Bitget is betting big on TON

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With the crypto market recovering from the 2022-2023 slump, The Open Network (TON) is emerging as a potential powerhouse, leveraging its Telegram roots and seeking independence as well. Industry experts are divided on whether this kind of “balancing act” will propel TON to new heights or leave it vulnerable to regulatory scrutiny.

Bitget, a major cryptocurrency exchange, is betting big on the future of TON. The company recently announced a $30 million investment in TON tokens through its partnership with Foresight Ventures, a Web3 investment firm. This move signals confidence in the potential of the TON ecosystem.

“We believe deeply in the success and possibilities of TON,” says Vugar Usi Zade, Chief Operations Officer at Bitget, in an exclusive interview with Crypto Briefing during TOKEN 2049 in Singapore.

“TON has established a strong position among users in regions such as the CIS, South Asia, Southeast Asia, Brazil and Nigeria,” said Zade.

Innovative designs that drive user acquisition

Asked what factors they believe are driving or driving this trend, Zade says the narrative around mass adoption has changed in a big way.

“In 2016, when I started working in crypto, the narrative was that this technology was ‘revolutionizing’ and that people would come to Web3. But after six years or so, we noticed that people are not coming to Web3, we have to go to the people,” said Zade, noting that this specific aspect is also inherent in Telegram.

With over a billion users and growing, Telegram is the “real case” for onboarding the next billion users. Zade cites the example of Facebook, which recently launched its Threads app.

“They could onboard hundreds of millions of users on this platform because they already had a huge user base. I believe in capitalizing on these aspects so that people, users, can benefit from the projects, tools and resources in the TON ecosystem,” observes Zade.

Zade sees practical utility and mass adoption as core challenges to how TON could reach retail users, an issue he notes is also prevalent in the crypto industry, hence the prospects for on-chain abstraction and the push towards a greater accessibility for crypto UX.

At this point, we asked Zade what he thinks about the term “de-Telegrammization” and what its side effects might be in the industry.

According to Zade, there is huge potential for Telegram to become a “central access point” for users, acting as an acquisition channel, but not the only channel.

“It doesn’t necessarily mean users should or would choose to stay there forever,” opines Zade, noting that the need to build beyond Telegram’s initial audience would become more apparent.

Telegram’s massive user base: a double-edged sword?

TON’s biggest asset — and arguably a potential liability — is its close association with Telegram, the encrypted messaging app that has more than a billion users. This vast user base provides an unparalleled launch pad for crypto adoption, but it also raises concerns about over-reliance on a single platform.

“Telegram is a great machine to acquire or introduce users to crypto or crypto projects,” explained Usi Zade. “But there’s definitely going to be a huge need to build beyond that Telegram audience.”

The concept of “de-Telegramization” has gained traction in the crypto community, describing TON’s gradual move away from its messaging app roots. According to data from Bitget Research, the TON ecosystem currently consists of over 1,100 decentralized applications (dApps), with leading projects emerging in sectors such as DeFi, GameFi, and utilities.

TON’s blockchain recently reached over 1 billion transactions, and the rapid growth can be attributed to innovative user acquisition models, especially in the gaming sector. “Tap-to-Earn” games like Notcoin and Hamster Kombat have attracted millions of users, many interacting with blockchain technology for the first time and standards like gasless transactions being introduced to such a broad user base.

“I like to call it the IKEA effect,” said Usi Zade, drawing a parallel with the furniture retailer. “When you buy something from IKEA, you bring it home, you build it, you think you’re getting something. Now with Tap-to-Earn games, you feel like you’re earning or doing something.”

These games have proven remarkably effective in onboarding new users. Notcoin, for example, has amassed over 30 million participants since its launch in January 2024, with 5 million daily active users at its peak.

While games and meme tokens drove the initial growth, TON’s long-term success may depend on its ability to facilitate real-world transactions. “Recently, there is a taxi app on Telegram. I use them. They are available in Singapore, for example, where you can pay with a TON token,” said Usi Zade.

This push toward practical applications aligns with broader industry trends. Standard Chartered Plc expects the tokenization market to reach about $30 trillion by 2034, with trade finance contributing a 16 percent share.

DeFi Development: A Critical Weakness

Despite its strengths, TON faces significant challenges in the field of decentralized finance (DeFi). According to data from DeFiLlama, the total value locked (TVL) of TON is only $356 million, representing only 0.43% of the total of all blockchains.

“There will definitely be players who choose not to have Telegram and still deserve to have access to the projects being built,” Usi Zade admitted. This underdevelopment in DeFi could limit TON’s growth potential and ability to compete with more established blockchain ecosystems.

As TON tries to expand beyond Telegram’s shadow, regulatory concerns cast a long shadow. The arrest of Telegram founder Pavel Durov in France on August 25, 2024 sent shockwaves through the TON ecosystem. In the week following the arrest, the price of the TON token fell by over 17.6%, while the network’s TVL experienced a sudden 60% drop in a single day.

“The regulatory environment surrounding Telegram could pose significant challenges to the TON ecosystem, potentially affecting its expansion and adoption globally,” the Bitget Research report said.

Despite this, TON continues to negotiate its complex relationship with Telegram, even as industry observers remain divided over its future prospects. Bitget’s strategy appears to be one of cautious optimism, actively working on new user acquisition channels while monitoring regulatory developments.

“If the TON people can find a way for this token to turn into a real utility and build more projects that serve or respond to the masses, then there are huge opportunities for them to tap beyond that audience (Telegram), Zade says.

With major players like Bitget continuing to invest and support the ecosystem, TON’s ability to strike the right balance between capitalizing on Telegram’s massive user base and developing independent infrastructure may determine its place in the crypto industry.

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