Author: Leo Deng, LK Venture

Abstract: X and Telegram are globally renowned social media platforms, exploring the competition of super applications in the Web3 era, reshaping user experience, new standards of privacy and security, technological innovation, and ecosystem integration, which will be the decisive three key elements. X and Telegram each have different strengths, 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.

TL;DR

• Discussing the potential of Web2 applications such as X and Telegram 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.

• X and Telegram have significant differences in user market distribution, main functions, innovation capabilities, business models, openness, community culture, and Web3 exploration, and their competition and cooperation may coexist in the long term.

• Reshaping user experience, new standards of privacy and security, technological innovation and ecosystem integration, and innovation in business models are the four key elements that will determine who will win the competition for the super application of Web3 between X and Telegram.

• Despite the increasingly intense competition between X and Telegram for the Web3 super application, there are still uncertainties and the final competitive landscape may present unexpected results.

• ### 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 to Web2, Web3 emphasizes user data ownership, decentralized network structures, and transparency based on blockchain technology. This not only represents a technological leap, but also heralds the innovation of network interaction 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 field reached $267 billion in 2022, while the NFT market trading volume was approximately $25 billion, highlighting the huge potential of the Web3 world.

In the Web2 era, WeChat is undoubtedly a social application giant. As of 2023, WeChat's monthly active users have exceeded 1.2 billion, making it one of the most popular social applications globally. WeChat is not only a communication tool, but also a super application that integrates functions such as payment, shopping, gaming, and mini-programs.

The success of WeChat lies in its all-encompassing ecosystem, allowing users to complete almost all daily operations on one platform. WeChat's influence is not only reflected in its user base, but also in how it has changed people's lifestyles and business models.

In this context, discussing the potential of Web2 applications such as X and Telegram 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.

Of course, other social platforms such as Facebook and Kakao also have significant opportunities to make a mark in the Web3 world. However, it appears that X and Telegram may be the first Web2 social platforms to make significant progress in the Web3 world.

As globally renowned social media platforms, X and Telegram each have unique strengths and a large user base. X is known for its widespread influence and diverse user base, while Telegram is favored by users for its high emphasis on privacy protection and security. In the wave of Web3, these two platforms are facing the challenge of adapting to the trend of decentralization and utilizing blockchain technology to innovate services and business models. These factors will determine whether they can become the WeChat-like giants in the Web3 world.

Musk has publicly praised China's WeChat multiple times, stating that "in China, you can live on WeChat, it can do everything." His vision is to create a similarly comprehensive super application, and X is the name he has given to this application.

To meet the specific needs of dating services, X may need to develop new algorithms and user interfaces. Becoming a "digital bank" would mean that X may introduce financial services such as payment processing, fund transfers, or even cryptocurrency transactions, requiring X to establish a strong security and compliance framework to ensure the security and legality of financial transactions.

Meanwhile, Pavel Durov, co-founder of Telegram, initially envisioned TON as a means to integrate cryptocurrency transactions into chats and monetize through applications. In mid-September 2023, the TON Foundation announced a formal partnership with Telegram, aiming to integrate and promote the TON network ecosystem to 800 million active Telegram users. They plan to attract and convert 30% of Telegram's active users, or 240 million users, into active TON network users by 2028. The self-hosted wallet TON Space has seamlessly integrated into Telegram, not only enhancing user experience convenience, but also potentially attracting new users interested in cryptocurrency.

In this rapidly changing digital era, it is much easier to encroach on low-frequency scenarios in high-frequency scenarios than in low-frequency scenarios. Social interaction as a super high-frequency scenario makes it much easier to penetrate financial scenarios. The key to success lies in convenience. Having users download one less application is a very clear sign of success.

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

The features we have seen on WeChat will be realized on X and Telegram. These rich ecosystems will create a strong driving force, 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. Nevertheless, at the initial stage, this is already enough to make a significant impact on the Web3 world.

By analyzing their current status, strengths, 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 the following aspects:

Large user base: X and Telegram both have a large global user base. This means that as 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 driving the popularity and acceptance of Web3.

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

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

Transformation of business models: Web3 offers a new business model, especially in terms of data ownership and user incentives. X and Telegram's exploration in these areas may open a new chapter in social media business models.

 Reshaping privacy and security: As users increasingly focus on 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 the ability of social media platforms to protect user privacy and data.

Community and decentralized governance: Web3 emphasizes the power and participation of the community. X and Telegram's experience in building and maintaining active communities may play an important role in establishing decentralized governance structures and promoting user participation.

Therefore, the development potential of X and Telegram in the Web3 world is worth paying close attention to. Their movements may have a profound impact 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 both globally renowned social media platforms, each with a large user base and extensive market distribution. They differ in their main functions, with X focusing more on public topic discussions and information dissemination, while Telegram places more emphasis on privacy protection and security. The main differences between them include:

Features

Comprehensive comparison of X and Telegram

1. X:

User Base: As of 2023, X has approximately 528 million monthly active users. It has a global user base, particularly with a large number of users in countries such as the United States, Japan, and India.

Market Distribution: X has significant influence globally, particularly prominent in Western countries. It plays an important role in politics, entertainment, and news dissemination.

Main Functions: X is known for its real-time information dissemination, public topic discussions, and high user interactivity. It also supports functions such as multimedia content sharing, live streaming, and topic tags.

Web3 Milestones:

 X has previously launched a blockchain-based NFT avatar verification feature and explored the use of cryptocurrency for tipping.

On October 29, 2023, 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 such as Russia, India, Iran, and Brazil.

Market Distribution: Telegram has users in multiple countries and regions globally, especially in areas with high demand for network privacy and security.

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

Web3 Milestones:

May - July 2023: The success of Unibot (token price increased by over 100 times in 3 months) triggered FOMO sentiment in the market. Based on the integration of artificial intelligence and social interaction, Telegram Bot covers trading, airdrops, community, and cross-chain, enriching the application scenarios of the crypto industry and bringing innovative development paths to the industry.

July 2023: Telegram introduced the "Stories" feature, allowing users to edit content by clicking the "+" icon in the lower right corner of the main interface and selecting "Create Story." Users can upload various media such as images, videos, and audio, and add text and location information. Similar to WeChat Moments, users can set filtering conditions to control which friends can see the posted content. This feature complements the product's functionality and sets the stage for Telegram to create a Web3 version of WeChat.

September 2023: The TON Foundation announced a formal partnership with Telegram, integrating the self-hosted encrypted wallet TON Space launched by TON into Telegram. From now on, all Telegram wallet users can use TON Space. The next step is to roll out this service to global Telegram users in November this year.

October 2023: The TON Foundation applied for the Guinness World Record for the "fastest blockchain" and will conduct performance testing on October 31 to demonstrate the reliability, scalability, and speed of the TON blockchain.

Four Key Elements for the Decisive Victory in the Web3 Super Application Competition

1. Reshaping User Experience:

In the Web3 world, reshaping user experience means going beyond traditional convenience and interface appeal to deeper levels of engagement and ownership.

 X: can utilize its extensive user base and rich content to incentivize users to create and share high-quality content by introducing a cryptocurrency reward mechanism. For example, offering token rewards for popular tweets or influential content creators can enhance user engagement and a sense of belonging.

Telegram: can create a more secure and private social environment by leveraging its high level of privacy protection and security. For example, by introducing blockchain-based identity verification and data storage, Telegram can provide a higher level of privacy protection and data security for users.

2. New Standards of Privacy and Security:

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

 X: needs to make more efforts in protecting user privacy and data security. For example, X can introduce decentralized data storage solutions to ensure the security and immutability of user data.

Telegram: already has inherent advantages in privacy and security and can further strengthen this advantage, for example, by introducing a blockchain-based decentralized identity verification system to provide a higher level of user privacy protection.

3. Technological Innovation and Ecosystem Integration:

Technological innovation and integration with a broader ecosystem are key in the Web3 world.

 X: can enrich its platform's functionality and user experience by collaborating with other Web3 projects and services. For example, X can integrate DeFi services or NFT markets, allowing users to participate in financial activities or digital art trading while engaging in social interactions.

 Telegram: has the potential to deeply integrate with a broader Web3 ecosystem due to its openness and flexibility.

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 decentralized exchange (Dex) accounting for nearly half of the total value locked (Tvl) at 4.87 million USD.

As a public chain with a circulating market value of up to 3 billion USD, Ton's Tvl is only around 10 million USD. While this data may be unsatisfactory, it also presents significant opportunities, especially for developers. Developers have ample time and space to explore potential opportunities in the ecosystem. The Ton project team has also realized this and actively attracts more developers to participate through hackathons and support funds.

However, Ethereum's L2 ecosystem has demonstrated strong network effects, with significant advantages in infrastructure completeness, application ecosystem diversity, application innovation, and fund size. Interest in new public chains seems to be waning. If Ethereum's L2 ecosystem can achieve significant breakthroughs in large-scale applications, this may reduce the attractiveness of the TON ecosystem or affect the development of Telegram's Web3 ecosystem.

4. Innovation in Business Models:

For social media platforms, it is important to explore new revenue sources and growth points while maintaining user stickiness.

X: As of 2023, X's financial data shows that its main 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 approximately 4 billion USD. In addition, X also generates revenue through data licensing and other services, which, although a small proportion, still brings in hundreds of millions of dollars in revenue for the company. X is 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 globally. 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, approximately 104 million USD. In comparison, Bilibili, with only a quarter of Telegram's monthly active users, had nearly 700 million USD in advertising revenue in 2022.

5. Impact of Business DNA

In the competition to explore the Web3 era's super applications, the business DNA of X and Telegram will significantly influence their development trajectory.

X: X's business DNA is very similar to social sharing platforms like Weibo. For example, as a public platform focused on information dissemination and social interaction, this aligns with X's original intention and development direction. Weibo's success lies in its ability to rapidly disseminate information and gather public attention, which has been a strong suit for X.

In the Web3 era, X can leverage this characteristic from Weibo to strengthen information dissemination and social interaction functionality, while integrating blockchain technology to provide a more transparent and decentralized information sharing platform. Additionally, 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 instant messaging tools, closely related to WeChat. As a multifunctional social application that provides communication services and integrates payment, shopping, and gaming, forming a comprehensive ecosystem.

Telegram can adopt this model from WeChat to explore more diversified services and applications while maintaining its core communication and privacy protection functionality. For example, Telegram can integrate Web3 elements such as decentralized finance (DeFi) and non-fungible tokens (NFTs) on its platform to provide users with a richer and more convenient service experience. Additionally, Telegram can leverage 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 only a reference.

Bold Speculation on the Future Competition Outcome of X and Telegram

The competition between X and Telegram for the Web3 WeChat may see some unexpected "black swan" events that could significantly change the competitive landscape. If we open our minds a bit, let's imagine an event that might happen one day:

Acquisition of Telegram by Web2 Giants: If WeChat announces the acquisition of Telegram, it would greatly change the global social media and instant messaging market landscape. This merger could bring about the integration of technology and market resources, posing even greater competitive pressure on X. It's worth noting that as early as September this year, Tencent Cloud has officially announced a partnership with the TON Foundation to support the development of web applications and bots within Telegram, and both parties are quietly working on this collaboration.

 Major Collaboration with Web3 Projects by X: If X announces a collaboration with a high-performance blockchain network such as Solana or an L2, it could significantly enhance its competitiveness in the Web3 domain. This collaboration may involve cryptocurrency payments, integration of decentralized applications (DApps), and more. Tip: Nowadays, when you type "Web3" in the body of X, the logo of Immutable will automatically appear as a suffix (of course, this is most likely 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, if the US government introduces new social media regulations requiring all platforms to strictly review and remove content deemed as "fake news," this may force X to invest significant resources to comply with these regulations, while also sparking controversies over freedom of speech, affecting user activity and brand image.

Geopolitical Risks: With the impact of international situations such as the Israel-Palestine war, the Russia-Ukraine war, etc., it may affect the international image and brand reputation of Telegram and X. If they are seen as a political tool of a certain country or part of information warfare, 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, etc.; while X is mainly dominant in the United States and European countries.

Technological Innovation Breakthrough: If X or Telegram achieves a significant technological innovation, it could bring about a major shift in the competition. For example, if Telegram develops a new decentralized identity verification system based on ZK technology that can protect user privacy while providing efficient identity verification services, it could attract privacy-sensitive user groups and enhance Telegram's competitiveness in the social media market.

Major Security Events: If X or Telegram experiences a major security vulnerability or data breach, it could severely damage user trust, impact their market position, and potentially lead to government penalties and public criticism.

Significant 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 fields.

Conclusion

In the exploration of the super application competition between Telegram and X (formerly Twitter) in the Web3 era, the reshaping of user experience, new standards of privacy and security, technological innovation, and ecosystem integration may become the decisive three key elements. With its advantage in privacy protection and security, as well as close collaboration with the TON network, Telegram is actively exploring the possibilities of Web3. Under Musk's leadership, X is showing ambition in diversifying services and the concept of digital banking. These initiatives not only challenge existing business models but also explore the future direction of social media development.

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, which could change the current competitive landscape.

In conclusion, the super application competition between Telegram and X in the Web3 era is not only a contest of technology and business models but also a profound exploration of the future internet world.

Regardless of the final 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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