Telegram is one of the most popular messaging apps with over 200 million app users. The company behind the said app is now venturing into the crypto market with one of perhaps the most ambitious token sale in cryptocurrency’s history. Telegram is proposing the creation of the Telegram Open Network (TON), a platform that would offer decentralized online communication packaged with premium services like file sharing (TON Storage) and private anonymous browsing (TON Proxy). These premium features can be bought with the use of the network’s in-house cryptocurrency token, “Gram.”
The Telegram ICO sought to raise an estimated $1.2 billion. This is set to become one of the biggest token sales. The previous holder of the title was Filecoin, raising 257 million during its ICO phase. Telegram is also considered as one of the most mainstream companies (relative to its size and market influence) to issue a token.
The Telegram gained a lot of attention not just from the media and public but also from hedge fund managers. Rumors of Telegram’s ICO only began on the first week of Januaryin Russia. It was later on reported by TechCrunch.
Telegram had been citedas the favored messaging platform by those involved in cryptocurrency. It is considered as a very secure and intuitive. So it is expected that the Telegram ICO would receive a lot of attention from cryptocurrency industry.
The ICO’s crowdfunding goal is to raise $500 t0 $600 million during the presale and raise the remaining $600 to $700 million in the crowdsale. The minimum presale investment is set at $1 million with a high cap on proceeds. Overall, 5 billion grams would be released. About 52 percent would go to the TON Reserve, 44 percent would be sold during the ICO crowdsale and 4 percent would be reserved to Telegram’s team. There is a one-year Gram token lockup (with 60 percent discount) and a four-year vesting period for the Telegram team’s share.
The presale was scheduled forthe first quarter of 2018 with 1 Gram token priced at $0.1000.The presale occurred in February as stated by the SEC filing of Telegram’s CEO Pavel Durov. Telegram ICOsurpassed its presale goal of raising $600 to $700 million after they were able to raise $850 million from 81 accredited investors.
It is expected that Telegram ICO’s goal of raising $1.2 billion would be extended to $2 billion. There was a rumored exclusive second presale but Telegram declined to comment about this.
A Simple Agreement for Futures Tokens (SAFT) structure was enacted. This structured ensures that the ICO won’t get in trouble with SEC laws. The crowdfunding is first established before the network itself. Only accredited investors are asked to contribute and the Gram tokens would be delivered later on and resold to the public. The Gram token is expected to be converted and delivered to SAFT investors by the fourth quarter of 2018.
But even with Telegram ICO’s high ambition, some prospective investors are steering clear from the token sale. Kyle Samani, Multicoin Capital’s co-founder and Managing Partner has this to say about the ICO, “This is like Elon Musk-level ambition.”But he declined to invest in the ICO. “My concern as an investor is thefocus and diluted effort,”Samani said during an interview with CoinDesk. Samani explained that Telegram ICO’s scope is too broad and the issues it wants to solve have already been addressed by other ICOs.
Even with this trepidation, Telegram ICO is set to meet their goal, gaining the support of not only venture capital firms (Sequoia Capital and Benchmark) but also the giants in the investment scene (Yurii Milner, a Russian venture capitalist was said to be one of these investors). The support of the cryptocurrency community was also unprecedented as the demand for the Gram token rose. Some pre-sale investors were said to be selling their Gram token allocation for more than double the Gram token’s price. This is not surprising as the Gram token’s total potential value is expected to be about $3.5 billion.
The Telegram ICO Primer and Technical Whitepaper
Telegram’s 23-page ICO primer and technical whitepaperwereinitially released only to investors. In the primer,Telegram described how the blockchain technology resembles an outdated automobile: admired but inefficient and complicated for average use. This is cited as areason why for cryptocurrency’s failure to break into mainstream success. Telegram believes that they have what it takes to create a decentralized counterpart to fiat currency.
This primer also went to explain that the Telegram Open Network (TON) is a blockchain protocol designed to facilitate in peer-to-peer cryptocurrency transactions and purchases. The network aims to simplify micropayment exchanges between users and bots – something that is yet to be accomplished through blockchain. TON’s protocol would be integrated with Telegram’s app.
Aside from this functionality, TON includes services like the TON Storage, TON Proxy, TON services, and TON DNS. The TON Storage is a file-storage technology backed by the TON P2P Network. The storage technology uses torrent-like access capabilities in storing arbitrary files. The TON Proxy, on the other hand, creates a decentralized VPN paired with a blockchain-powered TOR-like technology. The TON Services is an umbrella platform for third-party services that enable intuitive interfaces for decentralized smart contracts, apps, and browsing. Finally, the TON DNS assigns readable names to smart contracts, network nodes, account names and other services.
A roadmap was available, revealing that aside from the expected conversion of the SAFTs to grams in the fourth quarter, an initial product, “External Secure ID,” will be released in the first quarter of 2018, probably shortly after the Gram token sale. An MVP TON version will also be released in the second quarter of 2018. Other products will only be rolled out in the first quarter of 2019. And by 2021, Telegram would shift the TON project’s status as anon-profit foundation.
Telegram ICO Final Thoughts
A lot of prospective investors shy away from the Telegram ICO because of the hype it was able to amass. But even with this, Telegram’s TON ICO has a lot of promise especially with the way they plan to implement the TON blockchain and TON services. Telegram started as a self-funded startup, entering an already crowded chat market so it won’t be a stretch for the Telegram ICO to actually perform well even when similar implementations of the blockchain technology already exist.