User activity is buzzing on TON, a blockchain network with ties to the messaging app Telegram.
The network’s total value locked, or TVL ― a DeFi metric that tracks capital invested in a protocol or blockchain ― has grown 10-fold this year, establishing it as one of the best-performing blockchains in decentralised finance.
Over the past month, TON blockchain’s performance has continued its upward trajectory, with TVL increasing by 46% and peaking at $260 million, DefiLlama data shows.
The increase in TVL coincides with the deployment of Tether’s USDT stablecoin on the blockchain in April.
USDT is crypto’s biggest stablecoin with a market size of $110 billion. Half of that volume is on Tron (not to be confused with Ton), a blockchain with $8.6 billion in investor assets.
The stablecoin’s appeal comes from the low fees users pay when sending and receiving USDT. That makes the network particularly attractive in developing countries where stablecoins have become a tool to protect wealth against inflation and currency devaluation.
But TON’s developers could be eyeing a share of the stablecoin market by integrating USDT on their blockchain.
To achieve that, they may leverage Telegram’s 800 million monthly active users to overcome the cold-start problem, a common challenge for new blockchains trying to generate initial activity on their networks.
It appears that TON developers are already taking steps in this direction.
Telegram integration
The TON blockchain has a crypto wallet integrated into the Telegram app, allowing users to send USDT to their contacts worldwide directly from the app.
That’s not the only incentive the TON team introduced to promote USDT adoption on the network.
Users who store USDT on their Telegram mobile wallets can earn up to 50% annualised yields ― much higher than the average DeFi interest rate offered by lending protocols. The yield comes from TON token rewards for providing liquidity on major decentralised exchanges on the blockchain.
Apart from retail stablecoin transactions, TON has yet to establish itself as a robust DeFi chain. That means hosting DeFi protocols that can command significant user activity.
TON’s current DeFi market is dominated by Tonstakers and STON.fi. Tonstakers is a liquid staking protocol that allows users to earn yield for locking up TON tokens, and STON.fi is the blockchain’s largest decentralised exchange for swaps.
However, the combined market sizes of those two protocols pale in comparison with projects on major blockchains like Ethereum and Solana. What’s more, the network hasn’t been able to attract established DeFi projects to deploy their protocols on the chain.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.