The government has yet to announce new rules or modify its approach towards the Web3 industry, after it mandated registrations with the Financial Intelligence Unit – India (FIU-IND) for crypto firms last year. Despite the country’s gradual approach towards exploring the sector, the number of Web3 firms in India is gradually rising. In a recent report, the Bharat Web3 Association (BWA) notes that India’s Web3 ecosystem already comprises over 400 firms, while one state has emerged as the industry hub for the crypto sector in the country.

The report reveals that Karnataka has emerged as the hotspot for Web3 firms, housing at least 97 Web3 firms. Other states that are seeing a rise in Web3 firms in India include Maharashtra, Telangana, Haryana, and Uttar Pradesh.

Meanwhile, blockchain solutions emerged as the Web3 vertical with the largest concentration of companies operating within it, according to the report. Presently, 79 firms have been identified by the BWA for conducting research and development work around the use cases of blockchain technology.

This development, however, seems natural given that blockchain exploration is one Web3 field that the government has shown a keen interest in. India’s IT ministry has launched a suite of blockchain stacks for developers to safely experiment with the technology. Even TRAI has relied on blockchain technology to blacklist spam callers.

A total of 18.7 percent of Web3 firms in India are focussed on developing blockchain-based solutions to improve areas including supply-chain management, healthcare, and fintech among others. “We hope to quantify and bring attention to the start-ups contributing to the silent Web3 revolution in India,” said Dilip Chenoy, chairperson, BWA.

After blockchain services, the next most popular Web3 area is the exchange business for virtual digital assets. A total of 42 Web3 brands are working around VDA transactions – making for 42 percent of the total 422 firms.

Blockchain infrastructure companies, decentralised finance, gaming, and entertainment are other areas that are attracting entrepreneurs looking to establish Web3 businesses, according to the report.

“At Meity, we are committed to nurturing a Web3 ecosystem that is conducive to technological advancement while ensuring robust digital governance. The rise of Web3 technologies provides us with the opportunity to develop use cases that serve the public good through enhanced transparency while fostering a inclusive digital economy,” MeitY Secretary S Krishnan said in a statement included in the BWA report. “I believe Indian innovators hold the know-how to not just navigate this emerging space but the capability to lead it,” he added

Telegram has been no stranger to controversy, from the arrest of its CEO, Pavel Durov, in August, to recent policy changes affecting global users. Now, the messaging platform is making headlines again by hinting at an upcoming NFT-focused feature, despite 96 percent of existing NFTs being considered inactive. While the launch timeline remains uncertain, this feature will be tied to Telegram’s new “Gifts” service, which allows users to send and receive animated images and personalized messages as celebratory stickers.

How are Gifts Related to NFTs

As per Durov, Telegram will soon deploy the ability to convert limited edition Gifts into NFTs. These digital collectibles will be based on Durov-backed TON blockchain.

“Users will then be able to auction and trade these tokenised gifts outside Telegram, with ownership recorded on the blockchain,” a post on Durov’s channel read. In addition, receivers of Gifts on Telegram will be allowed to display them on their profiles as well.

he rollout of this feature, expected “later this year,” could position Telegram as the first global messaging app to integrate NFTs into its core functionality. Competing platforms like WhatsApp and Instagram have yet to introduce key features related to virtual assets, leaving their users exposed to the financial risks of Web3’s volatility.

NFTs, or non-fungible tokens, are digital collectibles created on blockchain networks. These tokens can be based on a wide range of inspirations, including cartoon characters, music, art, animals, and games. Often, NFTs come with underlying monetary value, rewards, and exclusive privileges for their holders.

It is to be noted that 96 percent of NFTs currently have zero trading volume, low sales, and no activity on social media. A recent report by NFTEvening said that the average lifespan of an NFT is now 1.14 years, which is 2.5 times shorter than the average lifespan of traditional crypto projects.

Telegram’s Experiments with Web3

Earlier this year, Telegram launched an in-app store for games known as Mini Apps. Many popular games within the Telegram Mini Apps feature digital assets such as cryptocurrency and NFTs as integral components of their ecosystems.

In late September, Telegram-hosted game Hamster Kombat said that it will be introducing NFT mechanics into its game ecosystem by December 2024.

The messaging app, under Durov’s leadership, also recently served as a launchpad for ‘Dogs Coin’ — a memecoin that generated quite the buzz on social media in August this year. Between July and August this year, the Dogs ecosysem had managed to amass over 3.19 million community members. As of Monday, October 7 – Dogs Coin is trading at $0.0007346 (roughly Rs. 0.062), showed CoinGape.

“Telegram Mini Apps is an open platform for businesses to build and deploy crypto-friendly apps and games. It supports integrated crypto and fiat payments (via Google Pay and Apple Pay). TON projects have exclusive access to Telegram ads and can kickstart a performance marketing campaign with Telegram Ads to effectively acquire more users,” the website of the Ton blockchain explains, indicating that Telegram is likely to continue its support for Web3 games, features, and services.

In an official blog post, Telegram said that the animated images and customised messages part of the Gifts feature can be converted into ‘Stars’. Telegram now states that Stars will serve as in-app currency that can be used to buy mini apps services and support creators.