Crypto Evolution Numéro 05 | OKX Ventures LongHash ANAGRAM : L'avenir des pistes sociales et grand public du Web3

In the context of soaring chaos values, it is very important to perceive the periodicity more clearly and discover the narrative trends of the future. As innovative narrative catchers, investment institutions have always been relatively cutting-edge. In view of this, OKX specially planned the Crypto Evolution column, inviting mainstream crypto investment institutions around the world to systematically output topics such as the periodicity of the current market, the direction of the new round of narratives, and the subdivision of popular tracks, in order to stimulate discussion.

The following is the fifth issue, in which OKX Ventures, LongHash Ventures and ANAGRAM jointly discuss the future development of Web3 social and consumer tracks. I hope their insights and thoughts will inspire you.

À propos d'OKX Ventures

OKX Ventures est la branche d'investissement d'OKX, une plateforme de trading d'actifs cryptographiques de premier plan et une société de technologie Web3, avec un engagement de capital initial de 100 millions de dollars américains. Elle se concentre sur l'exploration des meilleurs projets de blockchain à l'échelle mondiale, le soutien à l'innovation technologique de pointe en matière de blockchain, la promotion du développement sain de l'industrie mondiale de la blockchain et l'investissement dans la valeur structurelle à long terme. Grâce à son engagement envers les entrepreneurs qui soutiennent le développement de l'industrie de la blockchain, OKX Ventures aide à créer des entreprises innovantes et apporte des ressources mondiales et une expérience historique aux projets de blockchain.

About LongHash Ventures

LongHash Ventures is a crypto-native venture capital firm based in Singapore and Silicon Valley since 2017. We work closely with founders to build their Web3 models and tap into Asia’s huge potential. We invest in and work alongside visionary founders who are pioneering the next phase of the open economy.

About ANAGRAM

We are an organization focused on technology innovation. We are committed to supporting innovations that bring ownership economics to the masses through human and financial capital.

1. What are the differences between this round of SocialFi development and previous ones?

OKX Ventures Researcher: This round of SocialFi focuses on Memecoin transactions and casual game development based on high-distribution protocols (such as TON), and pays more attention to consumer and creator tools than the previous round of NFT cycles. Many big brands (such as LVMH, Nike, etc.) tried to test related narratives in the crypto field but ultimately failed to adapt to the hyper-financial culture of the crypto community. In the success of Memecoin transactions and casino-type dApps like Polymarket, we see that these crypto dApps that cater to hyper-financial applications can indeed achieve positive results. Other trends include:

1. From content monetization to social monetization

Early social projects, such as Steemit and Mirror, relied on content production for incentives, but the quality was difficult to control, resulting in the proliferation of low-quality content. In this round, friend.tech has undeniably brought a new experiment – monetizing social relationships, each user becoming a Key asset, and building a new form of asset through social identity, making everyone a potential investment target. Pump.fun has inherited Friend.techs liquidity innovation ideas, further promoted the narrative of the low-liquidity AMM model, and effectively opened up the liquidity conversion path of on-chain assets between DEX and CEX. Compared with Friend.tech, Pump.fun is more focused on combining liquidity models with social interactions, deeply binding asset liquidity with social activities. UXLINKs innovative model is through its Link to Earn model – users contribute their own social network data to get rewards, thereby solving the shortcomings of relying solely on content production, emphasizing the value conversion of social relationships, and avoiding the drawbacks of short-term financial incentives.

2. The trade-off between decentralization and financialization

The project is more flexible in terms of decentralization. Social platforms like Farcaster emphasize the digital ownership and content control of users over social relationships, but their core is not immediate and complete decentralization. Their highlight is to allow users to control their own social data and reserve experimental space for future on-chain operations. Their innovation emphasizes community-driven and community culture. TON+Telegram focuses on the more pragmatic Web2.5, providing users with a convenient entry through embedded programs such as mini-games, integrating financial operations into daily social interactions, and enhancing the financial attributes of social identities; gradually introducing on-chain activities, reducing the transition cost to Web3 while using the original platform to enhance user trust and experience.

In addition to this, there is also a trend of intellectual property (IP) moving onto the chain. The increasing amount of UGC and AI-generated content is the main force behind this.

LongHash Ventures ( Emma Cui) : In this cycle, the infrastructure is ready to support mass adoption.

First, scaling: Rollups, Alt L1s, and data availability layers reduce the cost of on-chain activities to a few cents or less. More innovative rollups (like zkSync) use state diffing to further optimize it by aggregating data costs.

Second, interoperability: Chain abstraction and intent-based protocols enable on-chain assets and credentials to be easily recognized or used on any chain. For example, to send a tip on SocialFi, Particle Network can seamlessly aggregate assets across multiple chains and send them out in one step.

Third, account user experience: Account abstraction, MPC, passwords, and social login allow users to interact with web3 without managing private keys and gas fees. Today, the Safe protocol has protected billions of assets, with a peak of $120 billion more than Binance and Robinhood, comparable to real-world banks. With account abstraction, users can log in to the SocialFi application with a session key and authorize multiple on-chain interactions without having to log in to their wallet every time.

ANAGRAM ( David Shuttleworth ): The SocialFi space has changed significantly from the last cycle, especially in the number of original experiments and new mechanism designs. In the last cycle, builders usually focused on replacing existing legacy systems, such as the launch of Lens, which was a decentralized version of X, and Farcaster followed a similar path. However, in this cycle, many projects (such as Lens and Farcaster) not only stop at replacing existing structures, but also begin to implement more attractive features, such as Farcasters Frames.

This is largely due to advances in the underlying blockchain technology. Lens leveraged ZKsync to launch the Lens Network, increasing its ability to change the way social networks operate. Rollups on Ethereum enable the network and the protocols built on it to scale more efficiently and handle millions of transactions. This technology was barely available in the last cycle and is now fully explored. In addition, features such as Farcaster Frames allow users to seamlessly interact with multiple applications running on the Farcaster source and let developers distribute applications in a one-click manner. This innovation and user experience did not exist in the last cycle.

To expand the scope of applications, Solana recently launched Actions and Blinks, connecting Solana to the entire Internet, allowing users to perform a variety of operations, such as swaps and payments, on any website or application (such as X, Reddit). These new primitives convert on-chain operations into shareable links, making the design space more open than the previous cycle.

Another interesting area of innovation is the fusion of social and speculation. Friend.tech and Fantasy.top are two major examples that combine social elements with user interaction where users speculate on various parameters, such as the popularity of posts on X. Friend.tech allows users to monetize the community and trade “keys” that unlock different features (such as exclusive in-app chat rooms), while Fantasy.top allows users to collect and trade NFTs related to certain crypto characters on X. While many well-known projects are struggling to maintain user activity, these new experiments that were not seen in the last cycle provide useful guidance for future developments.

2. What is the current development status of the Cosumer Apps track? Where is the integration point with social media?

OKX Ventures Researcher: The market is transitioning from the traditional model centered on trust to the smart contract model centered on contract execution, and the application track is no longer just a playground for giant whales, but is leaning towards a wider user group. Users not only want platforms that make quick money, but also expect consumer applications that meet daily needs. The complex blockchain operations and difficult user interfaces in the past are being simplified, and developers realize that users do not need to understand blockchain, just a smooth user experience.

Progressive Web Applications (PWA) are becoming a new way to distribute crypto applications, providing a smooth experience similar to Web2 and avoiding the 30% handling fee of traditional app stores. In terms of payment, the crypto payment experience is gradually becoming mainstream, such as the cooperation between Venmo and PayPal and ENS, and EtherFi launching its own credit card company that is compatible with Apple Pay. The launch of Solanas Saga and then Seeker marks the development of Web3 native devices. Through convenient functions such as double-click crypto payment and built-in seed library, it has become a mobile wallet, and built-in distribution further enhances the user experience. The combination of hardware, payment and distribution solves the complexity of operation, accelerates user participation in the network, and the transition of crypto applications to the mainstream market.

Whether it is an entertainment or financial application, it will eventually enter the track of financialization. Once ownership (such as NFT or tokens) is introduced, the financial attributes of the application will immediately become apparent. Entertainment financial applications such as mini-games and memecoin attract large-scale participation through speculation, while serious DeFi applications focusing on investment and financial management focus on asset appreciation and value preservation.

The integration of Consumer and Social is not only about “buying and selling crypto assets on social platforms”. Many crypto applications are taking social as their core. Examples like Polymarket and Pump.fun show that the power of community and social interaction cannot be ignored. Social elements can bind users firmly to the platform because people naturally like to interact and share and express their thoughts on specific events.

Imagine that memecoin is no longer just speculation, it can be the news itself, a microcosm of social elements and social dynamics. People bet on or interact with memes around specific events or topics, which is also crucial in DeFi. In the past, many DeFi applications relied on the trading volume of whale users to attract users, but now, applications with social functions are beginning to rely on interactions between users and the power of the community to drive liquidity and participation.

Successful applications must incorporate social elements, not just social media platforms, but also capture interactions between users through the front end to build network effects. The reason is simple: you need users to enter your front end to bring benefits. Without the front end, Uniswaps competitors can also directly use their protocols to snatch users from it. Users familiarity, interaction habits and dependence are the moats of applications. The user network on the front end is the core that drives everything – just as financial liquidity is crucial to launching protocols, user liquidity is equally important for launching applications.

Crypto composability means that smart contracts can be called from anywhere, making the protocol scalable and interoperable. This flexibility allows embedded applications to interact directly with on-chain functions, imagine prediction markets appearing directly where people talk about the news; SocialFi applets allow users to stake tokens, follow transactions, or buy fan tokens; and governance applets allow members to conceive, collaborate, and vote – all of which are inseparable from the stand-in front end that hosts them. On-chain financial transactions can be integrated into familiar social structures to become fun and interactive – sending messages to other traders on DEX, competing with friends portfolios, and so on.

There are two main adoption paths for consumer applications: one is to optimize existing products, and the other is to create new demand. The first is to make the product better than other options on the market by constantly polishing the user experience. This involves using the underlying technology to find entry points for marginal improvements, while using tokens to change community behavior and experience; the latter focuses on discovering unmet user needs and opening up new market space. This is exactly the direction chosen by many Web2 products, such as Twitter, which redéfined the social media field from the beginning. Although the latter has higher Alpha potential, the former is equally essential. If users today need to go through a long wait and cumbersome process to use an App, then such soil cannot give birth to applications with new needs like Twitter.

On the contrary, mortgage lending products can develop based on existing demand. Even if there are operational complexities, people with demand will take the initiative to overcome them. For applications with innovative needs, users will not fill these gaps on their own. Therefore, investing all energy in UI/UX too early may not be the best choice; as long as you can find the target users, you will not have trouble finding the right suppliers or partners (such as underwriters) to optimize product services.

LongHash Ventures ( Emma Cui) : Consumer applications as B2C use cases can be defined as any application developed by end users. From this perspective, social applications can also be considered consumer applications. By improving the user experience, innovation in social applications has lowered the threshold for creating seamless consumer applications. Outside the Web3 ecosystem, Telegram has also become an important distribution channel. With 950 million users, Telegram is the most popular instant messaging application in the crypto ecosystem, bypassing the approval process and fees of the Androïde and Apple app stores.

Both consumption and social have a strong motivation to attract new users, create a seamless user experience in the product, and accumulate value through real consumer consumption behavior. For example, Catizen has 34 million users and revenue of more than 25 million US dollars. Leading game ecosystems such as Ronin and YGG also have millions of users actively spending time and money on Web3.

TON also demonstrates how blockchain can provide new opportunities for monetization, participation, and innovation by supporting small and medium-sized Web2 game developers. By introducing a tokenized economy, a reward system is created for content creation and consumption, promoting participation through digital ownership. The main challenge in integrating Web3 consumer products with Web2 platforms such as social media and mini-games is to simplify the Web3 experience for Web2 users. While Web2 excels in user-friendly interfaces, the complexity of Web3 (such as using wallets and tokens) needs to be minimized to encourage adoption. Another potential lies in decentralized governance models, where platforms and games develop through community input, promoting user loyalty and democratized ownership.

ANAGRAM ( David Shuttleworth ): Consumer and social applications are becoming increasingly powerful and starting to provide real utility to users. These applications come in many forms, including prediction markets (such as Polymarket), token launchers (such as Pump.fun), and more social applications (such as Farcaster and Lens). If executed well, these applications can become powerful drivers of mass adoption and revenue.

Over the past year, consumer applications have generated increasing fees for the protocols themselves and their underlying networks, while also becoming a “beacon” for attracting new users, increasing liquidity, and driving demand for block space. They have had a significant impact on the DeFi sector of the network. For example, Pump.fun has generated nearly $100 million in fees since March, becoming one of the most profitable protocols in the entire space. More notable is its positive impact on other DeFi applications on Solana, such as Raydium, which reached an all-time high in activity in July, the most popular month of Pump.fun, with a monthly trading volume of $28.7 billion. Pump.fun makes it easy and fun to issue tokens and build memes around them, which translates into actual demand for tokens. Although this raises questions about the ecosystem’s “killing the goose that lays the golden eggs”, it provides an effective short-term experiment to study how consumer and social adoption affects user behavior and network outcomes. In fact, the ephemeral nature of applications itself has become a new trend in this cycle.

Ultimately, the main reasons for success are improvements in network expansion, improved user experience, and the popularity of stablecoins. In terms of infrastructure, blockchain costs have been significantly reduced and performance has continued to improve; and with the emergence of Solanas Firedancer, MegaETH and Monad, ultra-high-performance chains continue to improve. In terms of user experience, years of infrastructure construction have made interaction with different chains smoother than ever before. With just a few clicks, you can easily access applications on any chain, usually without leaving your wallet. The in-wallet experience has also been significantly improved – the transformation from custody and trading to super applications has unlocked a range of innovations: from simple messaging and content distribution (for example, for holding concert tickets) to DeFi applications built on top of them. Although the overall user experience is not yet perfect, it has been greatly improved compared to a few years ago.

At the same time, fiat-backed stablecoins are ubiquitous, giving users access to more options without having to bridge or leave the main chain. In addition, applications from the PayFi space allow users to easily deposit fiat, make instant cross-border payments, and perform a variety of daily on-chain activities. All of this achieves the effect of where the user is, the service is there, seamlessly integrating the core elements needed to build a complete application into the background. Users can click Solana Blink on X or Frame on Warpcast to connect to the application instantly. This is the starting point for further integration of consumption and social, and it is only the beginning. The trend of integrating DeFi functions into consumer applications is also developing. For example, prediction market positions can be tokenized, allowing users to not only trade the direction of their bets, but also earn returns while holding their bets.

As transaction costs gradually decrease and speed increases, payment functions will become closer to the Web2 experience (i.e. instant and convenient), which also provides greater capacity and design freedom for the construction of use cases for consumer and social applications. The power of these Web3 applications lies in that they not only enable new ways of interaction and collaboration, but also lead to the establishment of new economic and social norms.

3. Where will the future explosion point of Web3 social networking and consumption be?

OKX Ventures Researcher: Social applications are essentially a subcategory of consumer applications. If the consumer direction is to handle high transaction volumes through applications such as Pump.fun, these ecosystems will continue to expand. At present, they may lack large DeFi components (such as leveraged trading, short selling, etc.), but they will be gradually developed. For the casual game community, the key is to find the most sustainable business model and think about whether issuing tokens is the right choice.

In order to remain competitive, many on-chain applications have pushed down protocol fees to zero, which has attracted short-term users and speculators, forcing developers to rely on increasing user activity and liquidity to increase revenue rather than creating real long-term value, and thus failing to develop into large-scale consumer applications. Developing for whales is much easier than facing the needs of the general public. Just go full on-chain and take advantage of various opportunities such as MEV to easily maximize profits. Most applications fail off-chain, such as poor experience in daily behaviors such as deposit and withdrawal channels and identity verification.

Therefore, the existing on-chain mechanism alone cannot really solve the user retention problem. To break through this bottleneck, Web3 social networks need to transform from financial-driven to a multi-functional user experience platform with social consensus as the core – seamlessly navigate multiple fields such as NFT markets, DEX, games and governance forums from a unified portal, and closely integrate with financial behavior through wallets.

The application explosion point comes from the combination of social consensus, speculation and tribal behavior. Because blockchain naturally has a decentralized consensus mechanism, it helps users reach coordination and consensus around the events, assets and dynamics they care about, and thus trust the credibility of the system.

Currently, many applications rely on short-term speculation such as NFT investment and liquidity mining, which leads to users focusing on quick in and quick out operations. As the market matures, applications need to attract and retain users through content filtering, intelligent transaction processing, and community management.

Optimizing user data management and quality filtering is key to ensuring that the user experience is not disrupted by financialization, which can enhance the naturalness and friendliness of on-chain interactions and reduce reliance on speculative capital. Lasting communities, brand loyalty and a sense of belonging, as well as strong and sticky user communities, will determine the success of applications and protocols. For example, Monad cultivates users to become community guardians, encourages them to participate in tribal behavior and gives them incentives and expectations. This community-driven model will become a long-term growth point.

Social networks in the future also need to separate the social data layer from the financial layer. Users do not want complex financial transactions to accompany every interaction. The platform should manage these interactions intelligently, hide financial transactions in the background, and then provide users with a more valuable interactive experience through AI-driven intelligent filtering and quality standards.

Key growth areas will also focus on how to enhance user trust and experience through decentralized identity authentication, proof of activity, and privacy protection. The platform can effectively manage and reward users who truly contribute to the community, not just speculators. With the development of ZK technology and expansion solutions, users will enjoy a more efficient and secure decentralized interactive network, especially in terms of private messaging and social privacy protection.

LongHash Ventures ( Emma Cui) : The reason why blockchain-driven SocialFi and consumer applications may become the core driving force of the crypto economy is that they provide new monetization opportunities, more user ownership, and a path to widespread adoption of crypto technology by integrating blockchain into user-familiar scenarios. The shift in ownership and financial incentives will encourage more daily participation in consumer applications to expand the crypto economy. New financial opportunities are created for users by combining DeFi with social and consumer applications. Features such as staking or decentralized lending can be integrated into daily digital activities, blurring the lines between financial and social products and further expanding the crypto space. In addition to simplifying complexities such as wallet management and security, regulatory transparency and user trust are also critical to the long-term success of applications.

We are seeing more and more applications designed to drive new users, new assets, and new on-chain activity. Breakthrough applications are often difficult to fit into existing categories, and the ones that stand out are likely to be those that can take advantage of all the new infrastructure, the excitement in emerging verticals, and the speculative potential of cryptocurrencies.

Telegram-based AI-driven conversations driving consumer behavior and gaming experience is a highlight. Telegram provides a seamless user experience, AI agent companions create personalized, on-demand experiences, and consumer purchases, such as collectibles and in-game assets, become a natural spending channel that is easy to implement on-chain and in AI agents. For example, Wayfinder, Virtuals Protocol, and Theoriq are all AI agent protocols that allow autonomous agents to execute transactions on-chain. In particular, Virtuals launched an AI idol that can interact with users on Telegram in a personalized manner, and users can also interact after watching its Twitch live broadcast.

ANAGRAM ( David Shuttleworth ): The next wave of adoption will be driven primarily by stablecoins, RWAs, and payment innovations, along with advances in cryptoeconomic security, at least in the near term. As the Fed cuts rates and global interest rates retreat, users will seek new opportunities outside of traditional finance. Stablecoins not only provide users with access to risk-free interest rates, but also accumulate value through protocol fees, unlocking new monetary layers for developers. Stablecoins that leverage otherwise idle capital (such as Bitcoin reserve backing) also create unique value space. Similarly, the creation of RWAs allows users to access a diverse range of financial instruments without permission, and developers can also design infrastructure using underlying RWAs, such as stablecoins backed by BlackRocks BUIDL.

Payments are evolving beyond just cross-border transfers. More powerful developers are creating applications with on-chain autonomous banking capabilities, including traditional savings accounts, ZK payments, and DeFi primitives such as on-chain lending, staking, and market making. Users can also easily make P2P payments in their non-custodial wallets. In addition, the emergence of Eigenlayer AVS will bring real demand to the re-staking market, and AVS allows applications to build new core functions without redeployment. As protocols begin to explore different possibilities, the demand for re-staking may increase significantly. As more AVS with substantive functions are launched, the need for shared security will drive re-staking returns.

Users have more and more choices to conduct on-chain financial activities such as lending, staking, re-staking and leverage. This is a significant improvement compared to two years ago. Currently, major DEXs such as Uniswap, Pancakeswap and Orca have a combined monthly trading volume of more than $135 billion. Perpetual contract platforms such as Hyperliquid and dYdX have achieved a daily trading volume of $12 billion. Liquidity staking protocols such as Lido have generated more than $511 million in cumulative fees, re-staking protocols such as EigenLayer manage more than $12 billion in assets, and lending protocols such as Aave manage $19 billion. In addition, stablecoin issuers such as Tether and Circle have exceeded $500 million in monthly revenue.

However, apart from DeFi, the activities that ordinary users can participate in are relatively limited, and most behaviors that are not directly related to the above DeFi activities are usually related to financial speculation. Social and consumer applications bring the hope of introducing the next wave of users to the crypto field.

Although DeFi applications will continue to develop, future iterations may face diminishing returns and the extent of improvement will gradually shrink. In the social and consumer fields, there is still a broad space for innovation, and even small improvements can produce significant results, so the difference between marginal improvements and real opportunities to promote change is emerging.

Currently, many products are still in the experimental stage and require enterprise-level infrastructure to work properly. Users also need simple and familiar ways to access these applications. As technology develops and barriers to entry are abstracted, social and consumer applications have the opportunity to introduce new types of users who are not purely seeking speculative or monetary gains.

PayFi and the payments space could be one of the initial breakthroughs for cross-chain applications, making on-chain fiat smooth, cross-border payments almost instantaneous and free, and enabling real-world integrations like linking MetaMask to a Mastercard debit card to spend crypto directly from a self-hosted wallet. The payments space will be one of the most practical applications. It is equally important to create applications that deliver a traditional banking experience on-chain. These autonomous banks would allow users to have traditional savings accounts, borrow funds in DeFi, and participate in other on-chain activities like staking — without the need for intermediaries.

The popularity of stablecoins and the progress of their underlying utility are also worth watching. The continuous evolution of the digital dollar has made it more than just a store of value or a medium of exchange. The currency can serve as an infrastructure layer for developers to build more applications on top. New protocols are making stablecoins more standardized and interoperable, providing new ways to accrue value, such as sharing protocol fees with users, making the added utility of holding stablecoins more attractive than ever.

Verifiable computing is another area that could have a profound impact. It allows developers to move various things from on-chain to off-chain and publicly verify them on-chain without having to re-execute the entire process. This optimizes performance, reduces the cost of product on-chain logic, and reduces attack surfaces and centralized dependencies. Potential uses include verifiable oracles – expanding the capacity of traditional oracle architectures by updating prices and inputs off-chain and publishing updated proofs on-chain; cross-chain proof systems – providing verifiable proof of activity on one chain (such as Ethereum) and triggering corresponding actions on another chain (such as Solana) (such as rebalancing liquidity pools after cross-chain swaps). Verifiable computing has many interesting applications in game theory and mechanism design, such as allowing users to hide orders in dark pools to avoid slippage or using hide-reveal functions to hide specific content while verifying the value of a basket of goods at the same time.

The gaming sector is also a potential breakthrough point. It doesn’t have to be AAA or cutting-edge first-person shooters, it can be 8-bit or 16-bit low-resolution games that focus on deep storytelling, engaging character development, and interesting gameplay mechanics. Given the permissionless nature of blockchain and the increasing competition in the traditional gaming market, stronger developers may turn to new distribution methods and deviate from the current gaming industry track.

Finally, there is AVS. EigenLayer is expected to attract the vast majority of ETH (whether native or staked), and users hope to gain additional returns from it. The protocol has achieved deposits of more than 4.5 million ETH (about 12 billion US dollars). Its strength lies in expanding the design space by leveraging the economic security of re-staking. As the first AVS to be implemented, EigenDA has provided cost-effective and high-throughput data availability for rollups.

More and more vertical AVS are emerging, including network expansion (such as ZK light clients and prover networks), coordination layers (such as DePIN infrastructure) to coordinate computing power exchanges, and more cutting-edge areas such as MEV management. As these services continue to create powerful use cases and drive the growth of their usage protocols, the corresponding demand for AVS will also increase. Any protocol can create a system of re-staking and shared economic security, but ultimately, the services built on it are what define the protocol and drive the re-staking economy.

4. How do you view the popularity of the TON ecosystem and the challenges it faces?

OKX Ventures Researcher: The short-term nature of hyper-casual games makes TON and Telegram an effective way for users to get in touch with cryptocurrencies. In the era of the attention economy, a healthy ecosystem, a solid user base, and a smooth entry experience are exactly what developers expect. Users do not need to switch applications or master complex blockchain knowledge, and encryption technology becomes unnoticeable, which lowers the application threshold.

The launch of the TON Space self-hosted wallet has broken the barriers to liquidity and use of funds. The native integration of stablecoins has enabled its DEX liquidity to reach 600 million USDT in a short period of time. In addition, TONs off-chain expansion and lightning network design support native high-frequency and low-cost micro-transactions and off-chain payment channels, solving the scalability problem from the bottom up. Long before the TON ecosystem became popular, many trading robots such as UniBot and Banana Gun, which rely on Telegram channels, have appeared to meet users needs for fast transactions on the chain, and can be operated directly with a custodial wallet. They meet the needs of Web3 users. If the project can find a product that meets the needs of Web2 users, then the role of the wallet is traffic and payment channels, and even complex smart contracts are not needed, making business simpler.

Although TON has brought new opportunities and profit methods to developers and entrepreneurs – relying on Telegrams mature user base and token use case environment to promote the rapid landing and commercialization of social products, most applications, especially games and social applets, are still focused on meme culture and entertainment speculation. Most of them are simply small games transplanted from platforms such as WeChat. The core appeal does not fully utilize the unique advantages of cryptocurrency or the secure and transparent financial data management capabilities of blockchain like other applications such as financial services or payments, but it also shows that TON is accelerating iteration on a verified path. Moreover, the opportunities for combining advertising monetization and in-app purchases have not been fully explored. By opening up its own infrastructure and providing entrepreneurs with opportunities similar to small shops, it can still provide traffic and in-app purchase revenue support for new products. Taking the payment scenario as an example, TON can further develop payment services for online shopping, social e-commerce, and offline activities; on the commodity supply side, it can connect the ecosystems of electronic consumer products, exhibition ticketing, and e-commerce commodities to build a full-stack consumer experience.

While guiding users and developers to build a richer gaming experience ecosystem, the team needs to constantly explore how to connect daily user needs with the on-chain world to build a stable ecosystem. For example, Web3 payment needs to be widely used, which requires a key incubation scenario like e-commerce for Internet payment. When the payment needs in real scenarios mature, TONs encrypted payment and financial services can usher in an explosion. In addition, the expansion of TON and TGs integration in non-Asian markets faces challenges in user education and concept change, especially in how to transform communication tools into multi-functional platforms.

LongHash Ventures ( Emma Cui) : The TON team is committed to building a WeChat-like super app that combines instant messaging, social networking, DeFi, and e-commerce, all based on TON blockchain technology. Their vision is to make it a portal to Web3, attract hundreds of millions of users, and enable billions of transactions in Telegrams user-friendly and seamless environment, leveraging the existing user base. The goal is to leverage TONs established distribution channels to gradually introduce and familiarize Telegrams loyal audience with on-chain workflows.

Although the goal of following WeChat to become a super app is daunting, given the unique environment in which WeChat grew, such as government support, integration with almost all banking systems in the country, and lack of competition in its early development, we believe that the TON ecosystem is gathering momentum and could become the largest entry channel for Web3 users in the short to medium term. We have written research articles on the growth of the TON ecosystem and its potential risks.

ANAGRAM ( David Shuttleworth ): TON has seen significant growth over the past year – $TON token market cap has climbed from $2 billion to $4 billion in 2023 to $8 billion in 2024, with network users and activity reaching all-time highs. With Telegrams user base of over 900 million and expanding functionality, the potential of the TON ecosystem far exceeds that of other blockchains.

However, despite the rise in adoption, the TON ecosystem lacks meaningful applications, and users can only speculate on the underlying tokens. Insufficient developer incentives, like other chains provide millions of dollars in financial incentives to attract builders and strong applications, while TON has no such mechanism. In addition, TON lacks a native stablecoin pegged to the US dollar, and users have limited choices for stablecoins, relying on wrapped ERC-20 tokens (such as jUSDT) bridged from Ethereum. The poor user experience severely limits the network liquidity of end users and exacerbates the difficulty of deploying applications.

The situation began to turn around in early 2024, with two key factors being the proper ecosystem incentive plan and the native launch of Tether. The TON Foundation launched the Open Alliance, distributing $30 million TON to incentivize developers and users to participate in network construction, giving developers a strong motivation to start deploying more powerful applications and compete for user attention. The quality of builders in the industry is very limited, and this has become a confrontational game, with developers competing with each other, and the ecosystem must also compete with each other to attract the best talent. Without a strong incentive framework and sufficient liquidity and user demand, the network will not be able to gain meaningful attention.

In April, the integration of Tether USDT introduced the first dollar-denominated stablecoin to the TON network. The deployment of such stablecoins, such as USDT or USDC, is critical to the success of the network. Since the launch of Tether, user activity has grown significantly, with daily transactions reaching a new high of over 3.7 million, an increase of more than 530%. At the same time, the number of daily users has also risen significantly, breaking through 1 million for the first time in September and recently reaching 1.1 million, an increase of 752% since April.

As liquidity and incentive systems improve, the next step is to deploy new applications. While most of TONs growth has only recently occurred and there is still room for more improvement, such as better developer tools, it is ready to expand further. If strong applications can settle in, TON has the opportunity to really leverage its distribution channels in a meaningful way. Otherwise, it may face considerable resistance, weakened ecological incentives, causing more powerful applications to be deployed elsewhere, users to flow to the next opportunity, and competition between ecosystems to intensify further.

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This article is sourced from the internet: Crypto Evolution Issue 05 | OKX Ventures LongHash ANAGRAM: The future of Web3 social and consumer tracks

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