Why Is $TON Pantera Capital’s “Largest Investment Ever”?

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Crypto hedge fund Pantera Capital has announced that the firm made its “largest investment ever” in Telegram-affiliated layer one (L1) blockchain The Open Network (TON).

TON has been on an incredible run of late, surging nearly 200% since the start of 2024 to cement its place among the top 10 cryptocurrencies by market cap.

Why is Pantera betting on the TON blockchain? Let’s find out.

Key Takeaways

  • Pantera currently has over $4.7 billion in blockchain-related assets under management.
  • TON is a L1 blockchain that was originally developed by Telegram in 2018.
  • Pantera said that TON can leverage Telegram’s over 900 million monthly active users to become “one of the largest crypto networks”.
  • TON claims to be the fastest blockchain in the world due to its sharding design.
  • Telegram introduced TON-based ads and ad revenue sharing with users in 2024.

Who is Pantera Capital?

Pantera Capital is one of the biggest crypto investment firms in the world. The company was founded by Dan Morehead, former chief financial officer of American hedge fund Tiger Management.

In 2013, Pantera launched the first cryptocurrency fund in the U.S. Today, the firm has five funds that invest in Bitcoin (BTC), blockchain-focused companies, early-stage tokens and publicly traded cryptos. At the time of writing, Pantera has over $4.7 billion in blockchain-related assets under management.

The company has invested in over 100 blockchain companies and early-stage tokens. According to data firm Tracxn, Pantera’s top investments to date were Bitso (2021), Coinbase (2021) and Alchemy (2022).

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How is TON Associated with Telegram?

Let’s briefly talk about the history of TON, or Toncoin, to understand its association with instant messaging app Telegram.

TON is a L1 blockchain that was originally developed by Telegram in 2018. The project soon hit a major roadblock when Telegram was forced to abandon the project in 2019, following a US SEC lawsuit for “unregistered offering of digital tokens”.

By 2021, TON was being managed in an open-source manner by its community.

Although no longer at the helm, Telegram maintained its close association with the blockchain project. In September 2023, Telegram co-founder Pavel Durov announced that a TON crypto wallet will be introduced to the Telegram messaging app, enabling users to buy and sell supported cryptocurrencies, access decentralized exchanges and non-fungible token (NFT) platforms directly from their Telegram app.

Why is Pantera Investing in $TON?

Pantera believes that TON is best placed to introduce crypto to the masses because of its integration with the Telegram messaging app. Pantera said that TON can leverage Telegram’s over 900 million monthly active users to become “one of the largest crypto networks.”

Pantera said in a blog post:

“99.999% of blockchain projects are a tech idea trying to create a community – from nothing …

Telegram is a community integrating blockchain technology. That’s just got to be easier.”

Additionally, Pantera added Telegram’s privacy-preserving values, free speech ethos and open-sourcing allows the platform to stand out from competitors and synergizes well with similar crypto principles.

“Telegram is the only major platform that is free of regulatory hurdles to incorporate Web3 for an open blockchain network. While Messenger attempted to incorporate crypto payments with Libra, they ultimately faced regulatory hurdles from the U.S that led to a complete shutdown.

“WeChat has attempted to integrate CBDC payments of digital yuan, but the system is limited in scope and builders don’t have the ability to create permissionless applications,” said Ryan Barney, partner at Pantera Capital.

High Performance, Mini Apps and Revenue Sharing Model

Pantera’s investment is not solely based on TON’s association with Telegram. Here are key reasons why TON was selected to receive Pantera’s biggest investment to date.

1. High Performance

Based on tests conducted on TON with 256 validator nodes, the blockchain completed 104,715 transactions of smart contract executions per second, making it the fastest blockchain in the world. According to the TON Foundation, the test was conducted publicly in real-time and was overseen by independent auditor Certik.

TON uses a process called sharding to support high performance and scalability. The process of sharding splits the TON blockchain into multiple secondary chains that process transactions independently.

According to TON, its blockchain consists of one masterchain and up to 232 secondary, independent chains called workchains. Each workchain can further split into 260 shardchains.

At the time of writing, only one workchain was operational on TON.

2. User Experience

Crypto has always had a user experience issue. For years, industry experts have pointed to tedious crypto wallet setups and secret recovery phrase management needs as a major hindrance towards increased crypto adoption.

When it comes to TON, the onboarding and user experience is seamless. Telegram users do not have to download a separate crypto wallet to manage tokens and access web3 websites. The TON crypto wallet is a built-in feature within the Telegram app allowing users to buy, sell and manage tokens and NFTs within a single interface.

3. Mini Apps

On Telegram, users will find an ecosystem of “miniapps” with crypto integrations.

Crypto developers can now reach Telegram’s global audience by launching their mini app. Furthermore, Telegram advertisements enable direct advertising of crypto mini apps to millions of Telegram users.

You can think of these crypto mini apps as decentralized apps (dApps) that are hosted on Telegram and TON. Users can access crypto games, lending platforms, decentralized exchanges and NFT platforms without leaving the Telegram app.

According to Pantera, over 360 million users engage with Telegram mini apps every month.

4. Revenue Sharing Model and TON Ads

In February 2024, Telegram announced a new revenue-sharing model where Telegram channel owners will receive 50% of the revenue from ads displayed in their channels.

Telegram introduced TON-based ads to enable this revenue-sharing model, where users purchase ads using TON tokens. Channel owners earn their rewards in TON tokens.

The announcement added yet another utility to TON tokens, which can also be used to purchase Telegram usernames and numbers, subscribe to Telegram Premium, and for channel giveaway campaigns.

5. Native Stablecoins

In April 2024, stablecoin issuer Tether announced that it will deploy its dollar-pegged stablecoin USDT and gold-backed cryptocurrency XAUT on the TON blockchain.

“We believe that stablecoin payments on Wallet in Telegram are particularly crucial for individuals in developing countries, who often lack access to banking services and are forced to navigate complex crypto user interfaces to store and transfer funds.

“With stablecoins deployed on the TON network, crypto is making a significant leap toward realizing the vision of programmable peer-to-peer money and a decentralized financial system accessible globally,” said Pantera Capital.

The Bottom Line

Telegram co-founder Pavel Durov’s dedication in creating a neutral and privacy-preserving social platform is said to have played a key role in Pantera’s decision to take a big bet on TON.

Durov had to leave his home nation of Russia to keep Telegram free of political censorship. Now he is focused on helping cryptocurrencies and decentralized finance to reach the masses.

So, with some experience-based intent at the start of the chain’s life, and an in-built Telegram community, there are good reasons for Pantera to see a bright future for TON.

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Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong Lepcha
Crypto & Blockchain Writer

Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.