Telegram Escape Roomer

Last week, the Yescoin team's coup split event once again brought the spotlight back to the "TON Ecosystem." After a long silence of the TON chain's voice, we began to reminisce about this three-year period on the eve of "takeoff," which ultimately only saw a few months of buzz for the Telegram-backed public chain.

At its peak, exchanges raced to list tokens from Telegram's small games. Over a span of more than 4 months, the world's largest cryptocurrency exchange, Binance, successively listed 5 tokens from the TON ecosystem. Hundreds of small games emerged in a short period, with over 2,000 in preparation for launch. Notcoin had a monthly revenue of over $300,000, while Catizen achieved revenue exceeding $16 million. The TVL data of the TON chain increased by 70 times. TON's price also rose from $2 to a high of $8. Market expectations for the TON ecosystem reached a peak, leading both inside and outside the industry to believe that Web3's "traffic gold mine" had finally found a new outbreak.

However, this seemingly thriving ecosystem was nothing more than a short-lived speculative game. In the summer of 2024, the market suddenly came to a halt—exchanges stopped listing TON ecosystem coins, Telegram's founder was arrested, project teams fell silent, and player communities turned into "ghost towns." Overnight, this so-called "traffic gold mine" track turned into a depleted mine, leaving behind only data black boxes, an overdrawn market, and abandoned developers.

What exactly happened during this period? BlockBeats interviewed three former Telegram small game project teams to dissect the true reasons behind the TON ecosystem's "flash in the pan."

False Prosperity; Opaque Traffic

The remarkably low customer acquisition cost of Telegram small games had always been a topic of much discussion and one of the main reasons why most Telegram small game project teams chose to undertake their projects. Today, this is also seen as the root cause of the entire ecosystem's bubble.

"In Web3, the customer acquisition cost for a company, such as an exchange or a large-scale chain game, is typically around $10 to $15, but through Telegram small games, this cost can be much lower, well below $1, around $0.7," said KinKin, a project team member who left Telegram small games six months ago and has since shifted to AI Agent research. She further explained to BlockBeats, "In some regions, it's even more exaggerated, like in India, where the customer acquisition cost can be as low as $0.002 to $0.05."

This extremely low customer acquisition cost has created a paradise for project factories, where real users have become a somewhat optional presence.

“Before listing, I didn't really need real users that much. The volume from the studios was enough. In a very short time, we reached a volume of 200,000 to 300,000, which is a benchmark for a Telegram mini-game, considered a lightweight to mid-weight volume.” Xiaoguang has orchestrated the token launches of multiple Telegram mini-games and, when faced with questions from BlockBeats, he did not shy away from discussing the industry's operating model.

This gameplay has already been standardized and streamlined in the industry. Several studios that have worked together long-term are very skilled, even more so than most Web3 projects. “The required volume in the early stages of the project, how much needs to be added before the TGE (Token Generation Event), is all agreed upon by the project team and the studios,” Xiaoguang explained. If simply increasing the volume is not enough, they will amplify the data through “volume exchange.”

“Once we reach the 200,000 to 300,000 volume, we engage in volume exchange—meaning two games mutually redirect traffic to each other to reach the next level of volume,” Xiaoguang added. Compared to traditional blockchain games, the data volume of Telegram mini-games has far exceeded that of most Web3 projects. However, everything has two sides, and the other side of low cost often means low quality, while data inflation has also obscured the ecosystem's true issues.

“The data in the TON ecosystem has always been operated as a black box. In the past, for those VC projects, most of the data could be found on platforms like Dune. You could see how many addresses had how much transaction volume, and investors would conduct some due diligence. But the real data of Telegram mini-games is not public. Only a few insiders know the approximate number of users and the ratio of real users,” Xiaoguang believes this is the natural environment for a project factory.

“Do you know how many real users Notcoin has? You don’t know,” Xiaoguang stated frankly, “All the data seen by the public is what the project team wants you to see.”

The decline in the proportion of real users has further exacerbated the market's false prosperity. “In the early stages, a few games like Hamster Kombat were relatively good, with probably around 60% being real people. But as the ecosystem expanded, this ratio kept decreasing, and towards the end, having 40% is already considered impressive,” Xiaoguang revealed to BlockBeats.

Even within this 40%, the “drop farming tax” of professional carpetbaggers has not been excluded. Their goal is not to play the game but to receive airdrop rewards. “When we calculate the number of depositing users, 90% of the remaining real users are actually the same group of people behind each address, they specifically join for the airdrop, play, and then leave.”

This user structure directly determines the vicious cycle of the Telegram gaming ecosystem — in the short term, data inflation masks the true situation, allowing investors and trading platforms to continue to foot the bill; but in the long term, the overall ecosystem has very poor user quality and extremely low stickiness.

From the perspective of trading platforms and investors, on the surface, the monthly active data of Telegram games is astonishing, and the traffic is huge, but the real user retention rate and conversion rate are pitifully low. "If it's just to create monthly active data, wallet addresses to show trading platforms and investors, then this low-price traffic is enough," said Sleepy, the founder of Small Ghost NFT. This month, they decided to temporarily suspend game development on Telegram.

"But if you want truly active users, users who are willing to play your game, use your app, you absolutely cannot rely on such a low acquisition cost," Sleepy said. "It seems that, as it stands now, the saying still holds true — you get what you pay for."

“Our promotion still relies on Crypto Twitter, community promotion, and crypto ad channels, along with project cross-promotion.” Sleepy said. “But with all the swapping, we still couldn’t break out of this circle.”

In other words, traffic just flows from one project to another, but the overall pool remains stagnant, with no fresh inflow of active users.

The TON ecosystem has never really bridged the gap between Telegram's 900 million users and Web3. It seems that the TON Foundation and Telegram have not built a truly effective distribution channel to enable crypto apps to reach a wider audience. Sleepy said, "Maybe they are trying, but I have not seen results yet."

TON and Telegram have never been the same.

TON Foundation: Vacuum of Power and Directionless

Over the past six months, when talking to industry insiders about the TON Foundation, they always mention the "factional struggles" within the TON Foundation: the Russian team, the Taiwanese team, and the Dubai team after TON obtained the Dubai financial license. The lack of synergy among these three teams has made resource allocation within the TON ecosystem extremely uneven — in the TON ecosystem, whether you receive support often depends on your relationship with the Russian team.

The TON Foundation was initially founded by two core members, one of whom is currently still active in various online and offline activities as the Foundation's Chairman, Steve Yun, while 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, a Russian version of Facebook), and is considered by some to be a "key figure in the inner circle."

However, at some point, the power structure of the TON Foundation underwent a subtle change—Andrew Rogozov seemed to fade out of the core management of the Foundation and founded TOP (The Open Platform). This organization now appears to be more like a true foundation than the TON Foundation itself, or as if it is the ConsenSys of the TON ecosystem, and even leads the core ecosystem development of TON.

"To be honest, as a foundation, we actually 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 point of integration. And that's not our team; it's a completely different company called TOP." This was mentioned by Jack Booth, the Marketing Director of the TON Foundation, in an interview in July 2024, indirectly confirming the influence of TOP.

TOP's influence has gradually surpassed that of the TON Foundation. They not only invest in and support the most critical projects on TON but also control the infrastructure of the ecosystem—they are responsible for operating the Telegram official wallet TON Space, supporting the most active wallet in the TON ecosystem, Tonkeeper, and the largest DEX in terms of trading volume, Stonfi. Even the only staking protocol, Tonstakers, is supported by TOP. From the standpoint of key nodes in the TON ecosystem, TOP has become the de facto "core builder" of TON, while the TON Foundation is more like a public relations organization, gradually being sidelined.

Then, on January 14, 2025, the TON Foundation announced the appointment of Board Member and Founder of Kingsway Capital, Manuel Stotz, as the new CEO, while the former CEO, Steve Yun, will continue to serve on the board.

In the face of such "dissolution of power," it is also understandable why there are rumors that "the TON Foundation, led by a Taiwan-based team, has virtually no say in many matters."

The vulnerability of the Chinese in the TON Foundation's ecosystem resource allocation has become more apparent. "The Taiwanese team has little say, and 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 receive the most support. For example, Catizen, their relationship with Russia is very good, they received investment and a large amount of resources."

Xiaoguang's words were indirectly confirmed in TOP's investment list, which currently includes Catizen's game developer, Pluto Studio.

Another hit indie game, Notcoin, founder Sasha Plotvinov, openly stated that his relationship with the TON Foundation is extremely close. This relationship not only allowed Notcoin to gain a foothold in the TON ecosystem but also positioned it as a benchmark project in the Telegram mini-games track. It is worth noting that Sasha Plotvinov is also the CEO of Open Builders, whose products overlap significantly with TOP's and also belong to the "core circle." "DOGS is also done by the Notcoin team, all controlled by the Russians themselves," Xiaoguang said. "There are also many similarities in trends."

Looking at the three coin trend charts from August last year to the present, the trends are indeed very similar. Furthermore, looking at March 16th yesterday, influenced by the news of "Telegram founder Pavel Durov allowed to leave France," some tokens in the TON ecosystem rose, of which: TON had a 24-hour increase of 20.7%, currently priced at $3.53; NOT had a 24-hour increase of 18.7%, currently priced at $0.002543; DOGS had a 24-hour increase of 10%, currently priced at $0.0001475. (Prices are as of March 17th deadline)

From top to bottom: TON, NOT, DOGS

The success of Catizen and Notcoin is not so much the success of the track as it is the high centralization of TON's core resources. These two projects started half a year earlier than most mini-games and received full support from the foundation. In other words, the prosperity of TON mini-games is not a true "open ecosystem" but a game of resource allocation.

Another fatal issue in the TON ecosystem is the confusion and sudden shifts in strategic direction. At the resource support level, the TON Foundation's focus swiftly transitioned from supporting Telegram mini-games to DeFi, directly causing many mini-game developers to abandon their projects.

"When we contacted the Foundation, we could clearly feel that, at some point, they basically stopped paying attention to all game-related projects and started frantically looking for DeFi projects," Sleepy said. "This shift was too sudden and was a huge blow to teams that were seriously building products, leading to the loss of many developers and users."

Sleepy strongly disagrees with the direction change made by the TON ecosystem: "I believe TON should not simply replicate what other public chains are doing. Without relying on Telegram, TON cannot achieve its current user base in terms of performance, language, and development complexity. Therefore, TON's future development should be planned based on the social platform's unique characteristics, rather than copying other public chains."

"Our initial assessment of TON was that its ecosystem would be similar to WeChat Mini Games or TikTok Mini Games, becoming part of social platform traffic monetization." However, the TON Foundation's decisions completely deviated from this direction. "They ventured into stablecoins and DeFi, which were huge mistakes, similar to WeChat launching a stock trading mini-program. Would you ever use a WeChat mini-program for stock trading?" Sleepy candidly expressed.

This strategic error by the TON Foundation not only led 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 event dealt a massive blow to the TON ecosystem, plunging the Foundation into disarray.

"The reason is actually because they added a function similar to fiat-to-stablecoin, which involves compliance and political factors, especially against the backdrop of the Russia-Ukraine war." Xiaoguang revealed to BlockBeats. Prior to this, BlockBeats had also heard similar opinions from other sources, indicating that a stablecoin-related feature attracted regulatory scrutiny.

The original TON ecosystem was already in disarray due to strategic swings and uneven power distribution, and the sudden event involving the founder further caused this ecosystem to lose its final support.

"Death Accelerator": Project Factory and Trading Platform

In addition to the traffic black box, factional struggles within the TON Foundation, and sudden shifts in resource support, the project factory and trading platforms were also key factors accelerating the demise of the Telegram mini-game track. The frenzy of this ecosystem is essentially a short-lived capital game, with true user growth long since stalled.

Within this track, game development has become highly industrialized, with project factories mass-producing various mini-games in a assembly-line fashion, conducting trial and error in the market, and a few projects always manage to succeed. "For example, the game developer behind Catizen, Pluto Studio, initially launched more than a dozen games, and eventually found that the cat-breeding model worked best before deciding to focus on it," KinKin explained.

In other words, Catizen's success was not accidental but rather the result of intensive project experimentation. This model is fundamentally high-turnover, low-cost, and quick to iterate.

"The cost is actually very low," KinKin explained, "Many game developers directly search for validated games in the WeChat Mini Program market, obtain the game's code, replace the H5, add a Telegram IDK (Integrated Development Kit), and can go live directly. Moreover, as the project progresses, the price of such mini-game codes becomes increasingly cheaper."

Low cost, short cycle, quick deployment make these game projects highly speculative. More importantly, once a game model is market-validated, it is quickly replicated and amplified, with the leaders often having the 'pricing power.' KinKin mentioned, "When negotiating listing with trading platforms, Catizen was very aggressive, even leaning towards OKX, demanding $500,000."

Once a project gains traction, its bargaining power significantly increases. The reason Catizen could negotiate strongly is that after the failure of multiple game projects, it accumulated enough market experience and precisely identified a user base willing to spend. "Small games like Catizen, which have been validated through more than a dozen projects, already have mature products and have attracted a wave of users willing to pay," KinKin said.

The success of the leading projects also brought about another issue—a high concentration of resources. "The traffic from a single project like Hamster Kombat can almost match that of a medium-sized trading platform."

However, the Telegram mini-game ecosystem has never seen "living water" come in, lacking the entry of external incremental markets. The high-density "bombardment" of project factories has left little room for other mini-games to survive, let alone Web2 game developers—who are holding a large number of abandoned, unreleased games with extremely low trial and error costs. In this competitive environment, the Telegram mini-game track has accelerated its decline.

Another driving factor is the game theory of trading platforms. The traffic brought by the TON mini-game has shown trading platforms a new growth point, leading to frequent listings in the short term, causing the market to be overdrafted prematurely. Looking back at Binance's listing timeline, it can be observed that the interval between listings for new projects has been getting shorter:

May 16: Notcoin listed;

84 days later: TON listed;

13 days later: DOGS listed;

23 days later: Catizen listed;

13 days later: Hamster Kombat listed

"During the listing of DOGS, all trading platforms were rushing for this data, even offering rewards for activities such as 'Withdraw from my platform, and I will give you back X amount of DOGS.' Why did they know that DOGS had traffic? Because NotCoin had already proven it once. NotCoin and DOGS are developed by the same team, taking the same path as NotCoin with a different skin." KinKin told BlockBeats.

A deeper issue is that the user growth rate in this cycle has fallen far behind the previous cycle. At least before the Trump listings, the market's anxiety about Web3 user growth was very evident, and this anxiety naturally transmitted to trading platforms. Although the user quality of Telegram mini-game track is uneven, at least in the early stages, the conversion of TON traffic could still bring some data growth to the trading platforms. However, this data growth is fundamentally unsustainable.

Ultimately, as more projects emerge from the factory, the frequency of listings on trading platforms increases, and the cooling rate of the track also accelerates.

After several rounds, the user increment on trading platforms gradually dries up, losing the motivation for further listings. For latecomers, the first-mover advantage has been maximized, and the survival space for later projects and coins is shrinking. All of this makes the collapse of the Telegram mini-game ecosystem inevitable.

TG+ Web3, Is It Really a False Proposition?

"Have you ever envied those projects that can list on Binance?" Faced with BlockBeats' question, Sleepy responded quickly, clearly having considered this question long before.

"It depends on how you define success. Many people think that being listed on a trading platform is a kind of industry recognition, but I don't have that feeling. For me, launching a coin is not the project's endpoint. If you treat it as the endpoint, it can be very detrimental, hurting yourself, the community, and investors. Because everyone can see that after these coins are listed, the performance is very poor, and the effect of attracting new users is far from the platform's expectations." Sleepy said.

The "Fast Money Logic" of the TON ecosystem makes everything simple and brutal — a new project every three weeks, with the market being led by quick-money traders setting the pace. Teams that truly want to build something meaningful end up being eliminated as "oddities." 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 ultimately chose the latter. He cut 80% of the team, with several key members choosing to delay their salaries and allocate some resources to a Web2 design outsourcing business to sustain the team's survival.

"Furthermore, we are also in discussions with some public chains about grants. We have already received the first Launch Grant and will continue to do some development work to complete the remaining KPIs. We have also applied for hackathons like Monad Madness to see if we can achieve some results. Currently, the income from the past few months is already more than what we earned from gaming on TON," he joked.

After the collapse of the TON ecosystem, various individuals who were once active in it found their own new paths.

KinKin has now shifted to the AI Agent track and is very optimistic about the future of the BASE chain. The one who excelled at creating projects, Xiaoguang, is now researching memes. He understood early on that the "Telegram mini-game business is structural and has never been a sustainable model; the window of opportunity is only a few months." A former member who had worked hard to promote the ecosystem at the TON Foundation has now left to research Kaia, a public chain merging South Korean and Japanese WeChat.

In an ecosystem driven by traffic, only the traffic itself remains in the end. The TON ecosystem did not become the "future of crypto social networking"; it was just another cyclic Web3 narrative, a market game that is shorter, faster, and more extreme than public chains and ZK rollups.

Looking back on this carnival today, for developers, the TON ecosystem once disguised itself as the "fusion of social and Web3," attracting them to enter the market, only to turn them into producers of black-box data; for gamers, the airdrop created the illusion of "overnight wealth," but the result was that a $0.99 game package became the new era's "cyber incense money."

Taking a broader view of the entire industry, the rise and fall of Telegram mini-games is not an isolated phenomenon; it is merely an extreme "microcosm" of the entire Web3 industry. In fact, whether it is public chains, ZK rollups, or Layer 2, the essence of many tracks is the same; they are just packaged more grandiosely, with higher costs and longer cycles. Most Web3 projects are fundamentally engaged in a large-scale Telegram mini-game, with some having longer lifecycles and others shorter.

「Telegram + Web3, Is It Really a False Promise?」

Each interviewee has given their own answer, but I have decided not to write it down because, dear reader, this time, I want to hear your thoughts.

This article acknowledges all interviewees who provided information. Due to privacy protection, some interviewee information has been obfuscated.