In general, I found that the ecological construction approach of the TON official is different from that of traditional execution layer projects, also known as public chains. It seems to have chosen traffic-driven rather than asset-driven. This brings a new requirement for developers. If they want to obtain the official endorsement or become a project that the official prefers, the core operational indicators during the cold start phase need to transition from asset-related indicators such as Total Value Locked (TVL), market capitalization, and number of holders to traffic-driven indicators such as Daily Active Users (DAU), Page Views (PV), and Unique Visitors (UV).
Summary: Recently, I have been studying the relevant technologies for TON DApp development and thinking about some product design logics. With the increasing popularity of TON, there have been more AMA sessions, roundtable discussions, and other activities, and I have participated in some of them and discovered some interesting things that I want to share with you. In conclusion, I found that the ecological construction approach of the TON official is different from that of traditional execution layer projects, also known as public chains. It seems to have chosen traffic-driven rather than asset-driven. This brings a new requirement for developers. If they want to obtain the official endorsement or become a project that the official prefers, the core operational indicators during the cold start phase need to transition from asset-related indicators such as TVL, market capitalization, and number of holders to traffic-driven indicators such as DAU, PV, and UV.
Asset-driven has always been the core criterion for Web3 project development and operation
Traditionally, the core criterion for judging the success of public chain projects has been how many assets are accumulated and how the composition and distribution of these assets can determine their sustainability and core competitiveness. In simple terms, the TVL of a chain, the composition of these TVL, the proportion of native assets, the proportion of blue-chip coins and altcoins, the proportion of voucher assets, and the extent of the Matthew effect. So what do these questions correspond to? Let’s give a few examples:
Suppose a chain has a higher proportion of blue-chip coins such as BTC and ETH in its total value, and the top 10% of people own 80% of the assets. This roughly indicates that the chain is more friendly to traditional cryptocurrency whales or has a stronger appeal to traditional cryptocurrency whales. In most cases, there may be support from projects similar to CEX.
Suppose a chain has a higher proportion of native assets and a more evenly distributed distribution, and the standard deviation of user assets is small. This roughly indicates that the team’s operational capabilities are good, or there are related community resources and good community construction, and the developer ecosystem is more active. In most cases, it may be driven by a successful background community and has broader community support.
Suppose a chain has a higher proportion of voucher assets, which needs to be treated with caution. This roughly indicates that it is likely still in the early stage of construction and has not effectively attracted core assets. However, the team may have some whale resources, but the cooperation reached is not close or the attraction is not strong, resulting in whales being unwilling to directly transfer core assets to it. Web3 projects on such chains are easily harvested by whales in a tidal manner.
Of course, different situations may have different interpretations, but everyone will find that assets are the key to judgment. The reason for this situation is that the core value of Web3 lies in digital assets. This topic has been fully discussed in my previous article “The Popularity of Runes Represents a Retreat in Cryptographic Technology Development, But Also the Best Reflection of the Core Value of Web3”. Interested friends can discuss it with me. Therefore, for a long time, Web3 developers have focused on how to create and maintain asset value or how to effectively attract assets in the product design, cold start plan, and economic model design processes, depending on the type of project, the priority of these two issues may vary.
However, it seems that the TON team did not choose to follow this approach in the process of ecological construction, but chose the conventional method of traffic-driven projects in Web2 projects or traditional Internet projects to guide or support products and build ecosystems. The reason for saying this is twofold. First, there have been many articles analyzing TON’s ecological DApps, and I believe everyone should have a certain understanding of the current state of the TON ecosystem. The most active category of apps currently is similar to Notcoin, a traffic-based mini-game. If we study its technical architecture in detail, it can’t even be considered a DApp because, in most cases, Web3 games have two significant characteristics: on-chain asset props and on-chain core algorithms, both of which utilize the trustless capability of blockchain to reduce trust costs in game operations. However, Notcoin does not have these characteristics. It only maps a final reward point as an FT token on the TON public chain and performs an airdrop. There are many similar examples, and the current situation is naturally inseparable from TON’s support. This shows that in the eyes of the TON official, some traditional Web3 values are not as important as traffic. As long as there are users, you may not even be a Web3 project and still receive official support.
Second, in some public occasions, TON officials also choose to actively guide the community to do product design in this direction. Last Friday, I participated in a Twitter space about the TON ecosystem, which included TON Foundation officials and some Web3 VCs. My impression after listening was that there is a significant gap between the two in their views on the TON ecosystem. The officials seem to like to compare the TON ecosystem to WeChat Mini Programs and encourage traffic-driven products. However, Web3 VCs talk more about considerations regarding digital assets. This also indicates that the official may have significant differences from the traditional Web3 model in the process of building the ecosystem.
So why did the TON official make this choice? This involves the core narrative logic of TON’s ecological construction, which is the potential to break through barriers rather than the ability to accumulate assets.
The core narrative logic of TON’s ecological construction: the potential to break through barriers rather than the ability to accumulate assets
How to understand this sentence? We know that the core narrative logic of most public chain projects is still the competition for digital assets. That is, on the basis of satisfying the core values of Web3, such as decentralization and other prerequisites, significantly improving network throughput, reducing usage costs, and improving efficiency. Its core value lies in the ability to accumulate digital assets. A public chain that is cheaper and faster to use will undoubtedly attract more digital assets, and more digital assets are the value support for the business models of these public chain projects because higher adoption rates mean more demand for the official tokens used as transaction fees, which will support the value of the tokens held by the project party.
However, TON’s desired narrative is not in this direction but in the potential to break through barriers. You can easily find such articles or opinions on the Internet: Telegram has the highest number of users among communication apps globally, reaching 800 million people, and TON, backed by this large user base, will have unparalleled potential to break through barriers. Breaking through barriers is the core narrative logic of TON’s ecological construction.
So why is there such a difference? This core involves two issues:
TON’s core business logic;
The relationship between TON and Telegram;
First, TON’s core business logic is actually similar to that of most public chain projects, which is built on the maintenance of the value of the TON token. However, for TON, there is an additional choice for maintaining value compared to other projects, which is Telegram’s advertising system. Since the beginning of this year, the TON token has gained an important use case as a settlement token in Telegram’s advertising commission system. Advertisers pay for traffic acquisition costs with TON tokens, and this part of the cost is paid as a commission to the corresponding channel owner, with Telegram deducting a certain percentage of the fee.
This means that in addition to being used as transaction fees on the chain, there is a second choice for supporting the value of the TON token, which is to expand the Telegram advertising system. This is actually a traffic-driven model commonly seen in Web2 projects, except that the settlement token has changed from fiat currency to cryptocurrency. In order to optimize the efficiency of the Telegram advertising system, it will involve two aspects: creating more valuable advertising spaces and tagging Telegram users. The TON team found that a highly efficient scenario to achieve these two effects is Mini Apps. First, as long as Mini Apps are used frequently and the advertising commission system is introduced, they can become high-quality advertising spaces.
Second, we know that Telegram, as an application that emphasizes privacy protection, it is extremely difficult and sensitive to tag users for advertisers to achieve precise marketing. Therefore, Telegram cannot provide precise marketing services to advertisers, such as distributing an advertisement for a dessert brand to Indian users who like desserts. This affects Telegram’s commercialization capabilities. However, in Mini Apps, since the participating entity is not Telegram but a third-party application, Telegram is just a carrier, which provides the conditions for tagging users. In the process of user participation in Mini Apps, user habits and preferences will be tagged, and the entire process is not easy to cause user aversion, but rather smooth.
The above two aspects also explain the phenomenon mentioned earlier. In the selection of projects to support, TON does not value some traditional Web3 values. As long as there is traffic, you can receive official support.
So, some people may wonder, shouldn’t this construction process be led by Telegram to achieve better results? As a public chain, in order to build a cohesive community, it should still adhere to some traditional Web3 values. This involves the second issue, the relationship between TON and Telegram. I have already introduced the relationship between TON and Telegram in my previous article. In summary, from the perspective of phenomena, TON’s position is more like a subsidiary supported by Telegram. This subsidiary has certain legal isolation, which allows it to operate certain risky businesses through the subsidiary, thereby reducing its own risks. For Telegram, which has such a high adoption rate and emphasizes privacy protection, it naturally receives “special attention” from government departments in various countries. In order to explore a more stable and less easily interfered profit model, Telegram chose to use cryptocurrency instead of fiat currency as the settlement target in the advertising system. However, this will bring new risks to areas that are not friendly to encrypted assets. Therefore, the current architecture can effectively reduce this risk. Based on an understanding of this relationship, we can easily draw a conclusion that the two are essentially a master-slave relationship, so when developers design applications, it is recommended to think from the perspective of Telegram rather than the TON public chain to make it easier to obtain official support.
In conclusion, in general, TON has chosen traffic-driven rather than asset-driven in its ecological construction path in the short term. This brings a new requirement for developers. If they want to obtain the official endorsement or become a project that the official prefers, the core operational indicators during the cold start phase need to transition from asset-related indicators such as TVL, market capitalization, and number of holders to traffic-driven indicators such as DAU, PV, and UV.
