“Pantera Capital Backs TON: Insights from the Managing Partner”

"Pantera Capital Backs TON: Insights from the Managing Partner"

"Pantera Capital Backs TON: Insights from the Managing Partner"

Pantera Capital, a well-known cryptocurrency venture capital firm, announced today that it has invested in the native token of The Open Network (TON). At the same time, Pantera Capital’s Managing Partner, Paul Veradittakit, provided a detailed explanation of the firm’s investment logic.

Introduction
Combining the spirit of Web3 with tremendous distribution power
Creating a scalable platform for hundreds of millions of users
User-friendly experience
The era of cryptocurrency mini-applications
Unlocking new ways of making money
Native stablecoin payments
Conclusion

We at Pantera Capital are excited to announce our latest investment in TON. TON is an underlying network initially designed by Telegram and continued to be developed by the open-source community. We believe that TON has the ability to bring cryptocurrencies to the masses, as it has gained widespread adoption within the Telegram network. Telegram is a future-oriented, fast, and secure communication platform with over 900 million monthly active users for personal and group communication, large-scale community building, and content sharing.

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

Among the leading communication applications worldwide, Telegram stands out not only for embodying the spirit of many cryptocurrencies but also for its significant distribution power. Telegram’s monthly downloads are the closest competitor to Signal, with 10 times the downloads in January alone, surpassing 36.7 million.

Compared to other top communication applications, Telegram is the only major platform that is not subject to regulatory barriers and is capable of integrating Web3 to build an open blockchain network. While Messenger attempted to integrate cryptocurrency payments with Libra, it ultimately halted due to regulatory barriers in the United States. WeChat also attempted to integrate CBDC payments with limited scope for application development without permission.

We believe that due to the spirit of sharing in Web3 and its significant distribution power, Telegram is very likely to bring cryptocurrencies to the world.

The Open Network (TON) is a blockchain project developed by Telegram, aiming to create a decentralized network that supports multiple applications leveraging its massive user base. TON has a multi-component ecosystem, including TON blockchain, TON storage, TON DNS, and other TON services—all integrated seamlessly.

The core of this system, TON blockchain, is built for high performance and scalability, benefiting from its dynamic sharding mechanism for fast transaction processing. This architecture ensures that the network can handle millions of transactions per second and scale efficiently with the growth of users, making it an ideal choice for developers aiming to launch applications for hundreds of millions of users without sacrificing speed or security.

TON’s dynamic sharding enables the network to provide scalable services to millions of users.

In general, getting users to start using cryptocurrency applications can be quite challenging. New users need to remember a 24-word passphrase and secure it, but what if they forget it? Additionally, copying and pasting public keys for sending or receiving tokens may not be the best user experience.

Telegram simplifies many complexities through Top.co’s Telegram wallet, allowing users to seamlessly connect to mini-applications. Users can easily buy, sell, or manage tokens and NFTs, all through one interface, directly accessible through Telegram settings and personal chats.

Telegram’s wallet features include both custodial and non-custodial management based on TON, providing an easy onboarding experience for all users while also offering the option for experienced users to have full control over their keys. Through TON’s self-custodied wallet, users don’t need to remember their mnemonic phrase; instead, they can simply use Telegram and their email as a backup.

Top.co’s Telegram wallet already has 15 million users and is growing.

TON’s thriving ecosystem capitalizes on Telegram’s innovative design and massive user base. Over 300 million users interact with Telegram’s so-called “mini-applications” every month, which include chatbots and small games. Through TON, we envision integrating cryptocurrencies into these “mini-applications” to significantly enhance the user experience of these hundreds of millions of users. There are already over 300 projects on TON, with most building mini-applications on Telegram, which can be accessed through the Telegram App Center.

Earlier this year, we observed meme coin trading tools like BonkBot generating tens of millions of dollars in revenue through the user interface of Telegram. Now, with TON-based applications like StormTrade, users can trade perpetual contracts, cryptocurrencies, stocks, and equities through the same interface. StormTrade facilitates over $10 million in daily trading volume, and we believe similar TON-based Telegram bots will become the preferred user experience for many traders.

Telegram provides the foundation for viral social and gaming applications. Telegram games like Pixels and Fanzee Battles attracted millions of users within days, demonstrating the platform’s enormous potential for user engagement. Additionally, the cat-themed mini-game platform Catizen, based on TON, now has over 4 million users, with over 700,000 users playing daily. Notcoin is a TON-based social application where users compete to mine digital currencies and has quickly attracted over 30 million users – one of the fastest cryptocurrency adoption cases ever.

TON Foundation recently announced their incentive program that rewards developers of successful TON applications. We believe this will foster the potential for creating exciting new encrypted mini-applications that can attract mass participation.

TON unlocks many ways for the Telegram community to earn, share, and grow businesses. Fragment, as a decentralized marketplace on the TON network, provides a platform for users to trade collectibles such as virtual phone numbers and custom Telegram usernames. Fragment has facilitated over $350 million in sales of custom usernames and virtual phone numbers. This is just the beginning. In the near future, the 730 billion Telegram stickers sent may transform into NFTs. These NFTs will be available for purchase and sale through the TON blockchain.

Telegram integrates revenue sharing with content creators and channel owners through its Fragment platform, marking a shift away from the traditional social media model and allowing these creators to directly benefit from their channel’s advertising revenue. This approach not only rewards creators for their content but also promotes a closer relationship between the platform and its users, enabling a fairer distribution of financial interests within the digital ecosystem.

On April 19, 2024, Tether announced the deployment of its stablecoin, USDt, on the TON blockchain and Telegram wallet. This development is a major milestone for the cryptocurrency industry as it allows hundreds of millions of users to seamlessly send and receive stablecoins through the Telegram platform, making payments as simple as using Venmo or Apple Cash.

The scalability of the TON network allows transactions between two users to have a fixed fee of approximately $0.10, which is 66% cheaper than other cryptocurrency payment platforms. Additionally, Telegram will provide built-in deposit and withdrawal channels, including bank transfers and exchanges, further optimizing the user experience.

We believe that stablecoin payments on the Telegram wallet are particularly crucial for individuals in developing countries who often lack access to banking services and are forced to use complex cryptocurrency user interfaces to store and transfer funds. By deploying stablecoins on the TON network, cryptocurrencies are taking an important step toward realizing the vision of programmable peer-to-peer currency and a globally accessible decentralized financial system.

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

Telegram embodies the spirit of cryptocurrency—an open and free internet for everyone. Through TON, Telegram achieves a mutually beneficial relationship between scalable smart contract capabilities and a robust payment network, making breakthrough features that were not possible in the Web2 environment. Considering its massive user base, scalable infrastructure, thriving mini-application ecosystem, and native stablecoin transactions, TON taps into the potential of an active user network with 900 million participants.

At Pantera Capital, we are excited about this investment and look forward to supporting the future builders in the TON ecosystem. If you are developing on TON and share our enthusiasm, please feel free to reach out to us.