Telegram VS X: Who Will Dominate the Super App Competition in the Web3 Era?

Author: Leo Deng, LK Venture

Abstract: X and Telegram are globally recognized social media platforms that are exploring the super app competition in the Web3 era. The reshaping of user experience, new standards for privacy and security, and technological innovation and ecosystem integration will become the three key factors for victory. X and Telegram each have different advantages; X focuses on public topic discussions and information dissemination, while Telegram emphasizes 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 age.

TL;DR

• Discussing the potential of Web2 applications like 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 patterns and orders in the future Web3 world.
• There are significant differences between X and Telegram in 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.
• The reshaping of user experience, new standards for privacy and security, technological innovation and ecosystem integration, and innovation in business models are the four key factors determining which platform will win the Web3 super app competition.
• Although the competition between X and Telegram around Web3 super apps is becoming increasingly intense, there are still uncertainties, and the final competitive landscape may present unexpected results.

The Crypto Evolution of Web2 Social Giants May Bring a New Order to the Web3 World

Web3, as a 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 a revolution in the way we interact online and in business models.

For example, the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs) is a manifestation of the Web3 concept in practice. According to DappRadar data, the peak Total Value Locked (TVL) in the DeFi sector reached $267 billion in 2022, while the NFT market transaction volume was about $25 billion, highlighting the immense potential of the Web3 world.

In the Web2 era, WeChat is undoubtedly the giant of social applications. 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 app that integrates payment, shopping, gaming, mini-programs, and more.

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

In this context, discussing the potential of Web2 applications like 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 patterns and orders in the future Web3 world.

Of course, other social platforms like Facebook and Kakao also have significant space to make strides in the Web3 world, but currently, X and Telegram seem to be the Web2 social platforms that may achieve the first breakthroughs in the Web3 world.

As globally recognized social media platforms, X and Telegram each have unique advantages and large user bases. X is known for its broad influence and diverse user demographics, while Telegram is favored by users for its strong emphasis on privacy protection and security. In the wave of Web3, these two platforms face the challenge of how to adapt to the trend of decentralization and how to leverage blockchain technology to innovate services and business models. These factors will be crucial in determining whether they can become the WeChat giants in the Web3 world.

Elon Musk has publicly praised China's WeChat multiple times, believing that "one can live in WeChat in China; it can do everything." His vision is to create a similarly comprehensive super app, which is what he named X.

To cater to the specific needs of dating services, X may need to develop new algorithms and user interfaces. Becoming a "digital bank" would mean that X might introduce financial services such as payment processing, fund transfers, or even cryptocurrency trading, which 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 chat and monetize through the application. In mid-September 2023, the TON Foundation announced a formal partnership 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, or 240 million users, into active users of the TON network by 2028. The self-custody wallet TON Space has been seamlessly integrated into Telegram, enhancing user experience convenience and potentially attracting new users interested in cryptocurrency.

In this rapidly changing digital age, encroaching on low-frequency scenarios in high-frequency scenarios is much easier than encroaching on high-frequency scenarios in low-frequency ones. As a super high-frequency scenario, social interaction's penetration into financial scenarios is far less challenging than adding social elements to financial scenarios. The key to success lies in convenience. Reducing the need for users to download an additional app is a very clear sign of success.

Both X and Telegram are striving to achieve 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 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 form a powerful momentum, 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. Nevertheless, in the early stages, this is already sufficient to create a dimensionality-reducing impact on 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 the following aspects:

Large User Base: Both X and Telegram have a vast 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. Such a scale of user migration is crucial for promoting the popularity and acceptance of Web3.

Influence and Brand Recognition: As globally recognized social media platforms, X and Telegram have significant brand influence. Their adoption and promotion of Web3 could significantly impact public perception and attitudes toward 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 space could lead to 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 could open a new chapter in social media business models.

Reconstruction of 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 space may further enhance social media platforms' capabilities in protecting 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 an important role in constructing decentralized governance structures and promoting user participation.

Therefore, the development potential of X and Telegram in the Web3 world deserves significant attention. 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 recognized social media platforms, each with a large user base and extensive market distribution. They differ in their main functions; X focuses more on public topic discussions and information dissemination, while Telegram places greater emphasis on privacy protection and security. The main differences between the two include:

Features

Comprehensive Comparison of X and Telegram

1. X:

User Base: As of 2023, X has approximately 528 million monthly active users. Its users are spread globally, with a significant number in countries like the United States, Japan, and India.

Market Distribution: X has significant influence worldwide, particularly 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 multimedia content sharing, live streaming, and hashtags.

Web3 Milestones:

X has 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 site 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 many countries and regions worldwide, especially in areas with high demand for online privacy and security.

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

Web3 Milestones:

In May to July 2023, the success of Unibot (with a token price increase of over 100 times in three months) triggered FOMO in the market. Based on the integration of AI and social features, Telegram Bot covers various fields such as trading, airdrops, communities, and cross-chain, enriching the application scenarios in the crypto industry and bringing innovative development paths to the crypto sector.

In July 2023, Telegram launched 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." This supports uploading various media such as images, videos, and audio, and allows adding text and location information. Similar to WeChat Moments, users can set filtering conditions to control which friends can see the published content. This fills a functional gap for Telegram in building a Web3 version of WeChat.

In September 2023, the TON Foundation announced a formal partnership with Telegram, integrating the self-custody crypto wallet TON Space into Telegram, allowing all Telegram wallet users to use TON Space starting immediately. The next step is to launch this service to global Telegram users in November this year.

In October 2023, the TON Foundation applied to the Guinness World Records for the "fastest blockchain," with performance testing set to begin on October 31, showcasing the reliability, scalability, and speed of the TON blockchain.

Four Key Factors for Winning the Web3 Super App 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 leverage its extensive user base and rich content by introducing cryptocurrency reward mechanisms to incentivize users to create and share high-quality content. For example, providing token rewards for popular tweets or influential content creators can enhance users' sense of engagement and belonging.

Telegram: Can utilize its high level of privacy protection and security to create a safer and more private social environment. For instance, by introducing blockchain-based identity verification and data storage, Telegram can offer users a higher level of privacy protection and data security.

TON aims to achieve the goal of millions of TPS by implementing the "infinite sharding paradigm," bringing a better user experience (Source: Beosin)

2. New Standards for Privacy and Security:

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

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

Telegram: Already has an inherent advantage in privacy and security, which can be further strengthened, such as by introducing a blockchain-based decentralized identity verification system to provide a higher level of user privacy protection.

Comparison of TON with Ethereum and Bitcoin networks, showing clear advantages in fault tolerance, redundant storage, etc.

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 functions and user experience by collaborating with other Web3 projects and services. For example, X could 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, has the potential for deep integration with a broader 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 decentralized exchange (Dex) accounting for nearly half of the total value locked (TVL), reaching $4.87 million.

As a public chain with a circulating market value of $3 billion, Ton's TVL is only about $10 million. Although this data is not satisfactory, it also contains enormous opportunities, 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 is actively attracting more developer participation through hackathons and support funds.

However, Ethereum's L2 ecosystem has already demonstrated strong network effects, with clear advantages in infrastructure completeness, application ecosystem diversity, application innovation, and funding scale. Market interest in new public chains seems to be waning. If the Ethereum L2 ecosystem can achieve significant breakthroughs in large-scale applications first, this may reduce the attractiveness of the TON ecosystem and potentially impact Telegram's Web3 ecosystem development.

4. Innovation in Business Models:

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

X: As of 2023, X's financial data shows that its primary source of revenue remains advertising, which accounts for the vast majority of total revenue. According to 2022 financial reports, X's advertising revenue reached approximately $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. X is also actively exploring new revenue channels, including launching subscription services, enhancing e-commerce features, and integrating cryptocurrency payments.

Telegram: Since its establishment in 2013, Telegram has developed 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 reports, Telegram's advertising revenue in 2022 was only 10 billion rubles, approximately $10.4 million. In contrast, Bilibili, with only a quarter of Telegram's monthly active users, had nearly $700 million in advertising revenue in 2022.

5. Impact of Business Genes

In exploring the super app competition in the Web3 era, the business genes of X and Telegram will significantly influence their development trajectories.

X: The business gene of X is very similar to social sharing platforms like Weibo. For example, Weibo, as a public platform centered on information dissemination and social interaction, aligns closely 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 always been a strong point for X.

In the Web3 era, X can leverage this characteristic of Weibo to enhance information dissemination and social interaction functions 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: The business gene of Telegram is based on IM tools, closely related to 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 draw on this model from WeChat, exploring more diversified services and applications while maintaining its core communication and privacy protection functions. For example, Telegram could integrate decentralized financial services (DeFi), non-fungible tokens (NFTs), and other Web3 elements into its platform, providing users with a richer and more convenient service experience. At the same time, Telegram can utilize its strong privacy protection features to offer users a more secure and trustworthy Web3 social environment.

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

Bold Speculation on the Future Competition Between X and Telegram

The competition between X and Telegram over Web3 WeChat may see some unexpected "black swan" events that could significantly alter the competitive landscape. If we think outside the box, we might imagine events that could occur one day:

Web2 Giant Acquires Telegram: If WeChat announces the acquisition of Telegram, it would greatly change the global social media and instant messaging market landscape. Such a merger could lead to the integration of technological and market resources, thereby posing greater competitive pressure on X. It is worth noting that just this September, Tencent Cloud announced a partnership with the TON Foundation to support Web applications and bots built within Telegram, and their cooperation is quietly underway.

X Announces Major Cooperation with Web3 Projects: If X announces a partnership with a high-performance blockchain network like Solana or some L2, it could significantly enhance its competitiveness in the Web3 space. This cooperation might involve cryptocurrency payments, integration of decentralized applications (DApps), etc. Tip: Nowadays, when you type "Web3" in the X text, the Immutable logo suffix will automatically appear (though this is likely still a technical bug).

Increased Government Intervention: Governments may introduce new regulatory policies that could significantly impact the social media and cryptocurrency markets. For example, suppose the U.S. government introduces new social media regulations requiring all social platforms to strictly review and delete content deemed "fake news." This could force X to invest substantial resources to comply with these regulations, potentially leading to controversies over freedom of speech, affecting user activity and brand image.

Geopolitical Risks: The impact of international situations such as the Israel-Palestine conflict and the Russia-Ukraine war may affect the international image and brand reputation of Telegram and X. If they are perceived as political tools or part of information warfare for a particular country, it could damage their credibility among global users. Currently, the countries where Telegram has the highest market share include Russia, Indonesia, Malaysia, Brazil, Saudi Arabia, India, Nigeria, Egypt, and Turkey; X is primarily focused on the U.S. and European countries.

Breakthroughs in Technological Innovation: If X or Telegram achieves a significant technological innovation, it could lead to major shifts in competition. For instance, if Telegram develops a new type of decentralized identity verification system based on ZK technology that can provide efficient identity verification services while protecting user privacy, this technological innovation could attract privacy-sensitive user groups, thereby enhancing Telegram's competitiveness in the social media market.

Major Security Incidents: If X or Telegram experiences significant security vulnerabilities or data breaches, it could severely damage user trust and affect their market positions; it could also attract heavy penalties from the government and strong public criticism.

Major Partnerships: Imagine if X announces a partnership with Amazon, allowing users to purchase Amazon products directly on the X platform and make cryptocurrency payments. This would greatly enhance X's competitiveness in e-commerce and payments.

Conclusion

In exploring the super app competition between Telegram and X (formerly Twitter) in the Web3 era, the reshaping of user experience, new standards for privacy and security, and technological innovation and ecosystem integration may become the three key factors for victory. Telegram, with its advantages in privacy protection and security, as well as its close cooperation with the TON network, is actively exploring the possibilities of Web3. Meanwhile, X, under Musk's leadership, is demonstrating ambition for diversified services and the concept of a digital bank. 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 full of uncertainties. In the future, we may see more partners joining this competition or entirely new competitors emerging, all of 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 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.