Telegram, one of the most popular messaging apps globally, has a cryptocurrency called TON coin. Despite facing significant challenges, including a $1.7 billion ICO being shut down by the SEC, TON coin has managed to thrive, ranking among the top 10 cryptocurrencies. But is it worth the hype? Let's explore its strengths, weaknesses, opportunities, and threats.
Strengths
Tokenomics: Out of 5 billion total tokens, around 70% are circulating, a healthy amount. In 2023, a vote successfully froze the wallets of inactive miners, locking away roughly 1 billion tokens for four years. This move prevents a market flood and benefits token holders. Additionally, only 1.45% of the tokens were allocated to the team, which is significantly lower than other similar projects.
Technology: TON has its own blockchain, known for high transactions per second (TPS) and rapid block finality time. It recently set a record for TPS, exceeding 100,000, thanks to its unique architecture. The network's flexibility and scalability are enhanced by a feature called asynchronicity, designed to handle mass adoption.
Future Focus: TON has ambitious plans, focusing on improving network infrastructure to support sophisticated decentralized applications (dApps). The project is backed by $340 million raised for ecosystem funds, demonstrating a commitment to future growth and goal achievement.
Weaknesses
Complex Programming Languages: TON supports languages such as FunC, Fift, and Tact, which are not widely used, potentially causing compatibility issues with other ecosystems and making it harder to attract developers. As of October 2023, there were only 28 full-time developers in the TON ecosystem, compared to Ethereum's 1,900.
Decentralization: With only 340 validators staking 270 million TON, TON lags behind other networks like Solana (2,000 validators) and Ethereum (over 1 million validators), falling short of true decentralization.
Technical Issues: Despite high TPS claims, a critical problem caused TPS to drop to one for three days due to network flooding by Chinese miners. This incident indicates that TON might not yet be ready for prime time.
Opportunities
Telegram Integration: Telegram, with over 900 million users, offers a vast adoption potential for TON. TON is already used to fuel many Telegram dApps, and the rumored Telegram IPO could boost legitimacy and development interest. If Telegram succeeds, TON could onboard millions to crypto seamlessly.
Infrastructure Enhancements: TON's native wallet, Ton Space, and the integration of USDT (Tether) on its network make crypto usage convenient for Telegram's massive user base. This enhances developer opportunities to integrate crypto into various content and games, supporting mass adoption.
Threats
Reliance on Telegram: While close ties with Telegram open many doors, they also make TON dependent on Telegram's growth. Competing apps like WeChat, with a larger user base and easier app development, pose a significant threat. Other messaging apps, such as WhatsApp or Line, might also launch their tokens.
Legal Issues: TON has faced legal challenges in the past, and future SEC scrutiny could be problematic. The rebranded TON coin was launched by a separate entity, Ton Labs, to avoid SEC regulations, but this legal workaround may not hold under intense scrutiny.
Conclusion
Despite challenges, TON coin is in a strong position due to its advanced technology, solid tokenomics, and close relationship with Telegram. While there are significant hurdles to overcome, the potential for mass adoption through Telegram's vast user base makes TON coin worth considering. If successful, this partnership could pave the way for onboarding the next billion users to crypto.
