Produced by: CGV Research
Author: Shigeru
TL;DR
This examines the potential of Web2 apps like X and Telegram in the Web3 world, not only as insights into the future development of these social platforms but also as a forecast of the new landscape and order of the Web3 world.
X and Telegram have distinct differences in user market distribution, key features, innovation capability, business models, openness, community culture, and Web3 exploration. Their competition and cooperation may coexist in the long term.
Key factors for victory in the Web3 super app competition between X and Telegram include reshaping user experience, setting new standards for privacy and security, technological innovation and ecosystem integration, and innovative business models.
Despite the escalating competition between X and Telegram in the Web3 super app arena, there are still uncertainties in the evolution, and the final competitive landscape may present unexpected outcomes.
The Cryptographic Evolution of Web2 Social Giants and the Potential New Order of the Web3 World
Web3, representing the next generation of the internet, marks a significant shift from centralization to decentralization. Compared to Web2, Web3 emphasizes user data ownership, decentralized network structures, and transparency based on blockchain technology. This signifies not only a technological leap but also foreshadows innovations in network interaction methods and business models.
For example, the rise of Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs) is a practical manifestation of the Web3 concept. According to DappRadar data, the TVL peak in the DeFi sector reached $267 billion in 2022, while the NFT market’s trading volume was approximately $25 billion. These figures highlight the immense potential of the Web3 world.
In the Web2 era, WeChat undoubtedly stood as the titan of social applications. As of 2023, WeChat’s monthly active users have exceeded 1.2 billion, making it one of the most popular social apps globally. WeChat is not only a communication tool but also a super app that integrates functions like payments, shopping, gaming, mini-programs, and more.
WeChat’s success lies in its all-encompassing ecosystem, enabling users to accomplish nearly all daily tasks on one platform. Its influence is not only evident in user numbers but also in how it has transformed people’s lifestyles and business models.
Against this backdrop, exploring the potential of Web2 apps like X and Telegram in the Web3 world is not only an exploration into the future development of these social platforms but also a forecast of the new landscape and order of the Web3 world.
Of course, other social platforms like Facebook and Kakao also have significant room to thrive in the Web3 world. However, currently, X and Telegram appear to be the Web2 social platforms most likely to make early gains in the Web3 world.”
“X and Telegram, as globally renowned social media platforms, each possess unique strengths and expansive user bases. X is known for its wide-reaching influence and diverse user demographics, while Telegram is favored for its high regard for privacy protection and security. In the wave of Web3, these two platforms face challenges of adapting to decentralization trends and leveraging blockchain technology for innovative services and business models. These factors will be crucial in determining whether they can become Web3 super app giants akin to WeChat in this new era.
Elon Musk has repeatedly praised China’s WeChat, stating that ‘you can do everything in WeChat in China’. His vision is to create an equally comprehensive super app, with X being his namesake for this application. To cater to the unique needs of a dating service, X may need to develop new algorithms and user interfaces. Additionally, becoming a ‘digital bank’ implies that X might introduce financial services such as payment processing, fund transfers, or even cryptocurrency transactions. This would require X to establish a robust security and compliance framework to ensure the safety and legality of financial transactions.
Meanwhile, Telegram’s co-founder Pavel Durov initially envisioned TON as a means to integrate cryptocurrency transactions into chats and monetize through in-app currency. In mid-September 2023, the TON Foundation announced an official partnership with Telegram, aiming to integrate and promote the TON network ecosystem to Telegram’s 800 million active users. Their goal is to attract and convert 30% of Telegram’s active users, or 240 million users, into active TON network users by 2028. The wallet TON Space, which provides self-hosted storage, has seamlessly integrated into Telegram, enhancing user convenience and potentially attracting new users interested in cryptocurrencies.
In this rapidly evolving digital age, it is much easier to encroach upon low-frequency scenarios within high-frequency settings than vice versa. Social media, as an ultra-high-frequency scenario, faces lower difficulty in penetrating financial scenarios compared to adding social elements in financial scenarios. Convenience is the key to success. Enabling users to download one less application is a clear indicator of success.
Both X and Telegram are striving towards this goal, but their paths and strategies differ. Over time, we will see which platform can better adapt to the trends of Web3 and ultimately emerge as the leader of this new era.
Functionalities we’ve seen on WeChat will be realized on X and Telegram. These rich ecosystems will form a powerful force, significantly increasing user stickiness and usage duration on X and Telegram. This logic is similar to the transition from the internet to mobile internet, and then from applications to mini-programs. Nonetheless, at the initial stage, this is sufficient to make a substantial impact on the Web3 world.
By analyzing their current status, strengths, challenges, and future possibilities, we can gain a better understanding of the development trends and business opportunities in social media for the Web3 era. This includes but is not limited to:
Expansive User Bases: Both X and Telegram boast massive global user bases. This means that as they transition to Web3, there is potential to bring hundreds of millions of users into the Web3 ecosystem. This scale of user migration is crucial for driving the popularity and adoption of Web3.
Influence and Brand Awareness: As globally recognized social media platforms, X and Telegram wield significant brand influence. Their adoption and promotion of Web3 could have a substantial impact on public perception and attitude towards Web3.
Potential for Innovation and Technological Integration: Both X and Telegram have a history of implementing technological innovations and integrating new technologies. Their activities in the Web3 domain could bring about new technological breakthroughs, particularly in decentralization, data security, and user experience.
Shifts in Business Models: Web3 offers a completely new business model, especially in terms of data ownership and user incentives. X and Telegram’s exploration in these areas could pioneer a new chapter in social media business models.
Reshaping of Privacy and Security: As users become increasingly concerned about privacy and data security, Telegram has already established a reputation in this regard. X and Telegram’s developments in Web3 may further strengthen their ability to protect user privacy and data.
Community and Decentralized Governance: Web3 emphasizes the power and involvement of communities. X and Telegram’s experience in building and maintaining active communities could play a crucial role in establishing decentralized governance structures and promoting user participation.
Therefore, the development potential of X and Telegram in the Web3 world deserves close attention. Their moves may have profound implications for the entire Web3 ecosystem and even the future of the internet.
X and Telegram: Basic Information and Competitive Analysis
X and Telegram are globally renowned social media platforms, each with a vast user base and extensive market reach. They differ in key functionalities, with X focusing more on public topic discussions and information dissemination, while Telegram places greater emphasis on privacy protection and security. The main distinctions between the two include:”
Comprehensive comparison between X and Telegram
1. X:
User Base: As of 2023, X has approximately 528 million monthly active users. Its user base is global, with a significant presence in countries like the United States, Japan, and India.
Market Distribution: X holds notable influence worldwide, particularly prominent in Western countries. It plays a crucial role in politics, entertainment, and news dissemination.
Key Features: X is renowned for real-time information dissemination, public topic discussions, and high user interactivity. It also supports features like multimedia content sharing, live streaming, and topic hashtags.
Web3 Milestones:
X has previously introduced blockchain-based NFT avatar verification and explored functionalities for tipping with cryptocurrency.
On October 29, 2023, Elon Musk announced X’s vision, anticipating it to become a “mature” dating site and a “digital bank” by 2024.
2. Telegram:
User Base: Telegram boasts over 70 million monthly active users. It is particularly popular in countries like Russia, India, Iran, and Brazil.
Market Distribution: Telegram has users across various countries and regions globally, especially favored in areas with a high demand for online privacy and security.
Key Features: Telegram is known for its high emphasis on privacy protection and security. It supports end-to-end encrypted private chats, large groups and channels, and file sharing functionalities.
Web3 Milestones:
From May to July 2023, the success of Unibot (token price increased by over 100 times within three months) triggered FOMO sentiment in the market. Based on the integration of artificial intelligence and social, Telegram Bot covers areas like trading, airdrops, communities, and cross-chain, enriching the application scenarios of the crypto industry and bringing innovative development paths to the industry.
In July 2023, Telegram introduced the “Stories” feature. Users can edit content by clicking on the “+” icon at the bottom right corner of the main interface and selecting “Create Story”. It supports uploading various media types such as images, videos, audio, and allows the addition of text and location information. Similar to WeChat Moments, users can set filters to control which friends can see the posted content. This complements the product features and paves the way for Telegram to create a Web3 version of WeChat in the future.
In September 2023, the TON Foundation announced a formal partnership with Telegram. Telegram will integrate TON Space, a self-hosted encrypted wallet introduced by TON, and from that day forward, all Telegram wallet users will be able to use TON Space. The next step is to roll out this service to Telegram users worldwide in November this year.
In October 2023, the TON Foundation applied for a Guinness World Record for “fastest blockchain” and will conduct performance tests on October 31st to demonstrate the reliability, scalability, and speed of the TON blockchain.
Four Key Elements for Decisive Victory in the Web3 Super App Competition
1. Reshaping User Experience:
In the Web3 era, reshaping user experience means going beyond traditional convenience and interface appeal, towards deeper engagement and ownership.
X: With its extensive user base and rich content, X can incentivize users to create and share high-quality content by introducing a cryptocurrency reward mechanism. For instance, providing token rewards for popular tweets or influential content creators can enhance user engagement and sense of belonging.
Telegram: Leveraging its high emphasis on privacy protection and security, Telegram can create a more secure and private social environment. For example, by introducing blockchain-based identity verification and data storage, Telegram can provide advanced levels of privacy protection and data security.
TON meets the goal of millions of TPS in the future by realizing the “infinite sharding paradigm” and brings a better user experience (Source: Beosin)
2. Setting New Standards for Privacy and Security:
In the Web3 era, privacy and security will be crucial factors for users in choosing social platforms.
X: Needs to put more effort into protecting user privacy and data security. For instance, X can introduce decentralized data storage solutions to ensure the safety and immutability of user data.
Telegram: Already possessing inherent advantages in privacy and security, Telegram can further strengthen this advantage, for instance, by introducing a blockchain-based decentralized authentication system to provide higher levels of user privacy protection.
Compared with Ethereum and the Bitcoin network, TON has obvious advantages in fault tolerance and redundant storage
3. Technological Innovation and Ecosystem Integration:
Technological innovation and integration with a broader ecosystem are key aspects of the Web3 world.
X: By collaborating with other Web3 projects and services, X can enrich its platform functionality and user experience. For example, X can integrate DeFi services or NFT markets, allowing users to engage in financial activities or digital art trading while interacting socially.
Telegram: With its openness and flexibility, Telegram has the potential for deep integration with a wider Web3 ecosystem.
4. Innovation in Business Models:
For social media platforms, it’s important to explore new sources of revenue and growth while maintaining user stickiness.
X: As of 2023, X’s financial data shows that its primary source of revenue is still advertising, accounting for the vast majority of total revenue. According to 2022 financial report data, X’s advertising revenue reached about $4 billion. Additionally, X generates revenue through data licensing and other services, which, although a smaller portion, still brings in hundreds of millions of dollars in revenue for the company. X is also actively exploring new revenue channels, including launching subscription services, enhancing e-commerce functionality, and integrating cryptocurrency payments.
Telegram: Since its founding in 2013, Telegram has grown into a product with over 800 million monthly active users worldwide. However, its revenue scale is not proportionate to its user base. Currently, aside from standard subscription services, Telegram’s main revenue comes from limited advertising. According to reports, Telegram’s advertising revenue in 2022 was only 10 billion rubles, equivalent to about $104 million. In comparison, Bilibili, with only a quarter of Telegram’s monthly actives, generated nearly $700 million in advertising revenue in 2022.
5. Impact of Business DNA:
In exploring the competition for super apps in the Web3 era, the business DNA of X and Telegram will significantly influence their development trajectory.
X: The business DNA of X is very similar to platforms like Weibo, a social sharing platform. For example, as a public platform centered around information dissemination and social interaction, this aligns closely with X’s original intent and development direction. Weibo’s success lies in its ability to rapidly spread information and aggregate public attention, which has always been one of X’s strengths. In the Web3 era, X can leverage this characteristic from Weibo to strengthen information dissemination and social interaction functionalities, while integrating blockchain technology to provide a more transparent and decentralized platform for information sharing. Additionally, X can explore Weibo’s successful experience in content creation and user interaction, such as encouraging users to create and share high-quality content through token incentive mechanisms.
Telegram: The business DNA of Telegram is based on instant messaging tools, which has a close association with WeChat. WeChat, as a multifunctional social application, not only provides communication services but also integrates functions like payment, shopping, gaming, forming a comprehensive ecosystem. Telegram can adopt this model from WeChat while maintaining its core communication and privacy protection functionalities, by exploring more diversified services and applications. For instance, Telegram can integrate decentralized financial services (DeFi), non-fungible tokens (NFTs), and other Web3 elements on its platform to provide users with a richer and more convenient service experience. Additionally, Telegram can utilize its strong privacy protection features to provide users with a more secure and trustworthy Web3 social environment.
In conclusion, predicting the competition results between X and Telegram is not easy. ChatGPT has provided its answer, but this is just a reference.
Bold Speculation on the Future Competition between X and Telegram
The competition between X and Telegram for Web3 dominance, might witness some unexpected “black swan” events that could significantly alter the competitive landscape. Let’s imagine some events that might happen one day:
Web2 Giant Acquires Telegram: If WeChat announces the acquisition of Telegram, it would greatly change the landscape of the global social media and instant messaging market. This merger could lead to the integration of technical and market resources, posing even greater competitive pressure on X. It’s worth noting that just this September, Tencent Cloud announced its cooperation with the TON Foundation to support web applications and bots built within Telegram, and this collaboration is quietly underway.
X Announces Major Collaboration with Web3 Project: If X announces a partnership with a high-performance blockchain network like Solana or a Layer 2 solution, it could significantly enhance its competitiveness in the Web3 arena. This collaboration could involve cryptocurrency payments, integration of decentralized applications (DApps), and more. Tip: Nowadays, when you type “Web3” in X, the logo suffix for Immutable automatically appears (though this is most likely a technical bug).
Government Intervention Strengthened: Governments might enact new regulatory policies that have a significant impact on social media and cryptocurrency markets. For instance, let’s assume the U.S. government introduces new social media regulations, requiring all social platforms to rigorously review and remove content deemed as “fake news”. This might compel X to invest substantial resources in compliance, while also potentially sparking controversies about freedom of speech, affecting user activity and brand image.
Geopolitical Risks: With the influence of international situations such as the Israel-Palestine conflict and the Russia-Ukraine conflict, it might potentially affect the international image and brand reputation of Telegram and X. If they are perceived as tools of a particular country’s politics or part of information warfare, it could damage their credibility among global users. Currently, the countries with the highest market shares for Telegram are Russia, Indonesia, Malaysia, Brazil, Saudi Arabia, India, Nigeria, Egypt, and Turkey; while X is primarily dominant in countries like the United States and Europe.
Breakthrough in Technological Innovation: If X or Telegram achieves a significant technological breakthrough, it could bring about a major shift in competition. For example, if Telegram develops a new type of decentralized identity verification system based on ZK technology that can protect user privacy while providing efficient authentication services. This technological innovation might attract a user base highly sensitive to privacy, thus enhancing Telegram’s competitiveness in the social media market.
Major Security Incidents: If X or Telegram experiences a major security vulnerability or data breach, it could severely damage user trust, impacting their market position. This might also lead to significant penalties from governments and strong public criticism.
Major Partnerships: Imagine if X announces a partnership with Amazon, allowing users to directly purchase Amazon products on the X platform and make cryptocurrency payments. This would greatly enhance X’s competitiveness in the e-commerce and payment fields.
Conclusion
In the exploration of the super app competition between Telegram and X (formerly Twitter) in the Web3 era, reshaping user experience, setting new standards for privacy and security, technological innovation, and ecosystem integration may be the decisive three key elements. Telegram, with its advantages in privacy protection and security, as well as its close collaboration with the TON network, is actively exploring the possibilities of Web3. Meanwhile, under Elon Musk’s leadership, X is demonstrating ambition for diversified services and the concept of a digital bank. These initiatives challenge not only existing business models but also explore the future direction of social media.
However, despite both platforms striving to shape their Web3 visions, the future competitive landscape remains uncertain. In the future, we may see more partners joining this competition, or entirely new competitors emerging, which could change the current competitive landscape.
In summary, the super app competition between Telegram and X in the Web3 era is not only a clash of technology and business models but also a profound exploration of the future internet world. Regardless of the ultimate outcome, this competition will drive the development of the Web3 world, leading us into a more open, decentralized, secure, and user-friendly digital age.
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About Cryptogram Venture (CGV):
CGV (Cryptogram Venture) is a crypto investment institution headquartered in Tokyo, Japan. Since 2017, its fund and predecessor funds have participated in investing in over 200 projects, including the incubation of the licensed Japanese yen stablecoin JPYW. CGV is also a limited partner in several globally renowned crypto funds. Since 2022, CGV has successfully hosted two editions of the Japan Web3 Hackathon (TWSH), supported by Japan's Ministry of Education, Culture, Sports, Science and Technology, Keio University, NTT Docomo, and other institutions and experts. CGV has branches in Hong Kong, Singapore, New York, Toronto, and other locations. Additionally, CGV is a founding member of the Bitcoin Tokyo Club.
Disclaimer:
The information and materials introduced in this article are sourced from public channels, and our company does not guarantee their accuracy or completeness. Descriptions or predictions involving future situations are forward-looking statements, and any advice and opinions provided are for reference only and do not constitute investment advice or implications for anyone. The strategies our company may adopt could be the same, opposite, or unrelated to the strategies readers might speculate based on th
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