The Open Network (TON) Blockchain is showing signs it may be the next Solana by virtue of challenging the historical smart contract leader, Ethereum. 

Driven by Telegram’s crypto wallet built into every app and the rampant play of mini-games, the TON blockchain has surpassed Ethereum in daily active addresses every day in June except one, a sign of growing popularity for the network connected to Telegram, the popular messaging application with more than 900 million monthly active users. 

According to blockchain analytics firm Artemis, TON has averaged 465,200 daily active addresses in June with a high of 568,300 on June 3, levels Ethereum has not crossed as the latter has yet to see more than 400,000 daily active addresses on its base layer in the month, excluding its various layer 2s. 

“For early ecosystems such as TON, we believe [daily active users] is a better metric to watch than [total value locked] or fees, as gathering users is a higher priority than making money,” wrote Kelly Ye, portfolio manager at liquid venture firm Decentral Park Capital, in her weekly newsletter published on May 20. 

Despite having higher levels of daily active addresses than Ethereum, TON’s growing figures still dwindle in comparison to Solana’s which has averaged roughly 1.64 million daily active addresses in June. 

“TON is good for the blockchain industry as data shows it’s adding net new activity,” wrote Andrew Van Aken, a data scientist at Artemis, in a Telegram message to Unchained. “Daily active addresses on both Solana and TON have increased over the course of the year, indicating TON is onboarding new addresses.”

TON’s Opt-Out Wallet Launches With Massive User Base

Telegram’s built-in community aided by its in-app crypto wallet has helped propel TON’s level of daily active addresses to where it is currently, argued Jehan Chu, an investor in the TON ecosystem and managing partner of blockchain venture capital firm Kenetic.

The native crypto wallet in Telegram is “an opt-out wallet, which means other than the 30 or 40 million US users who are geoblocked, the other 860 million Telegram users all have a crypto wallet natively [and] automatically,” Chu said in a conversation with Unchained. “Let that sink in… That is Thanos-level kind of change.”

Telegram has been able to scale its technology as well as the onboarding of its large user base through the official rollout of Telegram’s crypto wallet, launched in Sept. 2023. “What’s interesting about this is it’s not really about wallets. It’s about the seamless integration of web3 technology into where users already are,” namely messaging, “one of the highest traffic destinations for users on a daily basis,” said Chu. 

“99.999% of blockchain projects are a tech idea trying to create a community – from nothing.  According to CoinMarketCap there are more than 23,000 cryptocurrencies.  That’s a hard road for most,” wrote Dan Morehead, CEO of crypto-focused venture firm Pantera, in the company’s May announcement about how TON was its largest investment ever. “Telegram is a community [of over 900 million users] integrating blockchain technology.  That’s just got to be easier.”

Pantera, which has $4.7 billion in assets under management, cited other reasons in its rationale for investing in TON, including its values as a neutral platform independent of state influence and easy onboarding process. 

Games Drive Record Levels of Activity

What has driven the recent surge in activity is another factor that led Pantera to its massive investment: an ecosystem of mini-applications which include chatbots and games. Referring to Telegram’s increased levels of daily active addresses, Chu said it arose from “a combination of things – obviously, games are a big driver.” A number of mini-games within Telegram have attracted substantial attention from its users, such as Notcoin, Hamster Kombat, and Catizen. 

Notcoin, a free game on Telegram where over 35 million users have tapped their screens to earn tokens, rolled out its cryptocurrency in May and has since garnered a market cap of $1.6 billion, data from CoinGecko shows. Similarly, Hamster Kombat has nearly 33.6 million subscribers in its Telegram channel, while Catizen has over 3.6 million users. 

Bloomberg also reported on Tuesday that many in the crypto space believe this trend of mini-games in Telegram “could be the ‘killer app’ that will define the current bull market.”

While they don’t interact with the TON blockchain, popular trading bots such as BONKbot native to Solana and Banana Gun, which is on Ethereum, depend on Telegram to generate fees from enabling crypto users to trade on their mobile devices. Telegram also has trading bots for the TON blockchain, such as sTONks and TOB Bot. 

“We believe that similar TON-native Telegram bots will become the preferred user experience for many traders,” according to Ryan Barney, a partner at Pantera. 

The price of TON has increased nearly 392% to around $7.40 in the past year, bringing its market cap to $18 billion. Despite outpacing the two largest cryptocurrencies by market cap, BTC and ETH, TON’s price performance this last year is not as strong as Solana’s, whose native token soared 860% in the same period to a market cap of more than $68 billion.

According to Decentral Park Capital’s Ye, TON has solid potential “to close the gap in market cap with Solana this cycle.”

Correction (June 13, 2024 11:14 A.M. EST): The previous title erroneously referred to TON Blockchain as belonging to Telegram. Following the SEC’s ruling, Telegram has no relationship with The Open Network (TON) Blockchain, which is now stewarded by the TON Foundation. Unchained regrets the mistake.