pls fix: Telegram Crypto Strategy
What's next after the $1.7 billion defeat.
Disclaimer, NFA, all that legal stuff: All the information presented on this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.
Hi folks,
pls fix: is a new series in this publication. It’s currently in beta. The goal of pls fix is to cover a unique project that’s trying to fix an important problem, or to present strategies that can help an existing issue in crypto. You can read the first pls fix issue on Automated Market Maker, here. Please comment below with ideas or topics that you would like us to cover.
Telegram Crypto Strategy
There’s no other communication platform more poised to capitalize on the success of crypto as much as Telegram. The messaging app has been a critical infrastructure for crypto market participants for years. Crypto projects and investors often congregate in private Telegram groups and channels to discuss business and conduct transactions. If you ask around, you would know that 8 figures (even 9 figures) OTC deals are often being done via Telegram.
Although Telegram has tried to launch its own blockchain before, it wasn’t successful after a lengthy battle with the SEC. Unlike Facebook, Telegram failed not because it might impose a challenge against the existing FIAT money and banking infrastructure, but because it raised money via ICO for its supposed TON blockchain native crypto asset, called GRAMS. Let’s put aside whether or not you agree with the SEC’s decision, and reflect on the following:
“Sadly, the US judge is right about one thing: we, the people outside the US, can vote for our presidents and elect our parliaments, but we are still dependent on the United States when it comes to finance and technology,” — Pavel Durov, Telegram Founder & CEO
Telegram, TON Blockchain, and Crypto in 2022
In 2022 one thing remains the same. Telegram is still a dominant platform for the crypto space and the TON blockchain is now an open-source project maintained by a group of developers. It hasn’t achieved as much success as other up-and-coming blockchains that gained notoriety in 2021 such as Solana and Avalanche, but it hasn’t stopped trying. In April 2022, TON users donated 527 million worth of TON tokens, worth approximately $1 billion at the time, to the TON foundation to advance the TON blockchain ecosystem. Telegram has also integrated the TON token within its platform, allowing users to transact with one another with TON.
Frankly, it is encouraging to see how there are still contributors that maintain the TON blockchain. Telegram’s founder Paul Durov himself hasn’t fully “broken up” with TON although he made sure to always state that Telegram the company is not directly involved with the project. Durov recently applauded the TON blockchain effort in auctioning the .ton domain name (similar to Ethereum Name Service) — teasing the following:
All that said, Telegram has not really done anything significant with crypto since its battle with the SEC, perhaps out of fear that any initiative will be scrutinized. However, enough time has passed and bigger companies have since started their crypto initiatives, reducing Telegram’s risk if it decides to ever go back to crypto — which it should.
Here’s why: Founder Paul Durov has been bankrolling Telegram’s operations with his own money (because he’s a decabillionaire), but it’s still not profitable.
Telegram launched its premium service on June 2022, hoping to monetize its 700 million users.
Telegram can’t compete directly with WhatsApp and WeChat.
It should play on its strength: privacy and community.
What to Do
Here’s how: Telegram should not start with anything token-related, but should closely integrate crypto-related services in its effort to become profitable.
Although there is no official number, numerous sources led us to extrapolate that the number of crypto users on Telegram is at least in the tens of millions.
There are 320 million crypto users worldwide and there are 700 million telegram users, it’s not a ludicrous estimation to think that there are 14 million (2% of all users) crypto users on Telegram.
Here’s what: Telegram can offer the following services to its crypto users, facilitating their activities and keeping them in Telegram:
Integrate Crypto Wallet & NFT Profile Picture
Similar to what Discord almost did, Telegram should integrate Ethereum and have its own crypto wallet within the app. Users won’t need to leave Telegram to transact with another.
Telegram can also turn its handle (@username) into an NFT. This opens up other possibilities that require a unique identity and even indirectly compete with Ethereum Name Service.
In-House OTC Market
Set up a smart contract escrow to facilitate OTC deals, removing the need for trust or third-party middlemen, and making Telegram the go-to place for peer-to-peer crypto OTC deals.
This won’t compete with institutional OTC desks but can become a significant revenue source for Telegram.
Numbers: Genesis reports $17.2 billion or spot OTC volume just in Q2 2022. Annualized, this is $68.8 billion, not including other notable OTC desks out there. If telegram can facilitate 10% or approximately $7 billion in OTC volume/year at a 1% commission rate = $70M in revenue.
Integrate DEXs, NFT Marketplaces, and dApps Browser
After having its own crypto wallet, Telegram should make it super easy for crypto users to do everything that they need to do, including accessing decentralized applications.
To top it off, Telegram should aggregate DEXs and NFT Marketplaces to sell convenience, aka Laziness-as-a-Service, the business model that made MetaMask $200M+ in one year. If users don’t need to leave the app to trade, there will be an audience that’s willing to pay the extra bips.
Numbers: MetaMask has 21 million users and generates $200M in swaps revenue per year. Even in the most conservative scenario, Telegram should be able to monetize $20M in revenue (10% of MetaMask). If we include NFT marketplaces, this number will be significantly higher.
Here’s a back-of-the-envelope calculation:
Telegram is the most essential platform for the crypto community besides Twitter and Discord. It should start monetizing by providing crypto-related services to lock its crypto users within the platform as much as possible. This can be done by adding crypto features and vertically integrating across a different suite of products. Telegram already has the crypto userbase and the trust of the community, it simply needs to monetize.
Great analysis and insight!