- Telegram plans to build a decentralized exchange following the downfall of FTX.
- According to CEO Durov, FTX collapsed because it was built on a centralized platform.
Telegram is planning to develop and launch its own crypto exchange. The instant messaging platform will launch a decentralized exchange and a non-custodial wallet to offer millions of users more decentralization and control in the crypto industry.
CEO Pavel Durov announced the plan on his Telegram channel on Wednesday. According to his message:
“Telegram’s next step is to build a set of decentralized tools, including non-custodial wallets and decentralized exchanges for millions of people to securely trade and store cryptocurrencies. This way we can fix the wrongs caused by the excessive centralization, which let down hundreds of thousands of cryptocurrency users.”
The popular instant messaging app has lofty plans for crypto despite the low trust and waning positive sentiment caused by the recent FTX collapse. However, Durov believes that the solution is to move the sector to rely more on decentralization. He argues that centralization is one of the reasons many people lost a lot of money to FTX’s bankruptcy because people at the helm of the exchange’s affairs “began to abuse their power.” Weeks ago, FTX filed for Chapter 11 Bankruptcy in the District of Delaware.
Durov’s Optimism Based on Fragment
The Telegram CEO is confident that building the wallet and exchange would not be much of a challenge after successfully developing Fragment, a decentralized auction platform. Durov specified that creating and launching Fragment only required input from himself and 4 others over a period of 5 weeks. Based on Telegram’s TON (The Open Network) blockchain, Fragment allows Telegram users to auction their handles, trading them using the blockchain’s official token Toncoin (TON).
Users will be able to find and purchase domains and auction current handles. Telegram will offer users four or five-character handles starting from 126 Toncoin (over $200). However, more sought-after handles like “casino” or “bank” will have minimum bids from 30,000 TON, worth nearly $54,000, according to CoinMarketCap as of press time. However, prices may decrease if new offers are not higher than the minimum bid. On the benefits of Fragment, TON Foundation founding member Andrew Rogozov said:
“For the first time, social media users will be able to transparently prove that they own their handles thanks to their tokenization on the TON blockchain.”
Telegram initially proposed auctioning usernames via smart contracts in August. Durov posted on his channel shortly after Telegram launched the TON DNS service, which uses human-readable names to represent wallets, smart contracts, and websites.
Telegram and Crypto
After abandoning initial efforts for its own token, Telegram launched crypto support in April. According to an official tweet, a user can now send Toncoin to any other for free without waiting for confirmation or pasting long wallet addresses. The new feature also allows users to easily buy Bitcoin within the app. However, users can only send and receive Toncoin.
Telegram had tried to launch its own token but was sued by the SEC in 2019 after raising $1.7 billion in an effort the SEC concluded was an illegal token offering. Telegram abandoned the plan and paid the SEC a fine.
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