Project name: Toncoin
Project Type: L1
Code: $TON
Cryptocurrency ranking: 10
Market value: $22.5 billion
Total Issue Value (FDV): $33.2 billion
Circulating supply: 3.47 billion (68%)
Total supply: 5.11 billion
Max Supply: Unlimited
Opening words
Telegram was founded in Russia in 2013 by Nikolai and Pavel Durov. Today, it is the third most downloaded messaging app in the world, the eighth most popular social network, and one of the top five messaging apps with 800 million monthly active users. Its CEO Pavel Durov is one of the richest social media billionaires with a net worth of over $15 billion.
Source: Statista
TON, or The Open Network, is an L1 blockchain developed by the Telegram team. They began developing the project between 2017 and 2018, aiming to meet the needs of Telegram's hundreds of millions of users. Although they faced some legal challenges from the US Securities and Exchange Commission (SEC) in 2020, the TON Foundation took over in 2022, bringing a new start to the project. Thanks to financial investments from entities such as DWF Labs and the strategic vision of the project, it quickly became one of the top ten cryptocurrencies.
Source: TON roadmap
If you follow the crypto world, you may have noticed that crypto people spend a lot of time on Telegram. With the rapid growth of $TON’s market cap, it seems that more users will start to move to the TON network, just like Coinbase users have started to move to Base, triggering a “Base season”.
The Telegram team seems to be preparing to bring more people on board with TON, potentially kicking off a "TON season". A glimpse of this strategy appeared last January when Telegram integrated TON into its app and introduced cryptocurrency payments for content creators. The move made it possible to develop and use apps directly within Telegram, creating a smooth experience for its users.
In this article, we will take a deep dive into the TON ecosystem, seeking to understand its core functionality and identify potential opportunities.
TON Network
TON operates through a unique combination of architectural elements and consensus mechanisms, ensuring fast, scalable, and secure transaction processing.
Currently, the services provided within the TON ecosystem include:
TON Wallets: Digital wallets such as Tonkeeper (non-custodial) and @wallet (custodial), with features such as DApp use and staking.
TON Storage: Provides private encrypted blockchain storage similar to Dropbox but more secure.
TON Sites: Create decentralized websites on the TON network and access the network ecosystem through TON wallets and browsers.
TON Proxy: Provides access to the TON network, ensuring censorship-free and smooth use of decentralized applications.
Smart Contracts: Fast processing of transactions on TON through the TON Virtual Machine.
TON DNS: Simplifies navigation of the TON network by converting complex addresses into user-friendly names.
Ton Bridge: Facilitates easy transfer of Toncoin between major blockchains such as Ethereum and Binance Smart Chain.
Future Outlook
On October 31, TON set a new record for the world’s fastest blockchain, which was demonstrated in a live broadcast. The milestone video is available on YouTube. This achievement allows the team to explore new opportunities given the potential of the chain.
The TON team often discusses the concept of a SuperApp, which aims to integrate various services such as instant messaging, social networking, DeFi and e-commerce, all powered by TON's blockchain technology. The vision is to transform it into an entry point for Web3, potentially attracting hundreds of millions of users and facilitating billions of transactions within Telegram's user-friendly and seamless framework, leveraging its established user base.
Additionally, TON recently received an $8 million investment from web3-focused Mirana Ventures to develop this ambitious vision.
The team also highlighted GameFi as a potential use case, noting how the gaming industry could benefit from TON to develop in-game economies.Last year, the TON Foundation announced that Animoca Brands, which is at the forefront of digital property rights in gaming and the open metaverse, became one of the largest validators of the open network blockchain.
TON also seems well suited to being a powerful payment system, providing individuals and businesses with the ability to conduct global financial transactions quickly and at low cost.
In January 2022, TON had 200,000 active monthly wallets. A year later, that number soared to over 700,000. Currently, it is close to 1.7 million, showing the increased usage of Toncoin wallets and suggesting that widespread adoption could be a reality.
Source: Tonstat
Market opportunities
With a market cap of $23 billion, TON positions itself as an important Layer 1 blockchain with a strong user base. This potential stems from Telegram’s unique position as a messaging app with millions of users around the world, many of whom are already involved in the cryptocurrency space.
DeFiLlama reports that the chain has a total value locked of $140 million. Compared to other Layer 1 or Layer 2 blockchains such as Sui’s $658 million, Avalanche’s $1.14 billion, or Base’s $1.4 billion, there is obviously huge growth potential.
Source: DeFiLlama
If the TON explosion materializes, then the early adopters and followers of the ecosystem will greatly benefit from its expansion. Considering the possible future shift towards this ecosystem, paying attention to and participating in the TON ecosystem may be a strategic move.
Exploring the TON ecosystem reveals a diverse range of projects and tokens with room for growth and development. In the memecoin space, where these are often indicators of community interest and social momentum, the scene appears to be in its early stages. There has yet to be an outstanding named coin with a strong community or significant social growth. However, certain coins such as $TEPE have shown some activity over the last week, growing by 100% in value. Other memecoins, such as TON FISH, TON INU, and DogWifHood, while lacking in uniqueness, illustrate the nascent nature of the TON memecoin sector.
The DeFi space within TON houses two major decentralized exchanges, which could be critical to the liquidity and growth of the ecosystem. $STON is the leading DEX with $80 million in total value locked, and DeDust is the second largest DEX with $49 million in TVL, representing the infrastructure for DeFi activity on TON. If Telegram aims to foster a thriving DeFi ecosystem, the success of these platforms could be critical as they will directly benefit from any liquidity enhancement initiatives.
In the GameFi space, TON hosts projects such as PunkCity and Petcoin. PunkCity stands out for its GameFi ecosystem driven by Telegram chatbots and integrated NFTs, while Petcoin launched Tongochi, a Tamagotchi-inspired GameFi project.
Some of the most popular tokens on the TON chain currently include:
Source: CoinMarketCap
The overall narrative of the TON market opportunity lies in the potential for its ecosystem growth, driven by Telegram’s massive user base and strategic moves to integrate cryptocurrencies more deeply into its platform. While DeFi and GameFi projects on TON are still in their early days and the memecoin scene is not yet mature, the signs of this growing ecosystem are worth watching.
Competitors
There is a ton of competition among Layer 1 blockchains in the cryptocurrency world right now. While some of TON’s early competitors like Polkadot, Tezos, NXT, and EOS seem to be losing steam, new players like Aptos, Sui, Solana, Avalanche, and Cosmos have emerged over the past few years. While TON has managed to crack the top 10 cryptocurrencies, maintaining a large market share is no easy feat.
Source: Coingecko
Several key advantages of TON:
Fifth generation blockchain: TON is developing towards a shardable proof-of-stake multi-chain system that supports custom work chains. It can forward messages between shards almost instantly and keep everything synchronized in its network.
Native Sharding Support: Built for true scalability, TON can support a wide range of applications and is designed to handle any project that can run on a blockchain.
Comprehensive ecosystem: TON provides a range of services including P2P networking, storage, and other services to build a complete infrastructure that enhances its practicality and scalability.
Flexibility for Multi-Purpose Applications: TON is designed to be flexible enough to support a wide range of specific needs, from large-scale private blockchain projects to general-purpose decentralized applications.
Token Economics
Toncoin ($TON), the native cryptocurrency of the TON blockchain, supports transactions and applications such as games and collectibles. Its tokenomics began in November 2019, with 5 billion coins minted. Regulatory issues in May 2020 halted development and focused instead on proof-of-work. By May 2021, TON transitions to mainnet and continues to distribute coins via proof-of-work. In June 2022, TON upgraded to a proof-of-stake network, improving security and stability, highlighting over 12 million accounts, an annual inflation rate of 0.6%, and significant validator participation.
Mining began in June 2020 and ended in June 2022, allowing public participation and marking the end of the initial distribution. After mining, TON launched the Infinity TON Mining Pool for continued participation. As a PoS system, TON's operations now involve validators and nominators, promoting network growth through Toncoin rewards.
Market Cap: $22.73 billion.
Fully Diluted Valuation (FDV): $34.13 billion.
Circulating Supply: 3.47 billion (67.98% of total)
Total Supply: 5.11 billion
Max Supply: Infinite.
Bullish factors
TON’s integration with Telegram provides a huge potential user base for adoption, creating a ripe environment for user growth and dApps development.
TON’s architecture, including its advanced consensus mechanism and scalability solutions such as sharding, makes it a leading technology in the blockchain space, capable of processing transactions quickly and efficiently.
The TON ecosystem is expanding rapidly, including various services such as TON Storage, TON Website, and DeFi applications.
The project has received significant financial support from major entities such as DWF Labs, indicating strong investor confidence. These investments support the development of TON’s infrastructure and applications, driving its growth and innovation.
Bearish factors
TON's history of regulatory challenges with the SEC could pose ongoing risks that could affect its operations and future development. In addition, TON's close ties to Telegram mean that any legal, PR or economic issues faced by Telegram could have a knock-on effect on TON. This connection could affect investor confidence, user adoption and the overall market perception of TON.
TON operates in a highly competitive market with heavyweight and emerging projects such as Ethereum and Aptos, and needs to continue to innovate to remain relevant and attract users. In addition, due to TON's unique architectural framework, the TON virtual machine is incompatible with the Ethereum virtual machine. This means that TON cannot directly leverage Ethereum's extensive development tools and decentralized application ecosystem.
While the integration with Telegram is promising, there is still uncertainty about turning messaging app users into active blockchain participants. Slow ecosystem development could undermine its potential.
If the inflation mechanism is not calibrated correctly, it could lead to an excessive supply of tokens, reducing the value of individual tokens and potentially causing a decline in investor interest.
Conclusion
Originated from the popular messaging app Telegram, TON has quickly risen to prominence among the top Layer 1 blockchains. Although it has quickly become one of the top ten cryptocurrencies, TON's road ahead is still full of challenges. The blockchain world is highly competitive, with new entrants such as Aptos, Sui, Solana, Avalanche, and Cosmos stirring the pot. These new and old players mean that TON must work hard to maintain a strong market presence.
Looking ahead, TON’s connection to Telegram provides a huge opportunity for growth. Thanks to Telegram’s large user base, TON is in a good position to accelerate adoption and encourage the creation of new decentralized applications.
As TON grows in the blockchain world, its future success will depend on keeping up with the pace of innovation, attracting developer participation, and maximizing its special connection with Telegram. There are many possibilities ahead, and TON's goal to change the way blockchain is used could make it a key player in getting more people to use blockchain technology.
