Original author: Jaleel Jialiu
Last week, the Yescoin team split and seized power, bringing traffic back to the TON ecosystem. It has been so long since we heard about the TON chain, and we began to recall this public chain backed by Telegram, which was on the eve of take-off for three years but was only popular for a few months.
At its peak, trading platforms rushed to launch tokens for Telegram mini-games. In more than four months, Binance, the worlds largest cryptocurrency trading platform, launched five TON ecosystem tokens in succession. Hundreds of mini-games emerged in a short period of time, with more than 2,000 being prepared for launch. Notcoins monthly revenue exceeded $300,000, and Catizen achieved revenue of more than $16 million. The TVL data of the TON chain increased by 70 times. The price of TON also rose from $2 to $8 at its peak. The markets expectations for the TON ecosystem were pushed to the highest point, and the industry once believed that Web3s traffic gold mine had finally found a new outlet.
However, this seemingly booming ecosystem is nothing more than a speculative game with a very short time window. In the summer of 2024, the market came to an abrupt halt - trading platforms stopped listing TON eco-coins, the founder of Telegram was arrested, the project parties were collectively silent, and the player group became a ghost town. Overnight, this track known as the traffic gold mine turned into a hollowed-out mine, leaving only a data black box, an overdrawn market, and abandoned developers.
What happened during this period? BlockBeats interviewed three former Telegram mini-game project owners to analyze the real reason why the TON ecosystem was short-lived.
False prosperity; black box traffic
The low customer acquisition cost of Telegram mini games has always been one of the hotly discussed topics. It is also one of the reasons why most Telegram mini game project parties choose to do projects. Today, it is also the root cause of the bubble in the entire ecosystem.
In Web3, the customer acquisition cost of a company such as a trading platform or a large blockchain game is around $10 to $15, but through Telegram games, this cost can be much lower than $1, around $0.7. KinKin is a project owner who left Telegram games half a year ago and has now turned to research in the AI Agent track. She added to BlockBeats: In some regions, it is even more exaggerated, such as India, where the customer acquisition cost can be as low as $0.002 to $0.05.
This extremely compressed customer acquisition cost has created a paradise for project factories, and real users have become dispensable to them.
“Before going public, I didn’t really need real users. The studio had enough volume. In a very short period of time, I was able to reach a volume of 200,000 to 300,000. This volume is a passing line for a Telegram mini-game, and it is considered a light to medium-sized volume.” Xiaoguang had managed the token launches of multiple Telegram mini-games. When answering questions from BlockBeats, he did not shy away from talking about the industry’s operating model.
This kind of gameplay has been standardized and streamlined by the industry. Several long-term cooperative studios are familiar with it and even outlive most Web3 projects. The project party and the studio will discuss how much volume is needed in the early stage of the project and how much volume needs to be supplemented before TGE (token generation event). Xiaoguang explained. If brushing volume alone is not enough, the data will be amplified by exchanging volume.
After reaching 200,000-300,000, we will exchange traffic - that is, the two games will attract traffic to each other to reach the next level. Xiaoguang added. Compared with traditional blockchain games, the data volume of Telegram mini-games has far exceeded that of most Web3 projects. But everything has two sides. The other side of low cost often means low quality, and the expansion of data also conceals the real problems of the ecosystem.
The data of the TON ecosystem has always been a black box operation. In the past, most of the VC projects could be checked on data platforms such as Dune, including how many addresses and how many transactions there were. Investors would also do some background checks. But the real data of Telegram games is not public. Only a few insiders know the approximate number of users and the actual user ratio. In Xiaoguangs view, this is the soil environment for a natural project factory.
“Do you know how many real users Notcoin has? You don’t know.” Xiaoguang said bluntly, “All the data seen by the outside world is what the project wants you to see.”
The decline in the proportion of real users has further exacerbated the false prosperity of the market. In the early days, several games, such as Hamster Kombat, were relatively good, with about 60% of them being real people. But as the ecosystem expanded, this proportion continued to decline, and later on, 40% was considered very impressive, Xiaoguang revealed to BlockBeats.
Even among this 40%, the airdrop tax of professional gamblers has not been eliminated. Their goal is not to play the game, but to get the airdrop rewards. When we count the top-up users, 90% of the addresses of the remaining real users are backed by the same group of people, who specialize in taking advantage of the airdrops and leave after playing.
This user structure directly determines the vicious cycle of Telegrams mini-game ecosystem - in the short term, data inflation conceals the real situation, allowing investors and trading platforms to continue to pay; but in the long term, the user quality of the entire ecosystem is extremely poor and the stickiness is extremely low.
In the eyes of trading platforms and investors, the monthly active data of Telegram mini-games are amazing and the traffic is huge, but the actual user retention rate and conversion rate are pitifully low. If it is just to create monthly active data and wallet address numbers for trading platforms and investors, then these low-priced traffic is enough. The person who spoke was Sleepy, the founder of Little Ghost NFT. This month, they decided to suspend the development of mini-games on Telegram.
But if you want real active users, users who are willing to play your game and use your app, you cant get them with such a low acquisition cost, Sleepy said. Now it seems that the saying still applies - you get what you pay for.
Our promotion method still relies on Twitter, social media promotion, crypto advertising channels, and mutual exchange between projects, Sleepy said. But after changing back and forth, we still cant get out of this circle.
In other words, the flow only flows from one project to another, but the water in the entire pool is always dead, with no new living water injected.
The TON ecosystem has never really broken through the barriers between Telegrams 900 million users and Web3. It seems that the TON Foundation and Telegram have not built a truly effective distribution channel that can allow Crypto applications to reach a wider range of users. Sleepy said: Maybe they are working hard, but I havent seen the results yet.
TON and Telegram have never been the same thing.
TON Foundation: Power vacuum and out-of-control direction
In the past six months, when talking about the TON Foundation with industry insiders, they always mentioned the factional struggle within the TON Foundation: the Russian team, the Taiwanese team, and the Dubai team after TON obtained the Dubai financial license. The three teams did not bring about synergy, but instead made the resource allocation of the TON ecosystem extremely unbalanced - in the TON ecosystem, whether or not to get support often depends on the relationship with the Russian team.
The TON Foundation was first founded by two core members. One is Steve Yun, the chairman of the foundation who is still active in various online and offline activities, and the other is Andrew Rogozov, who was the former CEO of VK, the predecessor of Telegram (the first social platform created by the founder of Telegram, the Russian version of Facebook), and is what some people call a core circle figure.
But since when, the power structure of the TON Foundation has undergone subtle changes at some point in time - Andrew Rogozov seems to have faded out of the core management of the foundation and founded TOP (The Open Platform). This organization is now more like a real foundation than the TON Foundation, or like Consensys in the TON ecosystem, and even dominates the construction of TONs core ecosystem.
“Frankly speaking, as a foundation, we don’t get much information from Telegram. Pavel Durov and his team don’t discuss anything with us at all. In fact, they only communicate with the wallet team because the wallet is the only real integration point. And this is not our team, it’s a completely different company called TOP.” This is what Jack Booth, marketing director of the TON Foundation, said in an interview in July 2024, which indirectly confirms the influence of TOP.
TOPs influence gradually surpassed that of the TON Foundation. It not only invested in and supported the most critical projects on TON, but also controlled the infrastructure in the ecosystem. They were responsible for running Telegrams official wallet TON Space, supporting the most active wallet in the TON ecosystem, Tonkeeper, and the DEX with the largest trading volume, Stonfi. Even the only staking agreement, Tonstakers, was supported by TOP. From the key nodes of the TON ecosystem, TOP has become the de facto core builder of TON, while the TON Foundation is more like an external propaganda agency, and its power has gradually been hollowed out.
Then on January 14, 2025, the TON Foundation announced the appointment of board member and Kingsway Capital founder Manuel Stotz as the new president, and the former president Steve Yun will continue to serve on the board.
Under such a collapse of power, it is understandable why there are rumors that the TON Foundation, which is mainly composed of a Taiwanese team, has almost no say in many matters.
The disadvantaged position of the Chinese in the TON Foundation in the allocation of ecological resources has become more obvious. The Taiwanese team has little say, and the core technical decisions are still in the hands of the Russian team, Xiaoguang pointed out. If you can have a good relationship with the Russian team, you can get the greatest support. For example, Catizen has a very good relationship with Russia, and has received investment and a lot of resources.
Xiaoguangs words were indirectly confirmed by TOPs investment list, which includes Pluto Studio, the game maker of Catizen.
Sasha Plotvinov, the founder of another popular mini-game Notcoin, said frankly that he has a very close relationship with the TON Foundation. This relationship not only gives Notcoin an advantage in the TON ecosystem, but also makes it a benchmark project in the Telegram mini-game track. What is more noteworthy is that Sasha Plotvinov is also the CEO of Open Builders, and the products under Open Builders basically overlap with TOP, and he is also a core circle figure. DOGS is also made by the Notcoin guys, and they are all controlled by the Russians themselves. Xiaoguang said, There are also many similarities in the trend.
Looking at the trend charts of the three coins from August last year to now, the trends are indeed very similar. In addition, yesterday, March 16, affected by the news that Telegram founder Pavel Durov was allowed to leave France, some tokens in the TON ecosystem rose, including: TON 24-hour increase of 20.7%, currently quoted at $3.53; NOT 24-hour increase of 18.7%, currently quoted at $0.002543; DOGS 24-hour increase of 10%, currently quoted at $0.0001475. (The price quoted is the price at the time of writing on March 17)
From top to bottom: TON, NOT, DOGS
The success of Catizen and Notcoin is not the success of the track, but the high concentration of TON core resources. The launch time of these two projects is more than half a year earlier than most small games, and they have received full support from the foundation. In other words, the prosperity of TON small games is not a real open ecosystem, but a resource allocation game.
Another fatal problem of the TON ecosystem is the confusion and sharp turns in strategic direction. In terms of resource support, the TON Foundation quickly shifted its focus from Telegram mini-games to DeFi, which directly led to a large number of mini-game developers being forced to give up.
“When we contacted the foundation, we could clearly feel that after a certain point in time, they basically stopped paying attention to all game projects and started frantically looking for DeFi projects,” Sleepy said. “This change came too suddenly, and it was a huge blow to those teams that worked hard on products. Many developers and users left because of this.”
Sleepy strongly disagrees with the change in direction made by the TON ecosystem: I think TON should not copy what other public chains are doing. If it does not rely on Telegram, TON will not be able to achieve the current number of users from the perspectives of performance, language and development difficulty. In this case, TONs subsequent development should be planned according to the attributes of the social platform, rather than copying other public chains.
Our initial judgment on TON was that its ecosystem would become part of the social platforms traffic monetization, just like WeChat mini-games or TikTok mini-games. But the TON Foundations decision completely deviated from this direction. They are making stablecoins and DeFi, which are huge mistakes, just like WeChat making a stock trading app. Would you use WeChat app to trade stocks? Sleepy said bluntly.
This strategic mistake of the TON Foundation not only caused the ecosystem to miss the correct narrative direction, but also directly triggered a crisis - in August 2024, TON founder Pavel Durov was arrested in France. This incident caused a huge impact on the TON ecosystem and plunged the foundation into chaos.
“The reason is actually because they have added a new function similar to fiat currency against stablecoin, which involves compliance and political factors, especially in the context of the Russo-Ukrainian war.” Xiaoguang revealed to BlockBeats. Prior to this, BlockBeats had also heard similar views from other sources that a function related to stablecoins had attracted regulatory attention.
TONs original ecosystem had already fallen into chaos due to strategic fluctuations and uneven power distribution, and the founders sudden incident made the ecosystem lose its last support point.
Death Accelerator: Project Factory and Trading Platform
In addition to the black box of traffic, factional struggles within the TON Foundation, and the sudden shift in resource support, project factories and trading platforms are also key factors that have accelerated the demise of the Telegram mini-game track. This ecological carnival is essentially a short-lived capital game, and real user growth has long stagnated.
In this field, the game development method is extremely industrialized. Project factories mass-produce various small games in an assembly line mode, and try and error in the market. There will always be a few projects that can run out. For example, Pluto Studio, the game maker behind Catizen, initially ran more than a dozen games, and finally found that the cat-giving-cats model was the best, so they decided to focus on it. KinKin said.
In other words, Catizens success is not accidental, but the result of intensive project experiments. Such a model is essentially high turnover, low cost, and rapid trial and error.
“The cost is actually very low,” KinKin explained. “Many game manufacturers go directly to the WeChat Mini Program Market to find verified games, get the game code, reskin the H5, and then use a Telegram IDK (Integrated Development Kit), and they can go online directly. Moreover, in the later stages, the code price of such small games is getting cheaper and cheaper.
Low cost, short cycle, and quick launch make these game projects highly speculative. More importantly, once a game model is verified by the market, it will be quickly copied and amplified, and the leader often means having pricing power. KinKin mentioned: Catizen was very strong when negotiating with the trading platform for listing, and even turned to OKX and asked for $500,000.
Once a project is launched, its bargaining power will be greatly improved. The reason why Catizen can negotiate strongly is that after the failure of multiple game projects, it has accumulated enough market experience and accurately found the user group willing to recharge. Small games like Catizen that have been verified by more than a dozen projects are indeed mature enough, and have attracted a wave of users who are really willing to recharge. KinKin said.
The success of the top projects also brings another problem - highly concentrated resources. The traffic of Hamster Kombat alone is almost enough to match that of a medium-sized trading platform.
However, the ecosystem of Telegram mini-games has never been freshly funded and lacks the entry of external incremental markets. The high-density bombing of project factories has left other mini-games with almost no room for survival, not to mention Web2 game manufacturers, who have a large number of abandoned and unlisted games in their hands, and the cost of trial and error is extremely low. In this competitive environment, the Telegram mini-game track has accelerated its decline.
Another driving factor is the game of trading platforms. The traffic brought by TON mini-games has given trading platforms a new growth point. Frequent listing of coins in a short period of time has led to the market being overdrawn prematurely. Looking back at Binances listing timeline, we can find that the interval between new projects is getting shorter and shorter:
May 16: Notcoin was listed;
84 days later: TON is launched;
13 days later: DOGS is listed;
23 days later: Catizen is listed;
13 days later: Hamster Kombat listing
“When DOGS was listed, all trading platforms were scrambling for this data, and some even offered rewards and activities like ‘Withdraw coins from my trading platform, and I will give you a certain amount of DOGS back’. Why did they know that DOGS had traffic? Because NotCoin has already proven it once. NotCoin and DOGS were made by the same team, and they just followed NotCoin’s path again with a different cover,” KinKin told BlockBeats.
The deeper problem is that the user growth rate in this cycle has lagged far behind the previous cycle. At least before Trump issued the coin, the market was very anxious about the user growth of Web3, and this anxiety was naturally transmitted to the trading platform. Although the user quality of the Telegram mini-game track is uneven, at least in the early stage, the conversion of TON traffic can still bring some data growth to the trading platform. However, this data growth is essentially unsustainable.
Ultimately, the more plates a project factory has, the faster the frequency of listings on the trading platform, and the faster the track will cool down.
After several rounds, the number of users on the trading platform gradually dried up, and the motivation to continue listing coins was lost. For latecomers, the first-mover advantage has been maximized, and the survival space for late-comers and late-comers is getting smaller and smaller. All of this makes the collapse of the Telegram mini-game ecosystem inevitable.
Is TG+ Web3 a false proposition?
Have you ever envied those projects that can be listed on Binance? In response to BlockBeats question, Sleepy answered quickly, and it was obvious that he had thought about this question a long time ago.
“It depends on how you define success. Many people think that being listed on a trading platform is some kind of industry recognition, but I don’t feel that way. For me, issuing coins is not the end of a project. If you treat it as the end, it will hurt others, yourself, the community, and investors. Because everyone can see that these coins have performed very poorly after listing, and the effect of attracting new users is far from the expectations of the trading platform.” Sleepy said.
The quick money logic of the TON ecosystem makes everything simple and crude - a new plate is replaced every three weeks, and the traders who grab quick money dominate the rhythm of the market, while the teams that really want to make games become the outliers that are eliminated. In this ecosystem, idealists ultimately have only two choices: either give up their beliefs and go with the flow, or be eliminated.
Sleepy and his team finally chose the latter. He cut 80% of the team, and several core members stopped taking salaries and allocated some resources to do Web2 design outsourcing business to maintain the survival of the team.
“In addition, we are still negotiating grants with some public chains. We have already received the first Launch Grant and will continue to do some development work to complete the remaining KPIs. We have also signed up for some hackathon competitions such as Monad Madness to see if we can achieve some results. The income from the past few months is already much more than what we earned from making games on TON,” he said self-deprecatingly.
After the collapse of the TON ecosystem, all the people who were once active in it have found their own new ways out.
KinKin has now turned to the AI Agent track, and she is very optimistic about the future development of the BASE chain. Xiaoguang, who is good at making plates, is studying memes. He knew very early that the business of Telegram mini-games is structural and has never been a long-term model. The window period is only a few months. A former member who worked hard to promote the ecology in the TON Foundation left and studied Kaia, a public chain that merged South Korea and Japan WeChat.
In an ecosystem where traffic is paramount, only traffic itself is left. The TON ecosystem has not become the future of crypto social networking, it is just another cyclical Web3 narrative, a market game that is shorter, faster, and has more extreme returns than the public chain and ZK track.
Looking back on this carnival today, for developers, the TON ecosystem was once disguised as the hope of social + Web3 to attract them into this market, but ultimately turned them into producers of black box data; for players, the airdrop created the illusion of getting rich overnight, but the result was nothing more than a $0.99 game package becoming the cyber incense money of the new era.
Looking at the entire industry, the rise and fall of Telegram games is not an independent phenomenon, it is just an extreme microcosm of the entire Web3 industry. In fact, whether it is a public chain, ZK Rollup or Layer 2, the essence of many tracks is the same, but the packaging is more grand, the cost is higher, and the cycle is longer. Most Web3 projects are essentially making a large-scale Telegram game, but some have a longer life cycle and some have a shorter life cycle.
Telegram + Web3, is it a false proposition?
Each interviewee gave their own answer, but I decided not to write it down because, dear readers, this time, I want to hear your thoughts.
