LK Venture Research Report | Telegram vs Twitter Who will dominate the super application race in the Web3 era?

LK Venture Research Report | Telegram vs Twitter Who Will Emerge as the Dominant Super Application in the Age of Web3?

Original Author: LeoDeng

Abstract: X and Telegram are globally renowned social media platforms that are exploring in the race for super applications in the Web3 era. The reshaping of user experience, new standards for privacy and security, technological innovation and ecosystem integration will be the three key factors that determine the winner. X and Telegram each have their own advantages, with X focusing on public topic discussions and information dissemination, while Telegram places more emphasis on privacy protection and security. This competition will drive the development of the Web3 world, leading us into a more open, decentralized, secure, and user-friendly digital era.

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l Exploring the potential of X, Telegram, and other Web2 applications in the Web3 world is not only an exploration of the future development of these social platforms, but also a prediction of the new pattern and order of the future Web3 world.

l There are obvious differences between X and Telegram in terms of user market distribution, main functions, innovation capabilities, business models, openness, community culture, and Web3 exploration. Their competition and cooperation may coexist for a long time.

l The four key elements for X and Telegram to win the competition for Web3 super applications are the reshaping of user experience, new standards for privacy and security, technological innovation and ecosystem integration, and the innovation of business models.

l Despite the escalating competition between X and Telegram in the field of Web3 super applications, there are still uncertainties and unexpected outcomes in the final competition pattern.

The encrypted evolution of Web2 social giants may bring a new order to the Web3 world.

Web3, as the representative of the next generation of the Internet, marks a significant shift from centralization to decentralization. Compared with Web2, Web3 emphasizes user data ownership, decentralized network structure, and transparency based on blockchain technology. This not only represents a leap in technology, but also heralds the innovation of network interaction methods and business models.

For example, the rise of decentralized finance (DeFi) and non-fungible tokens (NFT) is a practical manifestation of the Web3 concept. According to DappRadar data, the TVL peak in the DeFi field reached $267 billion in 2022, while the NFT market transaction volume was approximately $25 billion, highlighting the enormous potential of the Web3 world.

In the Web2 era, WeChat is undoubtedly the giant of social applications. As of 2023, WeChat has surpassed 1.2 billion monthly active users, becoming one of the most popular social apps in the world. WeChat is not only a communication tool but also a super app that integrates functions such as payment, shopping, gaming, and mini-programs.

The success of WeChat lies in its comprehensive ecosystem, which allows users to complete almost all daily operations on one platform. The influence of WeChat is not only reflected in the number of users, but also in the way it has changed people’s lifestyles and business models.

In this context, exploring the potential of Web 2 applications like X and Telegram in the Web 3 world is not only an exploration of the future development of these social platforms, but also a prediction of the new pattern and order of the future Web 3 world.

Of course, other social platforms like Facebook and Kakao also have great potential in the Web 3 world, but currently, X and Telegram may be the first Web 2 social platforms to achieve success in the Web 3 world.

X and Telegram, as globally renowned social media platforms, each have unique advantages and a large user base. X is known for its wide-ranging influence and diverse user groups, while Telegram is favored by users for its high regard for privacy protection and security. In the wave of Web 3, these two platforms are facing the challenge of how to adapt to the decentralized trend and how to utilize blockchain technology to innovate services and business models. These factors will be crucial in determining whether they can become giants like WeChat in the Web 3 world.

Musk has repeatedly praised WeChat in China, stating that “in China, you can live in WeChat, it can do everything.” His vision is to create a super app with the same comprehensive functionality, and X is his chosen name for this app.

In order to adapt to the specific needs of dating services, X may need to develop new algorithms and user interfaces. Becoming a “digital bank” could mean that X may introduce financial services such as payment processing, fund transfers, or even cryptocurrency transactions, which would require X to establish a strong security and compliance framework to ensure the security and legality of financial transactions.

Meanwhile, LianGuaiVel Durov, co-founder of Telegram, initially envisioned TON as a means of integrating cryptocurrency transactions into chats and monetizing them through in-app currencies. In mid-September 2023, the TON Foundation announced its official collaboration with Telegram, aiming to integrate and promote the TON network ecosystem to Telegram’s 800 million active users. They plan to attract and convert 30% of Telegram’s active users by 2028, which is 240 million users, into active TON network users. The TON wallet with self-hosted space has seamlessly integrated into Telegram, which not only enhances user experience convenience but also attracts new users interested in cryptocurrencies.

In this rapidly changing digital age, it is much easier to encroach on low-frequency scenes in high-frequency scenes than the other way around. As a highly frequent scene, the difficulty of permeating the financial scene with social elements is much lower than adding financial elements to social scenes. The key to success lies in convenience. Allowing users to download one fewer application is a very obvious sign of success.

X and Telegram are both striving to achieve this goal, but their paths and strategies are different. Over time, we will see which platform can better adapt to the trend of Web3 and ultimately become the leader of this new era.

The features we have seen on WeChat will be implemented on X and Telegram. These rich ecosystems will create powerful momentum, significantly increasing the stickiness and usage time of X and Telegram users. 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 already enough to deliver a blow to the lower levels, impacting the Web3 world.

By analyzing their current status, advantages, challenges, and future possibilities, we can better understand the development trends and business opportunities of social media in the Web3 era, including but not limited to:

——Massive user base: X and Telegram both have a huge global user base. This means that when they transition to Web3, they have the potential to bring hundreds of millions of users into the Web3 ecosystem. This scale of user migration is crucial for promoting the popularity and acceptance of Web3.

——Influence and brand awareness: As globally renowned social media platforms, X and Telegram have great brand influence. Their adoption and promotion of Web3 may have a significant impact on public awareness and attitude towards Web3.

——Potential for innovation and technology integration: X and Telegram both have a history of implementing technological innovation and integrating new technologies. Their activities in the Web3 field may bring new technological breakthroughs, such as in decentralization, data security, and user experience.

——Shift 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 may usher in a new chapter in social media business models.

——Reshaping privacy and security: As users become increasingly concerned about privacy and data security, Telegram has already established a reputation in this area. The development of X and Telegram in the Web3 field may further strengthen social media platforms’ ability to protect user privacy and data.

——Community and decentralized governance: Web3 emphasizes the power and participation of communities. X and Telegram’s experience in building and maintaining active communities may play a significant role in building decentralized governance structures and promoting user participation.

Therefore, the development potential of X and Telegram in the Web3 world deserves great attention. Their actions may have profound effects on the entire Web3 ecosystem and even the future development of the Internet.

Basic Information and Competitive Analysis of X and Telegram

X and Telegram are globally renowned social media platforms, each with a huge user base and extensive market distribution. They differ in their main functionalities, with X focusing more on public topic discussions and information dissemination, while Telegram prioritizes privacy protection and security. The main differences between the two include:

Characteristics

X vs. Telegram Comparison

1. X:

User base: As of 2023, X has approximately 528 million monthly active users. Its users are spread worldwide, with a large user base particularly in countries like the United States, Japan, and India.

Market distribution: X has significant influence globally, with Western countries being especially prominent. It plays an important role in politics, entertainment, and news dissemination.

Main features: X is renowned for its real-time information dissemination, public topic discussions, and high user interactivity. It also supports multimedia content sharing, live streaming, and topic tagging.

Web3 highlights:

——X has previously launched a blockchain-based NFT avatar verification feature and explored the functionality of tipping with cryptocurrency.

——On October 29, 2023, Elon Musk announced X’s vision, expecting it to become a “mature” dating website and a “digital bank” by 2024.

2. Telegram:

User base: Telegram has over 70 million monthly active users. It is particularly popular in countries like Russia, India, Iran, and Brazil.

Market distribution: Telegram has users in multiple countries and regions worldwide, with higher popularity in areas with a greater demand for network privacy and security.

Main features: Telegram is known for its high privacy protection and security. It supports end-to-end encrypted private chats, large-scale groups and channels, as well as file sharing.

Web3 highlights:

——From May to July 2023, the success of Unibot (with token price surges of over 100% within 3 months) triggered FOMO sentiment in the market. Based on the integration of artificial intelligence and social interaction, Telegram Bot covers multiple areas including trading, airdrops, communities, and cross-chain, enriching the application scenarios within the crypto industry and bringing innovative development paths.

——In July 2023, Telegram introduced the “Stories” feature, where users can create and edit content by clicking the “+” icon at the bottom right of the main interface. It supports uploading various media types such as images, videos, and audio, and allows users to add text and location information. Similar to WeChat Moments, users can set filtering conditions to control which friends can see their posted content. This feature fills in the functional gap and sets the foundation for Telegram’s future development of a Web3 version of WeChat.

——In September 2023, the TON Foundation announced an official partnership with Telegram, integrating the self-hosted cryptocurrency wallet TON SLianGuaice. All Telegram wallet users can now start using TON SLianGuaice. The next step is to globally launch this service to all Telegram users in November of this year.

——In October 2023, the TON Foundation applied for the Guinness World Record for the “fastest blockchain” and will initiate performance testing on October 31st to showcase the reliability, scalability, and speed of the TON blockchain.

Four Key Elements for the Ultimate Web3 Super App Competition

1. Revamping User Experience:

In the Web3 world, revamping user experience means going beyond traditional convenience and aesthetic appeal, and focusing on deeper engagement and ownership.

—X: By leveraging its extensive user base and rich content, X can incentivize users to create and share high-quality content by introducing cryptocurrency reward mechanisms. For example, providing token rewards for popular tweets or influential content creators can enhance user engagement and a sense of ownership.

—Telegram: By utilizing its strong privacy protection and security, Telegram can establish a more secure and private social environment. For instance, implementing blockchain-based identity verification and data storage, Telegram can offer users a higher level of privacy protection and data security.

TON achieves a better user experience by implementing the “infinite sharding paradigm” to meet the goal of future millions of TPS (Source: Beosin)

2. New Standards for Privacy and Security:

In the Web3 era, privacy and security will be important factors for users when choosing social platforms.

—X: More efforts need to be made in 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: Telegram already has inherent advantages in privacy and security, which can be further enhanced. For example, by introducing a blockchain-based decentralized identity verification system, Telegram can provide a higher level of user privacy protection.

TON has significant advantages compared to Ethereum and Bitcoin networks in fault tolerance and redundant storage

3. Technological Innovation and Ecosystem Integration:

Technological innovation and integration with a broader ecosystem are crucial in 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 participate in financial activities or digital art transactions while engaging in social interactions.

—Telegram: With its openness and flexibility, Telegram has the potential for deep integration with a wider Web3 ecosystem.

According to the latest data from ton.app, the Ton ecosystem currently has over 550 applications, but only 7 applications are listed on DefiLlama, with the top-ranked decentralized exchange (Dex) accounting for nearly half of the total value locked (Tvl), reaching 4.87 million US dollars.

As a public chain with a market capitalization of up to 3 billion US dollars, Ton’s Tvl is only around 10 million US dollars. Although this data may be disappointing, it also presents a significant opportunity, especially for developers. Developers have ample time and space to explore potential opportunities within the ecosystem. Meanwhile, the Ton project team has recognized this and actively attracted more developers’ participation through hackathon events and the launch of support funds.

However, the L2 ecosystem of Ethereum has already demonstrated strong network effects, with clear advantages in terms of infrastructure, diversity of application ecosystems, innovation in applications, and scale of funds. The market seems to be losing interest in new public chains. If the Ethereum L2 ecosystem can achieve significant breakthroughs in large-scale applications, this may reduce the attractiveness of the TON ecosystem and may affect the development of Telegram’s Web3 ecosystem.

4. Innovation in business models:

For social media platforms, they need to explore new sources of revenue and growth while maintaining user stickiness.

——X: As of 2023, X’s financial data shows that its main source of revenue is still advertising, which accounts for the vast majority of total revenue. According to the 2022 financial report, X’s advertising revenue reached approximately $4 billion. In addition, X generates revenue through data licensing and other services, which, although a small proportion, also 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 establishment in 2013, Telegram has grown into a product with over 800 million monthly active users worldwide. However, its revenue scale does not match its user base. Currently, apart from standard subscription services, Telegram’s revenue mainly comes from limited advertising. According to data, Telegram’s advertising revenue in 2022 was only 10 billion rubles, equivalent to approximately $104 million. In comparison, Bilibili, which has only a quarter of Telegram’s monthly active users, had nearly $700 million in advertising revenue in 2022.

5. Influence of business DNA:

In the race to explore the super applications of the Web3 era, the business DNA of X and Telegram will have a significant impact on their development trajectories.

——X: X’s business DNA is very similar to social sharing platforms like Weibo. Taking Weibo as an example, as an open platform with information dissemination and social interaction at its core, it aligns highly with X’s original intention and development direction. The success of Weibo lies in its ability to rapidly disseminate information and gather public attention, which has always been X’s strong suit.

In the Web3 era, X can learn from this characteristic of Weibo to strengthen the functions of information dissemination and social interaction while integrating blockchain technology to provide a more transparent and decentralized platform for sharing information. In addition, X can explore Weibo’s successful experiences in content creation and user interaction, such as encouraging users to create and share high-quality content through token incentive mechanisms.

——Telegram: Telegram’s business DNA is based on IM tools, which has a close association with WeChat. WeChat, as a multifunctional social application, not only provides communication services but also integrates payment, shopping, gaming, and other functions, forming a comprehensive ecosystem.

Telegram can learn from this model of WeChat to explore more diversified services and applications while maintaining its core communication and privacy protection functions. For example, Telegram can integrate Web3 elements such as decentralized finance (DeFi) and non-fungible tokens (NFTs) into its platform to provide users with a richer and more convenient service experience. At the same time, Telegram can utilize its strong privacy protection features to provide users with a more secure and trustworthy Web3 social environment.

In summary, predicting the outcome of the competition between X and Telegram is not easy. ChatGPT gives its answer, of course, this is just a reference.

Bold speculation on the future competition between X and Telegram

There may be some unexpected “black swan” events in the competition between X and Telegram over Web3 WeChat, which could significantly change the competitive landscape. If we let our imagination run wild, let’s consider an event that could happen one day:

– Web2 giants acquire Telegram: If WeChat announces the acquisition of Telegram, it would greatly change the global social media and instant messaging market. This merger could lead to the integration of technology and market resources, thus posing greater competitive pressure on X. It is worth noting that it was only in September of this year that Tencent Cloud announced its partnership with the TON Foundation to support the Web applications and bots built within Telegram, and both sides are quietly carrying out their cooperation.

– X announces a major collaboration with a Web3 project: If X announces a collaboration with a high-performance blockchain network like Solana or some L2, it could greatly enhance its competitiveness in the Web3 field. This collaboration may involve cryptocurrency payments, integration of decentralized applications (DApps), and more. Tip: Nowadays, when you type “Web3” in an X article, the Immutable logo suffix will automatically appear (although this is probably just a technical bug).

– Increased government intervention: Governments may introduce new regulatory policies that have a significant impact on social media and cryptocurrency markets. For example, let’s assume that the U.S. government introduces new social media regulatory policies that require all social platforms to rigorously review and delete content considered as “fake news.” This may force X to allocate a considerable amount of resources to comply with these regulations, while also potentially causing controversies over freedom of speech, which could affect user activity and brand image.

– Geopolitical risks: With the impact of international situations such as the Israel-Palestine conflict and the Russia-Ukraine conflict, it may also affect the international image and brand reputation of Telegram and X. If they are seen as political tools or part of information warfare for a particular country, it could damage their reputation among global users. Currently, the countries with the highest market share for Telegram are Russia, Indonesia, Malaysia, Brazil, Saudi Arabia, India, Nigeria, Egypt, Turkey, while X is mainly focused on the United States and Europe.

– Technological innovation breakthrough: If X or Telegram achieves some significant technological innovation, it could bring about a major transformation in the competition. Let’s assume that Telegram develops a new type of decentralized identity verification system based on ZK technology, which can provide efficient identity verification services while protecting user privacy. This technological innovation may attract a group of users highly sensitive to privacy, thereby enhancing Telegram’s competitiveness in the social media market.

——Major Security Incidents: If X or Telegram encounters major security vulnerabilities or data breaches, it could severely damage user trust and impact their market position; it may also incur heavy penalties from the government 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 e-commerce and payment sectors.

Conclusion

In the race for super applications in the Web3 era between Telegram and X (formerly Twitter), the reshaping of user experience, new standards for privacy and security, technological innovation, and ecosystem integration may become the decisive factors. With its focus on privacy protection and security advantages, as well as close collaboration with the TON network, Telegram is actively exploring the possibilities of Web3. On the other hand, X, under the leadership of Musk, demonstrates ambition in diversified services and the concept of digital banking. These actions not only challenge existing business models but also explore the future direction of social media development.

However, despite the efforts of both platforms to shape their Web3 visions, the future competition landscape remains uncertain. In the future, we may see more partners joining this race or completely new competitors emerging, which could change the current competitive landscape.

In summary, the race between Telegram and X for super applications in the Web3 era is not only a competition 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 and lead us into a more open, decentralized, secure, and user-friendly digital age.

(**ChatGPT also contributed to the content of this article)

| About LK Venture:

LK Venture is an encrypted investment and research institution focusing on the Web3 field under Blueport Interactive (08267.HK), formerly known as Consensus Lab. It focuses on investing in cutting-edge infrastructure, trading platforms, technical protocols, and financial tools in the market. It has invested in more than 100 projects from North America, Asia, Europe, and other regions, including FTX, Polkadot, Filecoin, Casperlabs, Coin98, and more.

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The information and materials presented in this article are sourced from public channels, and our company makes no guarantees regarding their accuracy and completeness. Descriptions and predictions regarding future situations are forward-looking statements, and any suggestions and opinions provided are for reference only and do not constitute investment advice or implication for any individual. The strategies that our company may adopt may be the same, opposite, or unrelated to the strategies inferred by readers based on this article.

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