Author | Whiterabbit
Compiled by | Wu Talks about Blockchain
Original link:
https://medium.com/@whiterabbit_hq/ton-blockchain-a-group-of-related-whales-mined-85-of-ton-supply-2e3300cc93bc
Note: This article was published on March 14, 2023. The original article is accompanied by a large number of links for readers to reproduce the research. It is recommended to read the original article.
Introduction
● 96% of TON supply was allocated to miners in July and August 2020;
● At least 85.8% of the supply is mined by a group of miners that are interconnected and associated with the TON Foundation;
● The funds of these miner groups are used by network validators, who control 2/3 of the TON blockchain PoS consensus;
● The current vote to freeze inactive addresses for 4 years has resulted in TON whales freezing some funds in an attempt to address blockchain adoption issues, but more steps need to be taken;
About TON
The Open Network is a PoS blockchain that was originally built by the Telegram team but is now supported by third-party developers.
A brief history of The Open Network:
1. On November 15, 2019, the Telegram team launched testnet2 (currently the mainnet);
2. In May 2020, Telegram suspended active participation in network development due to disagreements with the U.S. Securities and Exchange Commission;
3. Subsequently, the Telegram team decided to distribute test GRAM tokens through a token mining process starting on July 6, 2020;
4. In May 2021, testnet2 was renamed the mainnet, after which Telegram transferred the permissions of ton.org and related GitHub accounts to the development team that continued to work on the project;
5. In February 2023, TON validators voted to freeze inactive accounts for 4 years, which is approximately 20% of the total supply.
Mining History
Telegram launched token mining on July 6, 2020, transferring tokens through system addresses to 20 contracts that distribute tokens.
There are two types of contract addresses: Small Givers and Large Givers. The latter distributes more tokens each time (100,000 each time instead of 100), but requires more computing power.
Mining runs from July 6, 2020 to June 28, 2022, but almost all tokens issued were distributed in the first 51 days:
● From July 6, 2020 to August 26, 2020, Large Givers distributed 4.8 billion (96%) tokens and Small Givers distributed 9.9 million tokens (0.2%);
● From August 27, 2020 to June 28, 2022, Small Givers distributed 117.3 million tokens (2.35%).
Giver type token allocation
It is worth mentioning that the mining of Large Givers actually ended on August 24, but the two addresses received the last 100,000 tokens from each Large Giver on August 26.
The remaining 1.45% was allocated from the system address during 2019–2020 for testing purposes. Subsequently, most of these funds were transferred to an address of the TON Foundation.
Token distribution between Giver contracts
Since mining ended, test GRAM tokens were rebranded as mainnet TON tokens, and their fully diluted market cap has grown from 0 to $11 billion in three years.
Most of the major token holders (Large Givers miners in 2020) still hold these tokens. Some of them may have long-term plans for the TON ecosystem, but at the time of writing, there is no exit liquidity in the market to sell tokens. According to CoinMarketCap, the depth of TON tokens on centralized exchanges -2% and +2% is about $200,000 to $400,000 (link). It is almost impossible to sell TON tokens on the open market at the moment, as it would cause drastic changes in market prices.
Token Allocation Analysis
A total of 3278 unique addresses participated in mining, but only 248 addresses participated in the Large Givers allocation. We will focus on these 248 addresses because Large Givers allocated 96% of the TON supply.
So we know that 96% of TON supply is distributed to 248 addresses. Moreover, these 248 addresses are closely connected: we found many groups of miner addresses that are connected to each other and have the same patterns, such as the start and end time of mining or the operation of mined coins. We also found some retail activity, but the majority of the token supply is mined by a group of interconnected whales.
Based on on-chain analysis, we distinguished several groups participating in the Large Givers distribution and linked them to the TON Foundation and its affiliated members:
1. The first group “July 6th — July 30th” — mined 22% of the supply;
2. The second group “July 30 — August 24” — mined 20% of the supply;
3. The third group “July 6 — August 24” — mined 18.8% of the supply;
4. The fourth group “July 19th – August 24th” — mined 17.2% of the supply;
5. Other smaller groups began on August 1st — mining 7.8% of the supply.
According to our calculations, addresses associated with the TON Foundation control at least 85.8% of the supply.
Group 1: July 6 — July 30
We found a group of 36 addresses that started mining on day one (each address received its first reward between 18:55 on July 6 and 01:04 on July 7) and ended mining on July 30:
36 addresses stopped mining on the evening of July 30
This group has 20 active addresses and 16 inactive addresses, which are frozen for 4 years after the validators voted. The active addresses hold 650 million TON.
Some additional statistics about these addresses:
1) 17 of the 20 active addresses have the same pattern: each address made only one withdrawal transaction for all funds, transferring funds to a third-party address between October 10 and December 18, 2021. Some withdrawals were made on the same day:
● December 10, 2021: Three minutes between the z6oH, KKeo, and X0zB extractions;
● December 17, 2021: Ten minutes difference between X2i3 and _QHG extractions;
● October 26, 2021: Six hours difference between 5Dk8 and A1DI extractions;
2) The other 3 active addresses made more transfers, one of which (Pvgy) was donated to the TON Foundation and used for staking;
3) All of these addresses mined tokens from the 20 Large and Small Giver contracts.
These factors suggest that this group of addresses is managed by a large whale. We do not claim that there is only one beneficiary controlling this whale. It could also be a closely connected group:
● These nodes started mining from the beginning. It is difficult to create and start a mining pool with strangers only a few hours after the announcement;
● No funds moved from 16 mining addresses (miners own private keys = miners still manage these 16 addresses);
● Most of the active addresses (15 out of 19) hold tokens without any activity: tokens only move from 15 addresses to another 15 addresses.
● The identity of the whale is still unclear, but we show below that this group has strong connections to other groups that interact directly with the TON Foundation.
This group mined 1.1 billion TON (22% of the supply).
Group 2: July 30 — August 24
The previous group of 36 nodes ended mining on July 30. After shutting down all 36 nodes on the evening of July 30, a new group of 26 nodes started on the same day:
All addresses of this group ended mining on August 24, 2020 (link, “July 30 — August 24” table)
The first group (July 6 — July 30) received their last reward at 20:24:59 on July 30. The second group (July 30 — August 24) received their first reward at 20:25:47 on July 30. So, there was only 48 seconds between these two groups when there were no mining rewards.
More statistics about this group:
● 22 addresses are active, 4 addresses are frozen after validators voted;
● Addresses from this group actively donated to the TON Foundation: 6 of them donated all tokens, and 12 donated between 10% and 40% of their balances. The fact that 6 addresses donated 100% of funds may indicate that the owners of these addresses have other addresses holding tokens.
● Three addresses participated in staking (wFRl, 1bqw, and Owud): They sent funds to addresses that interacted with the Elector contract. It is worth mentioning that Owud created multiple staking accounts by sending tokens to 13 unique addresses. Each address is a unique validator.
As mentioned before, the Large Givers mining actually ended on August 24th, but the last tokens were distributed to two addresses on August 26th:
1. Large Givers distribute 100,000 tokens each time, but in the last transaction, each address still has about 99,560 tokens left (100,000 minus the gas fee of the previous transaction).
2. F81K sent 430–450 tokens to each address, bringing the Large Givers balance to 100k again.
3. These transfers appear to have enabled mining to complete, with F81K mining 8 of the final 100k across 10 Large Givers addresses. 2 were mined by DjPI.
Large Givers token distribution per day
The launch of 26 nodes in one night was the largest number of nodes launched in a single day since July 6, and these nodes also mined tokens from all 20 Givers like the first group. Given that there was only a 48-second period of no mining rewards between the two groups, this suggests that the groups of addresses were coordinated by a single operator.
What is the reason for shutting down the node and restarting it from a different address? We did not find any technical reason, but one theory is that it is to show decentralization.
This group mined another 1 billion TON (20% of the supply).
Group 3: July 6 – August 24
As mentioned earlier, a group of 36 nodes started on July 6 and ended on July 30, but may continue under other addresses.
At the same time as the first group (from the beginning), another group of 14 nodes started on July 6th, but this group continued mining until August 24th:
“July 6 — August 24” table
This group is linked to the first group which ran from July 6 to July 30:
● The Vqwi address of this group and the X0zB and KKeo addresses of the first group most likely have a single beneficiary. The funds of these three addresses (over 40 million tokens each) are aggregated in the wqrH address.
● 13 out of 15 addresses are active. 11 of them have the same pattern as the first group: each address made only 1 withdrawal transaction between November 2, 2021 and January 14, 2020, transferring funds to a third-party address.
● This group includes putF — — a key address for TON-related operations that connects us to other node groups. We’ll come back to this address later.
This group mined an additional 940 million TON tokens (18.8% of the supply).
Group 4: July 19 — August 24
There is another group of 17 miner addresses, which we associate with the previous group. All addresses in this group received their first reward on July 19th and ended mining on August 24th:
“July 19 — August 24” table
This group includes the n__T and oQMb addresses, which are connected to the third group's key address putF via BDa2:
● oQMb sent 1 million TON to n__T (link) and 1 million TON to 8WcG through two proxy addresses (gHKM, b_g5). 8WcG is connected to BDa2 through mutual transfers;
● BDa2 sends funds to CcQ8, which receives funds from putF.
Connection between the fourth group and the third group
Additionally, w2Qp’s funds are used to provide liquidity for the OKEX and FTX integrations. This links the w2Qp address to the TON Foundation team:
● OKEX TONCOIN listing announcement November 12, 2021 (link) <> 10 million TON traded to OKEX November 12, 2021 (link);
● FTX listing announcement November 11, 2021 (link) <> 10 million TON traded to FTX November 12, 2021 (link).
This group mined another 859 million TON (17.2% of the supply).
Therefore, the fourth group of miner addresses may be related to TON Foundation contributors and the previous third group (July 6th — August 24th). Therefore, all 4 groups in the study are related to each other:
Connections between the first four groups
These 4 groups mined 3.9 billion TON tokens (78% of the supply).
Other smaller groups connected to the previous group
There are several smaller groups that started mining in August and are related to the four groups mentioned above.
Group 5: August 1
This group consists of 13 addresses centered around two large miners: w_VD and NL1O. They both received their first rewards on August 1st and stopped mining on August 24th:
August 1 table
The addresses in this group are closely connected, either through transactions with each other or through intermediary addresses:
● NL1O gathers funds from fq1d, cnw0, wQ66, CmsJ and sends some tokens to w_WD via the dVZ_ address;
● NL1O, along with a1Tl, _5as, and Qnur, sends tokens to multiple staking contracts that have a single beneficiary.
Connection of the fifth group
This group is connected to the previous four groups: NL1O sent more than 49 million TON to BDa2 (the middle address of the fourth group).
It also has direct connections to TON core community members through LJwP. We identified the wallets of several core community members using the Tonscan address book.
● LJwP sent 1,000 TON to Oleg Illarionov (brainfucker.ton, co-founder of TON Keeper) multiple times (1, 2, 3);
● LJwP sent 100 TON to some addresses of Oleg Andreev (TON Keeper co-founder). It also received 0.1–0.9 TON multiple times (1, 2, 3, 4, etc.). In addition, LJwP sent 600,000 TON to d8O2, which is associated with the Tonkeeper team. This address subsequently sent 506,803 TON to T3_d and 20,000 TON to PLZR. These two wallets are also associated with Oleg Andreev.
● LJwP sent 3300 TON and 100 TON to 968m, a wallet associated with Kirill Malev (Partner at First Stage Labs). This address has many transactions with Kirill Malev’s primary address malev.ton (1, 2, 3, 4, 5, 6, 7, 8, etc.) and owns an NFT in the TON DOGS collectible tagged “malev”.
Considering Kirill Malev’s main address malev.ton, he received TON from 44O-i, funds from wFRI from the second group, and 5_Dx from the fourth group:
Connections between Group 4 and Group 5 and community members
Group 6: August 8th – 26th
This group contains 68 addresses with similar behavior patterns. There are six key addresses in this group: Dwmn, Lwtm, F81K, M63-, tTFy, and tEVL. They mined 38 million to 45 million TON between August 8 and August 26. Other addresses sent all their funds to one of the big miners (except tTFy) on August 7 and did not mine more than 900,000 TON.
This group has two subgroups:
● The first one includes Dwmn, M63-, tTFy and tEVL. These addresses are connected through b4E9 and several other intermediate addresses;
● The second subgroup includes Lwtm and F81K.
Connection of the sixth group
All miners in this group received 0.01 TON as one of the first transactions from 2kJT — an address that was created three hours after the mainnet (testnet2) launch (November 15, 2019).
We also found that the third, fourth, fifth, and sixth groups are connected through the previously mentioned BDa2. In addition, the sixth and fifth groups are connected through some other addresses (e.g., AzQO and 91Gj).
Connections between the third, fourth, fifth and sixth groups
Group 7: August 18th – 24th
This group consists of 4 addresses that started mining on August 18 or August 19. Three of these addresses received their last rewards on August 24:
“August 18 — 24 ” table
This group has several obvious connections to other groups:
● iE3g sent all funds to LJwP in the fifth group;
● PQY_ is connected to the sixth group through dRZJ (see the schematic above);
● qzub connected with other groups via BDa2. They all sent TON to the iPIP address.
There is another interesting issue related to the ceg_ wallet. It was the first wallet to send funds to the first address of the TON Foundation (25 TON test transaction). Moreover, it is the only address to receive TON from the first address of the TON Foundation: 12 TON shortly after the first transaction and 7.5 TON a week later. This clearly indicates a connection with the TON Foundation.
All August groups mined a total of 380 million TON (7.8% of the supply).
Validator
What about the current validators? We analyzed the in and out transactions of the current blockchain validators to understand their connection with the mining group.
The data was collected on February 25th, and we analyzed a group of validators (TON does not immediately unfreeze the validators' stakes after the end of the epoch, so there are two groups of validator addresses alternating after each epoch).
We found that 170 of the 272 active validators at the time were associated with the mining group in question. Additionally, 12 validators received funds from the TON Foundation either through direct transactions or proxy addresses.
Therefore, approximately 66.9% of validators (182) received funds from a defined mining group that is likely controlled by an early group of TON miners.
The detailed results are as follows:
https://docs.google.com/spreadsheets/d/1AfWDtz6HYUDqtoFhajOlg98O2gY-4qyBKDIKOFEy5FQ/edit?gid=2026731715#gid=2026731715
Basically, we grouped validators based on their mining groups. For example, the sixth group miner Dwmn sent 46.2 million TON to 5cNc, which distributed about 20 million TON among 20 validators (1.5 million TON per validator). So, we classified all these validators into the sixth group.
Additionally, we created a validator group connected to the BDa2 address. As mentioned before, this address is the connection point between groups 2, 4, 5, and 6 of miners, and there are 55 validators connected to this address.
Data Sources
We retrieved data about TON miners using a public API. We share this data to facilitate research reproducibility and additional analysis:
● Raw data
● Structured data
● The script we use to fetch data
in conclusion
At least 85.8% of the token supply is allocated to several groups of miners that are likely interconnected. The groups that control these addresses slowly release TON tokens to the market, limiting their supply and providing a low liquidity effect that positively affects TON prices.
We cannot determine who specifically manages these addresses, but we assume that at least some of the groups are working with the TON Foundation:
● This group provides liquidity of tens of millions of TON tokens to centralized exchanges. Integrations with these exchanges are announced and managed by the TON Foundation;
● Some of this group’s tokens were transferred to TON core community members;
● Some of this group’s addresses are used for test transactions with the TON Foundation, exchanges, and other services;
The current proposal to freeze some of the addresses is a step towards reducing the problem, as the number of active tokens held by this large whale will decrease. In fact, this whale voted to freeze some of their addresses.
However, this move does not solve the problem of blockchain adoption, as the utility of the tokens will still be very limited. These few mining groups will continue to own the majority of the supply, and other potential investors will see the risk of centralization in token distribution.
As part of the token distribution, these mining groups sent funds to the TON Foundation, which already had 570 million TON on its addresses (Address 1, Address 2). We would not be surprised if the TON Foundation began distributing tokens more actively to the community and key ecosystem projects in the near future to address blockchain adoption.
Message from TON Foundation
At the end of our research, we reached out to the TON Foundation team to get their feedback on our analysis. The TON Foundation reviewed the data to further enhance transparency and engage in open discussions within the community:
We are well aware of the complexity of the ecosystem and believe that it is our mission to help everyone navigate it. This in-depth analysis of the TON blockchain, by digging deep into its mining history, reveals the current state of the ecosystem and provides a clear path to ensure that decentralization is strengthened. We believe that through the joint efforts of all stakeholders, we can achieve this goal. In conclusion, we call on all users to actively participate in building a secure, transparent and healthy crypto ecosystem. The future of TON is in everyone's hands.
