Is TON poised to be the next SOL or ETH?
Recently, there’s been a surge in narratives surrounding TON and Telegram, with many speculating that TON could be the next SOL or ETH. Blockworks Research delves into this, suggesting TON’s prospects for future growth may not live up to expectations.
Low User Stickiness on Telegram
Despite its global influence and substantial daily active users (DAU) that could potentially funnel into TON, Telegram’s user stickiness is underwhelming. By this metric, Telegram ranks among the world’s most utilized applications.
According to Telegram’s data, it stands as one of the most popular apps globally, boasting a user base of 900 million and holding the 8th spot among all apps worldwide.
[img]
However, when measured by DAU, Telegram’s stickiness appears overstated. The DAU/MAU ratio graph below indicates that while Telegram’s monthly active users (MAU) are high, its DAU figures (ranging from 55 million to 200 million) are relatively lower compared to competing apps, with a DAU/MAU ratio of only 15%.
In contrast, Facebook boasts a ratio of 69%, WeChat around 67%, Instagram at 60%, TikTok (US market only) at 49%, and Twitter (X) at 45%. This suggests that Telegram’s market penetration is lower than expected, with a user base that may be less profitable than anticipated.
PANews Note: DAU/MAU ratio measures user stickiness for online platforms or applications
[img]
Incompatibility with EVM, Limited Use of Programming Languages
The TON ecosystem faces challenges due to its lack of EVM compatibility and use of FunC (the native blockchain programming language).
TON Virtual Machine (TVM) is incompatible with Ethereum Virtual Machine (EVM) due to fundamentally different architectures (TON being asynchronous and Ethereum synchronous). Consequently, TON does not support development in Ethereum’s Solidity programming language.
According to a 2023 developer survey (with over 90,000 participants), Rust emerged as the most favored language, with over 80% of developers looking forward to using it again next year. 46.4% of developers expressed interest in using Solidity.
Currently, TON supports three programming languages: Fift, FunC, and Tact. Among these, FunC is the most widely used, resembling C language in appearance but less recognized or advocated.
Limited Reach in Terminal Market Coverage
Much of the narrative around TON’s growth revolves around Telegram becoming the next WeChat. However, WeChat’s service is confined outside the US market, solely catering to China.
In stark contrast, today’s app market is dominated by financially robust tech giants with well-established network effects. Telegram’s largest market is dispersed across the Asia-Pacific region (excluding China and Eastern Europe), adding complexity for startups utilizing Telegram for distribution.
Below are Telegram’s annual download distributions in 2022:
India: 104 million downloads
Russia: 34 million downloads
Indonesia: 27 million downloads
USA: 26 million downloads
Brazil: 21.94 million downloads
Egypt: 14.85 million downloads
Vietnam: 11.84 million downloads
Mexico: 11.61 million downloads
Ukraine: 10.76 million downloads
Turkey: 9.79 million downloads
Overestimated FDV Valuation
Despite these realities, TON still holds substantial growth potential, albeit with little margin of safety for new investors.
The following graph illustrates that among all public chains, TON’s FDV is 8.6 times its network’s annualized DEX trading volume, ranking it first and at the highest level.
[img]
Additionally, its FDV is 927 times its network’s annualized fees, ranking prominently among all public chains.
[img]
This article is a collaborative reprint from:
PANews
