDT may matter more than the games
This is where I think stablecoins become important.
Tether launched USDT on TON in April 2024, placing the most widely used dollar stablecoin directly alongside Telegram’s distribution. The significance is not that Telegram users suddenly need another blockchain on which to hold USDT. There are already plenty.
It is that Telegram already functions as communication infrastructure for hundreds of millions of people, including communities where cross-border payments remain expensive or inconvenient.
Communication and payments have always sat unusually close together. WeChat demonstrated how naturally messaging can evolve into payments when the financial layer is embedded deeply enough into the social product. Telegram has the beginnings of a similar primitive, although obviously without anything approaching WeChat Pay’s adoption today.
A user sending USDT to somebody they already speak to on Telegram is conceptually much easier to understand than sending an ERC-20 to a hexadecimal address on a network they have never heard of.
This is the part of TON I find considerably easier to take seriously than tap-to-earn.
Games may be the acquisition channel. Stablecoins could be the utility.
Telegram as an economy
There is another piece of the ecosystem that receives less attention than the games: Telegram already contains things people are willing to pay for.
Fragment allows Telegram usernames and anonymous numbers to be bought and sold using TON. Telegram has also introduced advertising revenue sharing for channel owners, with payments made in Toncoin.
This matters because it gives TON something many crypto ecosystems lack: economic activity tied to a product that exists independently of the blockchain.
Telegram does not need somebody to invent a reason for a valuable username to exist. Valuable usernames already exist because Telegram has hundreds of millions of users.
It does not need to manufacture creators who want to monetise audiences. Those creators already operate Telegram channels.
Crypto can then become the settlement layer underneath behaviours that already exist rather than the reason those behaviours have to be invented in the first place.
That distinction is worth dwelling on.
A lot of crypto applications begin with the token and work backwards towards finding something for people to do with it. Telegram begins with communication, communities, advertising, digital identity and distribution. TON has the opportunity to financialise pieces of an economy that already exists.
Whether users actually want that financialisation remains to be seen.
The architecture is different for a reason
TON is also technically quite different from the EVM ecosystems most crypto developers are accustomed to.
The network uses an asynchronous architecture built around message passing between smart contracts. Contracts behave more like independent actors: they receive messages, update their own state and send messages onwards. Transactions that appear conceptually atomic on an EVM chain may therefore unfold as a sequence of messages across TON.
The architecture is related to TON’s broader approach to scalability. The network was designed around dynamic sharding, allowing work to be distributed across multiple shardchains as demand grows.
In theory, this architecture makes sense for what TON wants to become: infrastructure capable of servicing consumer applications operating at enormous scale.
In practice, complexity moves somewhere rather than disappearing.
Developers accustomed to Solidity face a different execution model and languages such as FunC, alongside different assumptions around asynchronous messaging and contract behaviour. The ecosystem’s tooling, libraries and infrastructure remain considerably less mature than Ethereum’s.
Distribution can attract users.
It does not automatically attract developers.
TON ultimately needs both.
The DOGS stress test
The end of August provided a fairly timely reminder of the gap between theoretical scalability and production infrastructure.
TON stopped producing blocks twice within roughly two days as the network dealt with extraordinary transaction load associated with the DOGS token distribution. One outage lasted around six hours; block production was disrupted the following day again as validators struggled with the load.
There is an irony here.
The network is explicitly designed around the possibility of bringing enormous consumer activity on-chain. Then one of the first genuinely enormous consumer distributions arrived and contributed to the network losing consensus.
That does not mean TON cannot scale. Early networks break, particularly under workloads they have not previously experienced. Ethereum itself has a long history of applications exposing infrastructure constraints, CryptoKitties being the obvious early example.
But it does make the recent outages particularly relevant.
TON’s advantage is distribution at a scale most blockchains can only imagine. Its infrastructure therefore has to survive workloads most blockchains never encounter.
The thing that makes TON interesting is also likely to be what tests it hardest.
Telegram without TON; TON without Telegram
There is another risk which I think deserves considerably more attention.
How much of TON’s value exists independently of Telegram?
This became particularly difficult to ignore following Pavel Durov’s arrest in France on 24 August. The details of the case are primarily about Telegram rather than TON, but the market’s reaction exposed how closely investors perceive the two.
Formally, Telegram and TON are separate.
Practically, much of the TON thesis depends on Telegram continuing to integrate, distribute and support TON-based applications.
That creates an unusual dependency for an independent Layer 1. Ethereum does not depend on a single consumer application for distribution. TON’s greatest competitive advantage is unusually concentrated.
The relationship cuts both ways.
If Telegram continues integrating TON, very few crypto networks have access to a comparable distribution channel. If that relationship weakens, through regulation, strategy or otherwise, TON becomes a considerably more conventional Layer 1 competing for developers, liquidity and applications against ecosystems with much deeper infrastructure.
The appropriate way to think about Telegram is therefore not simply as an advantage.
It is both TON’s moat and its dependency.
What are the users actually worth?
That leaves perhaps the hardest question.
TON can produce user numbers that make almost every other blockchain look irrelevant. But blockchain metrics are particularly easy to misunderstand when users are heavily incentivised.
A Telegram account is not necessarily a wallet. A Mini App user is not necessarily an on-chain user. An on-chain user is not necessarily economically valuable. And somebody tapping a hamster in anticipation of an airdrop should probably not be valued in the same way as somebody repeatedly sending USDT, paying for Telegram services or interacting with applications after incentives disappear.
The distinction between distribution and monetisation is therefore important.
TON has demonstrated distribution.
The next stage is proving what that distribution is worth.
I would pay much closer attention to stablecoin balances and transfers, recurring wallet activity, application retention after token distributions, developer growth and economic activity that does not require continuously issuing new incentives.
Those numbers tell us considerably more than registrations.
Distribution as infrastructure
There is an old line in startups that distribution matters as much as product. Crypto occasionally behaves as though this rule does not apply.
We have spent years building technically impressive infrastructure and then attempting to bribe users into discovering it.
TON is an interesting inversion of that model.
The distribution already exists.
Telegram has hundreds of millions of users, enormous network effects and a particularly strong presence within crypto itself. TON provides a financial and computational layer that can increasingly sit beneath that existing network. Mini Apps make applications discoverable through social interaction. Stablecoins make value transferable through the same interface. Fragment turns pieces of Telegram’s existing digital economy into on-chain assets.
The pieces fit together unusually well.
What remains unclear is whether they produce an enduring economy or simply an extraordinarily efficient machine for distributing tokens.
TON does not need to onboard a billion people into crypto.
If the thesis works, many of them may never need to know they are using it.
That, more than the clicker games, token incentives or headline wallet numbers, is what makes the experiment worth watching.