By Elizabeth Howcroft
(Reuters) – A coin known as TON has leapt in worth in current months, with traders betting its integration with messenger service Telegram may carry the cryptocurrency to the app’s estimated 900 million customers.
Telegram endorsed TON in September final 12 months, saying the blockchain and related token can be its “official Web3 infrastructure”. Earlier this month, TON mentioned that tokens is also issued on its blockchain, permitting Telegram customers to ship the stablecoin to one another throughout the app.
The TON token has surged, reaching as excessive as $7.63 on April 11, in contrast with round $2.21 a 12 months earlier, in line with CoinGecko knowledge.
With $18.3 billion in circulation, it is the tenth largest cryptocurrency, coming after memecoin .
The prospect of a “tremendous app” or “the whole lot app”, uniting funds and procuring with social media or messaging providers, has lengthy been a holy grail for traders, who look to China’s WeChat for inspiration. Within the crypto world, it is typically known as “SocialFi”, brief for social finance.
Such concepts drove Elon Musk’s 2022 acquisition of Twitter, now X. Binance, which helped fund the buyout, mentioned it might discover how crypto could possibly be used on the platform. Britain’s Revolut, in the meantime, has approached it from the opposite course, beginning with a finance app then including social features on high.
Whereas the attraction of TON is a part of broader curiosity in tremendous apps, it has additionally been helped by an total revival in altcoins, mentioned Thomas Peuch, CEO of digital asset hedge fund Indigo.
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“TON did outperform loads of its friends as many individuals are shopping for into the challenge as curiosity in alts returned and because of the backing of Telegram,” he mentioned, including that Indigo had traded the TON token.
TON, brief for “The Open Community”, has a crypto pockets product inside Telegram with greater than 6 million month-to-month customers.
LIBRA FAILURE
Efforts to carry crypto funds into social media haven’t to this point succeeded on a large scale. Fb (NASDAQ:), now Meta, wound down its “Libra” cryptocurrency challenge after fierce opposition from regulators globally, who have been involved that it may hurt monetary stability and erode management over financial coverage.
“The current foray into crypto funds by Telegram introduces a brand new use case for the app, however its acceptance and adoption are nonetheless within the nascent levels,” mentioned PitchBook senior analyst Robert Le, who mentioned there was a rise in enterprise capital curiosity in SocialFi.
“The principle problem is shifting person perceptions in non-Asian markets, the place messaging apps are predominantly seen purely for communication fairly than as multi-functional platforms.”
Such integrations current “regulatory, technical and safety challenges”, mentioned Ram Gopal, a professor at Warwick Enterprise College.
“Regulators could also be involved about how these platforms adjust to present monetary rules,” he mentioned.
“Guaranteeing customers are protected against scams, fraud, and potential losses on account of cryptocurrency volatility can be a essential concern for regulators,” he added.
HISTORY OF TON
Telegram Messenger created TON’s blockchain in 2018 and raised $1.7 billion by promoting the related cryptocurrency. However the challenge was hit by costs from the U.S. Securities and Trade Fee, which mentioned the token sale violated federal securities legal guidelines.
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As a part of a 2020 settlement with the SEC, Telegram agreed to cease growing TON. It neither admitted to nor denied the SEC’s allegations.
A bunch of unrelated builders then continued to work on the challenge, choosing up the place Telegram left off, in line with a historical past on TON’s web site.
TON says it’s decentralised, based mostly on an open-source codebase, with no single controlling authority. There is a non-profit basis behind it, registered in Zug in Switzerland.
A spokesperson for TON mentioned that Telegram and TON have been distinctly separate entities.
The TON Basis’s president is Steve Yun, the physique’s web site says. Andrew Rogozov, former CEO of Russian social media website VK, is a founding member of the inspiration, in line with his LinkedIn profile. He appeared on stage with Telegram co-founder Pavel Durov and Tether CEO Paolo Ardoino at a convention in Dubai the place the partnership to subject the stablecoin on the TON blockchain was introduced.
(This story has been corrected to repair spelling Andrew Rogozov’s identify in paragraph 21)
