Animoca Brands Research has dropped Part 2 of its deep dive into The Open Network (TON), focusing on the blockbuster partnership between TON and Telegram. Following Part 1's look at TON's history and revenue model, Part 2 zooms in on the effectiveness of their collaboration. With a roadmap to onboard millions into web3, the early results paint a compelling picture.

Here's what we've learned from the report, including how TON is driving blockchain adoption and what's keeping Telegram ahead of the messaging game.

A Bold Goal: 500 Million Blockchain Users by 2028

The partnership, launched in September 2023, aims to convert 30% of Telegram's active user base into blockchain adopters by 2028. At the heart of this plan are Telegram Mini Apps, a feature that bridges Telegram's web2 audience with TON's web3 ecosystem.

By July 2024, Mini Apps had already amassed 500 million MAUs, and by October, 30 million users had made their way into the crypto world.

The Playbook: From Games to Tokens to DeFi

The partnership leans on a three-step strategy to make blockchain adoption as smooth as possible:

1. Start with Tap-to-Earn Games

  • TON kicked things off with social games like Notcoin, Hamster Kombat, and Catizen. These titles combined addictive gameplay with crypto rewards, racking up millions of users each.
  • For example, Notcoin attracted 35 million users pre-token launch, while Hamster Kombat hit a staggering 300 million users.

2. Convert Gamers into Crypto Owners

  • Here's the clever part: users earned points in games, which could then be swapped for on-chain tokens like Toncoin or meme coins.
  • Airdrops proved pivotal, with wallets surging from 4.2 million to 8.5 million within a month of Notcoin's token launch. Similarly, Hamster Kombat contributed 3.2 million on-chain claims, and Catizen added 1.8 million, boosting wallet activation.

3. Keep Users Hooked with DeFi

  • To retain users, TON turned to DeFi tools like staking and token rewards, alongside programs like The Open League, which reward high-performing apps. Retention, however, remains a challenge. Top games retained 60% of their users post-launch, while less popular ones saw steep drop-offs.

Explosive Growth for TON Blockchain

The TON ecosystem has gone from niche to booming in just over a year. Key milestones include:

  • Wallet Growth: From 0.8 million activated wallets in September 2023 to a whopping 32 million by October 2024, a 39-fold increase.
  • Transaction Surge: Monthly transactions skyrocketed to 220 million in Oct 2024, a 30-fold increase from September 2023. Most of these transactions (around 60%) involve Toncoin.
  • Total Value Locked (TVL): Hit $726 million in October 2024, driven by Decentralized Exchanges (DEXs) and liquid staking protocols.

TON has also shown impressive adoption speed, hitting milestones like 30 million monthly transactions in five months—something Ethereum took years to achieve.

Telegram's Win: Profits and User Engagement

Telegram is also cashing in on the partnership, transforming its user base into a reliable revenue stream:

  • Premium Account Growth: Subscriptions jumped from 5 million in January 2024 to 10 million by September, thanks to enhanced features like ad-free browsing.
  • Revenue Boom: Telegram is on track to hit $1 billion in revenue in 2024, driven by premium accounts, collectibles, and ads powered by Toncoin.
  • New Tools: Features like Telegram Stars, a rewards program, and USDT on TON, let users engage with blockchain tools without leaving the app.

This growth sets Telegram on a path to profitability, a key goal as it eyes an IPO before 2026.

Challenges Ahead

Despite the gains, TON's goal of converting 500 million users remains a steep climb. Retention is a concern, with many users disengaging after initial hype. While the numbers are promising, challenges remain:

  • Retention: Retaining crypto users post-onboarding is proving tough, with retention rates for even top projects capped at 60%​.
  • Scale: Reaching the ambitious target of 500 million users takes nearly a 20x increase from current adoption levels​ (around 30 million activated wallets).

To address these issues, TON is shifting to a community-led governance model through Society DAO, empowering users to drive the platform's next wave of innovation.

What's Next?

With Part 3 of Animoca Brand's report set to dive into TON's governance structure and future strategies, the partnership between TON and Telegram is clearly off to a flying start. As they push toward their 2028 goals, the foundations they're laying today could reshape blockchain adoption on a global scale.