TON Innovators: Catizen #2

Welcome to TON Innovators, our written series in which we interview projects building within the TON Ecosystem and shaping the future of Web3. Today, we’re bringing you a second interview with Catizen, a Telegram game that took the world by storm. We first interviewed Catizen in early May, but much has changed since then, and Catizen has become one of the most popular and biggest Web3 games ever.

Citizen has dominated The Open League leaderboard for three consecutive seasons, beating their competitors and highlighting their innovative approach to Web3 gaming with unique mechanics, evolving gameplay, and capturing visuals.

In this interview, we will explore how they achieved an amazing 7% conversion rate of on-chain users and an impressive average revenue per user (ARPU) of nearly $30. We will dive into how Catizen leverages the unique mechanics of TON and Telegram to improve their business model and achieve virality. We will also discuss their plans and recent announcements, so read the entire interview.

This interview is for informational purposes only and does not constitute an endorsement, approval, or recommendation of the project. The views and opinions expressed in this interview are those of the interviewee and do not necessarily reflect the views of the TON Foundation. This is not an investment advice

TON Innovators: Catizen #2

Welcome back, Catizen. We spoke to you over three months ago, and much has changed since then. Can you give us a brief overview of everything that shaped those three months? Compared to May (the last TON Blog interview), both our community and game evolved a lot. Over the past three months, Catizen has transitioned from Phase 1 to Phase 2 and is now entering the third phase. We have successfully implemented an innovative IAP+IAA self-sustaining business model, launched the game engine and SDK, and became one of the largest crypto-loving cat communities, completing our financing round.

We are now fully prepared to lead our community into the third phase, which includes the realization of our mini-game center and token airdrop, and the transition to a decentralized Catizen Ecosystem.

You’re now the most successful project in the history of The Open League, winning three consecutive seasons in a row. How did you achieve this? Before this interview, you mentioned your impressive 7% conversion rate of on-chain users. How do you do this? What strategies and unique business models do you employ?

The Open League evaluates games based on on-chain interactions and Unique Active Wallets (UAW), ensuring a fair assessment of mini-games within the TON ecosystem by considering community quality and on-chain conversions. Catizen has established a strong foundation in these areas. Even when compared to tap-to-earn mini-games from other ecosystems with a much larger-scale user base, Catizen still stands out in these evaluation metrics. Our Telegram Premium user community has surpassed 2 million members.

According to Statista, at the beginning of this year, there were approximately 5 million Telegram Premium users, meaning that over 40% of Telegram's paying users are members of the Catizen community. Additionally, we have over 1.5 million on-chain users and more than 550,000 paying users. These users are active and authentic. The continuous conversion of our high-quality community is attributed to our well-defined product positioning from the outset and a business model that differs from the typical tap-to-earn approach.

By leveraging our rich and professional experience in Web2 mini-games, we understand how to utilize the unique advantages of the TON and Telegram ecosystems. By combining the IAB (In-App Bidding) and IAP (In-App Purchase) models, we have successfully implemented a business model that continuously and stably converts a large user base into a high-quality user group.

At Catizen, we have revolutionized the traditional In-App Advertising (IAA) and In-App Purchase (IAP) business model from Web2, transforming it into a combination of In-App Blockchain (IAB) and IAP. Major Web2 companies such as Google and Tencent have invested billions in training users to watch ads to complete tasks for boosts or additional game props. We have advanced this concept by guiding users through on-chain interactions, educating Web2 users on how to connect wallets, and gradually transitioning them into Web3, leveraging their familiar gaming habits to achieve higher game levels.

In a previous interview with Coindesk, we mentioned that many of our users are attracted not just by airdrops but by the joy of gameplay. Hyper-casual games operate in this manner, and within the Web3 ecosystem, activities such as playing games, purchasing in-game items, and participating in on-chain interactions can provide users with opportunities to earn additional income, thereby offering further incentives. Catizen's healthy revenue stream is due to our simplified IAP model. When users engage with Catizen, they have clear objectives—they aim to climb the leaderboard for higher rankings. To achieve this, they need to purchase Fishcoins (in-game currency) to gain more control over their game progression.

We have designed Catizen to be straightforward, considering it the starting point of our ecosystem. This ease of use ensures that everyone, whether from Web2 or Web3, can quickly get started. Users can explore the functions of earning Fishcoins, learn to connect to the blockchain, and gain extra boosts. The process encourages users to explore on their own, and it’s simple enough that the transition from playing to purchasing, from Web2 to Web3, from being a regular player to potentially becoming a $CATI Holder, only takes about three clicks. Regular engagement with Catizen will familiarize users with the process.

We established this business model from the inception of Catizen because we recognized that changing business models and user expectations mid-course is challenging. Unlike many mini-apps that follow the meme-way, lacking a sustainable business model post-TGE, Catizen aims to educate users and familiarize them with Web3. This is evidental in our conversion data. Our high-quality user base and strong purchasing power position us well for future growth.

Catizen's unique approach and deep foresight in building a robust ecosystem, rather than just another clicker game, set us apart. We believe this strategic differentiation is key to our long-term success and our ability to embrace future roadmaps. Our IAP and IAB models are the result of in-depth research and seamless integration into our product, and we're pleased that our community has recognized the value of our assumptions and practices.

On July 23, you published the news about Binance Labs investing in Pluto Studio, the publisher of Catizen. What does this mean for the future of Catizen?

That’s right, we recently announced the financing of our launch platform, Pluto Studio, with investments from TOP, Hashkey, Binance Labs, and Folius Ventures. All investors (TOP, Hashkey, Folius, Binance Labs) will be allocated a certain proportion of the Catizen team's tokens. Without affecting our airdrop economic model, they have chosen to invest in the long-term value of Catizen.

This type of investment is rare in Web3; most investors, even those with a lock-up mechanism, do not fully align with the team’s interests. However, Pluto's investors stand with the team, moving forward and developing the future together. We have discussed extensively that our business model and future development are not affected by the airdrop. The airdrop is merely the beginning of opening the entire Catizen ecosystem to the community.

You’re the first TON project to receive an investment from Binance Labs. Why do you think Binance Labs decided to invest in Pluto?

Binance Labs' investment in Pluto is primarily aimed at expanding within the TON ecosystem, which is recognized for its immense potential and promising future. From my perspective, the reason Pluto stands out as their first chosen project is due to the in-depth investigation by investors who have identified our distinct advantages over other projects. For instance, our high-quality community conversion model and our team's ability to conduct thorough research on ecosystem characteristics have enabled us to develop smart leveraging skills tailored to the unique features of the TON ecosystem.

Additionally, I believe our game center is another aspect that investors find highly promising. These investors focus on long-term value, so our future roadmap is undoubtedly a key factor in their decision to invest in us. This is another major distinguishing feature of Catizen compared to other mini-games in the ecosystem.

As mentioned previously, our team began developing the Catizen gaming bot in 2023, and it was launched in March 2024, well before Notcoin became globally recognized. During the development period, we conducted several AB tests on different core plays and extensive research within the TON and Telegram ecosystems, aiming for a strong start on TON. From day one, we have differentiated Catizen from all the clicker and tap-to-earn mini apps within the TON ecosystem.

From the technical level to our business model and community distribution, Catizen stands apart from other clickers on the TON chain. Unlike other Telegram Gaming Bots that are built as simple clicker games, we have our own game engine and SDK. While users might not immediately notice these technical differences due to the current focus on short-term airdrops, having our own engine and SDK allows us to establish an ecosystem and evolve into a mini-game hub. As our ecosystem matures, we can rapidly release new games to our community, creating a game matrix. We have already signed over 18 well-established Web2 mini-games, some with strong community bases and others generating substantial revenue. This technical barrier, along with the head-start advantage and our long-term vision, sets us apart significantly.

Developing within the TON Ecosystem requires mastering its unique language, FunC, which is vastly different from other Web3 languages. Many developer teams are reluctant to invest time in learning a new, complex language in this fast-paced Web3 era. Moreover, we have the first-mover advantage, having focused on the TON ecosystem since 2022, spending over six months refining the Catizen Bot's experience and on-chain interactions.

Your average revenue per user is almost $30. That’s very impressive. How did you achieve this, and what does it mean for Catizen?

In fact, our ARPU (Average Revenue Per User) is growing at a rate of $1 per week, with the most updated data at 31.02 USD. This number is astounding, especially considering that, according to Token Terminal data, the average ARPU for projects in the crypto space is approximately $0.20 USD. Our ARPU is growing at a rate five times higher than this average each week. For Catizen, this means that we can benchmark ourselves not only against mini-games within the TON ecosystem but also against most crypto and GameFi projects.

Our community of on-chain users and paying users is continuously expanding. This exceptional growth indicates that we have achieved beyond-expected success in Phase 2, laying a solid foundation for leading our community into Phase 3.

Longevity is the main issue of Web3 games. They often fail to survive long-term and keep their players active and engaged. How will Catizen’s existing advantages be applied to your future plans? How will the mini-game center and Launchpool mutually benefit the community and project partners?

Longevity issue has not only appeared among web3 gamefi, but also web2 games. In specific, the lifecycle of any mini-game or even a well-crafted game is inherently short. Therefore, Catizen aspires to be more than just a short-lived mini-game, which is why we turned our attention to Web3. Web3 is an untapped blue ocean, lacking high-quality communities, experienced game development teams, and a fusion of skilled game developers with seasoned Web3 designers. In many projects with incomplete product models, crypto accelerates their decline. However, in a project with a comprehensive business model, crypto can be the core support that sustains upward development. This is because the user base and the Catizen ecosystem are continually reinforced by robust token incentives.

Pluto Studio is committed to expanding its portfolio of games. We have already contracted 18 games, which will be released soon. These games will cover a variety of genres and incorporate similar Web3 functionalities to engage further and educate our players.

The 'Launchpool' feature in Catizen is designed to integrate gaming with DeFi principles. It allows players to stake their in-game assets, such as Cats or Fishcoins, to earn rewards over time. This mechanism not only enhances the gaming experience but also educates players about fundamental Web3 concepts like staking and liquidity provision.

How will our community continue to benefit? Our community’s $CATI holders will receive various incentives:

• Open Task Rewards: By completing tasks, $CATI holders can earn tokens or stablecoins from other projects. Revenue Sharing: A portion of the revenue generated from the mini-game center will be used to buy back tokens, ensuring the stability of the $CATI token value.

• Game Center and Launchpool Participation: Once mini-games gain community recognition, they will be added to the Catizen Launchpool. All $CATI holders can participate in the Launchpool by staking their tokens to earn additional tokens from other popular games.

Through these initiatives, we aim to create a robust and rewarding ecosystem for our $CATI holders, driving growth and engagement within the community.

If you understand the scale of traffic and numbers involved, CATIZEN will achieve a very strong cycle. By leveraging the advantages of Web3, Catizen can offer a sustainable and thriving platform far beyond the capabilities of a standard Web2 game, essentially creating a Catizen Gaming Universe where the best mini-games in the world are offered, built around the $CATI token.

Lastly, you recently announced some game changes that received criticism and negative feedback. Would you like to share something about this with our readers?

We've received many heartfelt inquiries about the progress of our airdrop, as well as concerns regarding recent changes within Catizen.

Building a product in the ever-evolving and innovative world of Web3 is no easy task, and not everything can be perfect. We truly value your feedback and are always listening closely to our community. While some updates might seem unsettling now, we believe they are necessary for the long-term benefit of players and the future development of the Catizen Ecosystem.

Here, we wish to specifically address the concerns raised by our community.

• Airdrop Delay: Delaying the airdrop was a difficult decision, and we understand the frustration it may have caused. After consulting with our partners, we felt it was the best course of action. Our main priority is to ensure that when the airdrop happens, nearly 27 million Catizen users can be benefited, and CATI holders have plenty of choices and potential. To achieve this, we are doing our best to make it happen:

• Strategic Partnerships: In order to secure valuable and expert partners who can provide us with professional advice and support, we have allocated a portion of our team's tokens for financing.

• Open SDK & Game Platforms: To ensure we are fully prepared for the airdrop, we have opened our SDK and gaming platform. Our aim is to be prepared before the airdrop, focusing on long-term value rather than treating $CATI as a mere meme coin, which we think it is crucial for delivering a sustainable tokenomic structure for $CATI’s potential and use case scenarios.

• Token Distribution Evaluation Integral: We have divided the in-game props into several different dimensions (vkitty, fishcoin, wCati, xZen). The mechanism was designed to set fair ratios for player engagement and airdrop allocation at each stage, ensuring that every community member benefits equitably.

• Previous Donations to PETA: We have received feedback from the community regarding PETA's past actions of euthanizing animals. In response, we have contacted the PETA team and received the following confirmation:

  1. PETA has provided an official statement addressing their past practices of euthanizing animals.
  2. We have confirmed with PETA that all donations from Catizen will be used exclusively for feeding, vaccination, rescue, and adoption assistance.
  3. We will maintain ongoing connections with PETA to monitor the use of our donations and will keep the community updated.

We value your voice and stand with you! To ensure that our future donations align with our community's values:

1. Catizen has temporarily suspended the in-bot collaboration with PETA and has halted the next planned donation.
2. We will first observe the impact and feedback from our previous donation before deciding on the next partner for our donations.
3. During this period, we encourage the community to actively report and recommend suitable organizations. All recommendations will be considered as potential partners for our future donations.