The game seems to have come out of nowhere. In March, it launched on TON, aka The Open Network, a Web3 ecosystem built on Telegram. Now the game is so popular that Rear Admiral Habibollah Sayyari, Iran’s deputy chief of the military, accused it of being part of the West’s “soft war” on Iran’s government. As reported, Sayyari said that “One of the features of the soft war by the enemy is the ‘Hamster’ game.”

So is the United States really weaponizing Web3 hamsters against Iran? It’s a fascinating (if wild) question, but in some ways the answer is irrelevant. The question’s very existence is what matters. “This has become so fucking big, even politicians started talking about it,” says Inal Kardan, Gaming Lead at the TON Foundation.

Hamster Kombat’s founder is anonymous; the project declined requests for an interview. (Clearly it’s the CIA.) But they claim to have over 200 million users; they have 11 million followers on Twitter/X, and their YouTube account has 31 million subscribers.

This is just one of several “GameFi” projects on TON with eye-popping growth. Web3 games are flourishing. The cute and cartoons “Catizen” (the sponsor of CoinDesk’s GameFi theme week] has over 23 million users. TON’s first big success story, “Notcoin,” has over 40 million.

In total, there are now 500 million users on the TON network, according to the foundation. With a current market cap of $19.4 billion, Toncoin has surged to become the eighth largest project in all of crypto -- leapfrogging mainstays like Polkadot, Cardano, and NEAR.

But the Iranian military isn’t grumbling about Polkadot or Cardano. TON games feel different. They’re simple and fun and it seems they’ve broken out of the crypto echo-chamber, finding a mainstream audience, a la NFTs in 2021. “This is not just about the degens,” says Kardan. “This is about normies doing something with blockchain for the very first time.”

One reason for the explosive growth of TON is the global reach of Telegram itself, especially in Europe and Asia. Telegram has over 900 million users. But as recently as December of 2023, according to Kardan, only 1% of them used Telegram to play games. Entrepreneurs sniffed an opportunity.

“We looked at Telegram and TON, and we thought, this is virgin land,” says Tim Wong, Chairman of Catizen Foundation. So games like Catizen, Notcoin, Yescoin, and Tapswap quickly filled the void, partly because they can be easily (even mindlessly) played while waiting for an elevator.

“All of them are hyper-causal, really simple games,” says Kardan. “That’s what people like.” The Telegram games are easy to install, easy to play, and easy to connect to crypto. (At least internationally--Telegram’s native crypto wallet is not available in the US, due to regulatory concerns.) For 15 years, the web3 space has been dogged by clunky interfaces and confusing protocols. TON seemed to have solved that overnight.

The buttery smooth UX is why DeFi analyst David Zimmerman wrote a research paper concluding that TON is “well-positioned to become crypto’s killer app,” as it has “done more to progress in these areas [UX and real-world use cases] than any other crypto market participant.” TON games are simple. In a phone interview, Zimmerman says that in all his years covering crypto, whenever he introduced his “normie friends” to Web3 projects, it would typically take a 40-minute tutorial filled with confused questions. With TON? He’s already onboarded 10 friends.

The games themselves are clever, appealing, fun. You can start playing Catizen in seconds, clicking on little kittens and watching coins magically appear (more on this later). You earn rewards for referring friends and sharing on social media -- a clever driver of growth. In some games you click, in some you swipe, and in some you make some cheeky choices.

Take Hamster Kombat, a deeply self-aware game with b-side references to Web3 culture. You act as the CEO of a crypto exchange that needs to make decisions on marketing, PR, and even legal considerations; unlocking the perk of “SEC Transparency,” for example, can boost your profit-per-hour, as can implementing KYC or obtaining a license to operate in the UAE. (In a sense, this is an extremely weird game to onboard normies. It’s hard to visualize Iranian taxi drivers obsessing about SEC transparency.)

While it seems that TON games dropped from the sky just weeks ago, many have been in development for years. (This echoes 2021’s Summer of NFTs, where insiders had been following the trend since 2017’s CryptoPunks.) Wong says that Catizen began eyeing Telegram in 2021.

Consider this bold prediction from January 2023: “TON will become the biggest blockchain in terms of the # of users, thanks to 1) its technology and 2) Telegram. It’s only a matter of time,” wrote Sasha, the founder of Notcoin, in a prescient twitter thread. “Telegram has 700M MAU and is the main messenger for the crypto people. Telegram’s founders invented TON and have integrated blockchain to sell Telegram usernames and anonymous numbers (NFT). They announced non-custodial wallets and DEXs a month ago.”

This is precisely what happened. That said, a sprawling network and a slick interface can only explain so much. TON games also offer something else: The allure of making money.

The millions of Notcoin users, after tapping and tapping and earning coins, were delighted to receive an Airdrop that showered 80 billion Not tokens to the community, transforming their mindless clicking into something with real value (at least for now). “Notcoin, a Mini App on Telegram, reached 35 million active users in just a few months,” Pavel Durov, Telegram’s CEO, wrote in his Telegram channel. “All of a sudden, Notcoin users who just played this game for fun could convert their in-game currency into real money.” (Telegram has officially distanced itself from TON after regulatory skirmishes with the SEC.)

Notcoin set the precedent, so now millions of users click on other games in anticipation of future rewards. Play-to-Airdrop is the new Play-to-Earn. This is not subtle; Catizen’s official tagline is even “Play to Airdrop.”

It’s hard to find any growth in the Web3 space that’s not somehow pegged to price appreciation, and GameFi is no exception. “I would attribute most of its success in recent months, including price, to the good old-fashioned speculation we’re used to,” says Zimmerman. He’s also skeptical of the reported number of users, as human beings can have multiple wallets. But even if you discount the numbers, Zimmerman acknowledges there are “real fundamentals here.”

These fundaments are catching the eyes of other game developers. “I’m pretty bullish on TON games,” says Des Dickerson, CEO of THNDR, which is building bitcoin-powered games on the Lightning network. (Dickerson has leaned into mobile crypto gaming since before it was cool; here’s my deep-dive into her project from 2021.) “This trend is proof that users want gaming weaved into their social interactions,” she says, “and they want these games to have real-world value baked into the gameplay.”

But there is one possible catch to all of this. (In crypto, there’s always a catch.) Rightly or wrongly, two words will act as a splash of cold water for any “earn free money!” crypto game that seems too good to be true: Axie Infinity. Axie was the darling of the last crypto gaming hype cycle; it’s now widely seen as a cautionary tale. So how are TON games different?

For starters, Wong says that Axie had a “high entry barrier to play the game, and the entry ticket becomes more and more expensive.” He has a point. The cheapest Axies were over $300 at their peak, and the price would go up as long as there are more new users coming in than users dipping out. That’s not sustainable. Wong says, “It’s not very far from a Ponzi scheme.” Catizen and the other TON games, in contrast, require no upfront investment.

Kardan gets the “How is this not Axie?” question all the time. “The answer is quite simple,” he says. “All of these games are about traffic,” explaining that the Airdrops are essentially marketing campaigns to get users and traffic, and that traffic can be monetized. “This is all about selling traffic,” he says, so there’s an “inflow of money from advertisers.”

Zimmerman isn’t so sure. “If we’re being honest, we all know that stuff [games like Hamster Kombat] is not going to be sustainable,” he says. “If you want your network to be truly successful, you need to have some apps that are profitable.” He thinks it’s quite possible that TON is near one of the “big tops,” as in the top of the market cycle (foreshadowing a crash), and suspects the real test will be what happens after a “cataclysmic wipeout.” He also thinks TON could survive and even thrive. “With the real advantage they have in UX and distribution,” says Zimmerman, “We’ve never seen that in crypto before".