TON of Gamers
Paul Veradittakit
Investor at Pantera Capital—Solving Problems with a Value-Add Perspective [ODA5]
What is TON?
TON (The Open Network) is a blockchain with the core Toncoin cryptocurrency that can handle >100,000 transactions per second and is directly integrated into Telegram, a messaging platform.
TON allows developers to create mini-apps and games that run directly within Telegram. These apps are accessible through links or bots in-app, allowing a single click to open an app rather than having to download software. More than 500 million of the 950 million monthly Telegram users interact with mini apps every month. For example, the TON wallet is also integrated as one of these mini-apps, allowing a seamless crypto wallet onboarding experience.
Gaming on TON
Gaming is often a push and pull between game developers and platforms. Developers want to use an easily accessible, easily distributable, and cheap platform, while platforms try to create moats around their ecosystem so that users and developers stay within their gated community, all the while charging exorbitant fees to all. The Apple appstore, for example, charges a 30% fee for all revenues earned.
However, with the TON blockchain, the incentives of game development can be reversed, since the driver of mutual success between the platform and its games is through the increased use of cryptocurrencies like Toncoin. If more people play games that integrate TON (like through a new token, NFT’s, in-app purchases, airdrops), more players may purchase Toncoin, which may increase its price, benefiting both developers and the platform itself. The incentive is to therefore share the game as broadly as possible by making the TON platform and games as inclusive as possible.
There are no fees to build games on TON, there is active development support, and games are incentivized to help each other grow. In effect, there is no barrier to begin creating a game that is one click away from the 950 million monthly active users of Telegram.
Current Games on TON
Many of the current popular games on TON have a "tap-to-earn" model, where players engage with simple, addictive gameplay for rewards such as token airdrops or NFTs. Many are marketed to play for the purpose of receiving a token airdrop. Some of the most popular games of this generation are Catizen, Notcoin, and Hamster Kombat.
These games are not inherently innovative, but they have exploded in popularity, similar to web2 equivalents. One of the first examples of these games was Cookie Clicker, a web2 game where users tap on a cookie, which peaked at 1.5 million players in 2013. Cats & Soup, a game launched in 2022 which lets users collect cute cats by clicking on them, surpassed 50 million global downloads last year and made $2.2M in Q4 2023. Recently, Farm Merge Valley, a game where users combine farm animals to make bigger ones, blew up in relevance when it launched on Discord’s new embedded game platform.
These games rise and fall quickly because of their connection to fads. Many only maintain relevance for up to 6 months, after which their “cool” or “cute” factor fades. TON is a great place to launch these games because of its easy access to Telegram’s 950 million monthly users, and because games can incentivize continued usage through tokens. Catizen, for example, has a $CATI token with a current FDV of >500M and has earmarked 34% of all $CATI towards airdrops to users. The first 15% were distributed to early participants in September 2024 (150 million tokens valued at ~$82,290,000 USD) with the remaining 19% going towards future airdrops for users that play the game. Catizen Roadmap Presentation
Catizen’s integration of TON have been very successful; the game is shared in group chats on Telegram, users are incentivized to continue playing the game to continue earning the airdrop, and the team behind Catizen has been able to pocket 20% of the total token supply, on top of in-game purchases and advertisements. In fact, the lifetime value of an average paying user is around $35 USD, on par with successful web2 game standards.
Catizen is also exploring new ways to grow, like through staking of $CATI, yield farming, airdropping partnered projects, and building a launchpad for games to join its ecosystem.
Using its popularity and existing user base, Catizen is able to promote partnered games or advertise other games in its own game, which also promotes its own token.
Catizen has its own Game Center, which allows games to launch inside of Catizen’s own platform in return for a partnership. For those inside the game center, they offer their own SDK, using their experience to simplify the complex, multi-language TON stack so that it is tailored to game developers.
Next Generation of Games
Tap to earn games have been the first games to launch on TON and have had to experiment. Now, developers on TON have more experience, better infrastructure, and better understanding of optimal incentive mechanisms. But a big problem with these games is that they fall in relevance quickly. For example, Hamster Kombat lost 259 million players or 86% of its user base in less than 3 months from August - November of this year. Therefore, the next generation of games that are being funded and built on TON are social, midcore, and DeFi games.
Social Games
Social games are those that integrate sharability into their games as a core mechanic, fully taking advantage of Telegram as the base messaging platform. This could include games that require sharing to progress. For example, Candy Crush Saga was hugely successful as it was one of the first games to integrate leaderboards and sharing into the core game experience. This feature can be integrated into other types of games.
Midcore Games
Midcore games have more complex gameplay mechanics, appealing to players who want a richer gaming experience. These games are meant to be played for longer periods of time, are targeted to demographics or geographies, and have more flexible monetization schemes.
A great example of a game currently building towards Midcore after being initially a tap-to-earn game is Gatto. Gatto initially started as a pet collecting game but has started a PVE gamemode, integrating replayable features into the game.
Delabs is a gaming studio developing specifically publishing mid-core games on Telegram and TON. The Telegram Gaming Accelerator (by Helika and Notcoin) which funds and advises Telegram games, have also prioritised midcore games.
Recommended by LinkedIn
DeFi Games
DeFi is the grease that often makes or breaks blockchains. As DeFi protocols naturally grow on top of TON, some game studios may gamify the process of DeFi, whether it be in liquidity providing, swapping, yield-farming, or more.
Call to Action
The best time to build a game on TON is now. The hurdles that many initial TON games faced are no longer there; there is much better documentation and technical support, airdrop program design has been refined, more data is available to make decisions, and there are many more investors and incubators available to support hungry game developers. They have much better programs to teach and integrate web2 game developers into TON.
For example, games now understand that they should focus on the metrics of retention and revenue per user, and that different geographies use Telegram in vastly different ways. Interestingly, Indian users use group chats to a large extent because Whatsapp has 1,024 person group chat limits, while Telegram does not have limits.
To get started building your next TON game studio, check out the Resources header at the bottom of the article.
Pantera’s TON Commitment:
Pantera made its largest ever investment in TON back in May. Pantera actively invests in the Telegram ecosystem. The following is a list of Pantera portfolio companies in the TON gaming space:
Resources:
Official Support:
Research:
Accelerators/Investors:
- Paul Veradittakit
Web 3.0 | Fintech | Crypto | Accounting & Finance | CFA Aspirant | Entrepreneur | SIBA (AACSB)
1wLet’s chat. I do have some interesting TG mini app projects.