Preface

Yesterday, according to the latest news from Coindesk, a new project called TON Application Chain (TAC) is building an L2 network for the TON blockchain ecosystem. The TON ecosystem is known for its connection with the popular messaging application Telegram. The project is supported by The Open Platform, an investor focused on the TON blockchain ecosystem, and will rely on Polygon technology focused on Ethereum Layer 2 development. The team announced the news at the Ethereum Community Conference (EthCC) in Brussels, Belgium on Tuesday.

This development direction has raised many questions: At present, the development of the TON chain itself has not reached expectations, why did it choose to develop the L2 network? Was this a forced move, or was it intentional? In recent years, TON chain (The Open Network) has risen rapidly in the blockchain world, attracting a large number of users and developers with its high performance and low fees. However, beneath the surface of prosperity, the TON chain ecosystem is actually full of bubbles and faces many challenges. Although the TON chain has significant advantages at the technical level, its development is limited by a major problem: almost no VC invests and finances the TON chain project. This article will deeply analyze the reasons for this phenomenon from two aspects: the current user status and ecological status of the TON chain, and propose ways to break the situation to help the TON chain achieve truly sustainable development.

1. User Status

User stickiness is overestimated

According to Figure 1.1, the number of daily active addresses on the TON chain has shown significant fluctuations in the past six months, rising steadily from about 150,000 in the early stages, reaching a peak of about 450,000 in March, and then declining and remaining volatile. It reached another peak in May and then gradually decreased to about 367,613; the number of monthly active addresses showed an overall upward trend, gradually growing from a lower level, reaching a peak of about 3,495,180 in June and then falling slightly.

Generally speaking, we calculate user stickiness by dividing the number of daily active users (DAU) by the number of monthly active users (MAU). User stickiness is usually used to measure the degree of user dependence on the platform and the frequency of use. Higher user stickiness means that users frequently use the platform, showing higher loyalty and dependence, while lower user stickiness may indicate that users do not use the platform frequently enough and the platform is less attractive to users.

The user stickiness of the TON chain is 0.105, indicating that the penetration rate of the TON chain in the market is low. The relatively low user stickiness means that although the number of monthly active users of the TON chain has increased significantly, the proportion of daily active users is lower, indicating that the actual profitable user base is lower than the market expected. This low user stickiness also reflects users’ low daily dependence on the platform, which has an impact on long-term user retention and the stable development of the ecosystem.

Source:Tonstat Figure 1.1

2. Ecological Status

Lack of “paid” interaction data

Many popular projects on TON face a common problem: although the data such as the number of users, daily active users (DAU), and retention rate are very good, they lack actual profitability. As shown in Figure 2.1, GameFi projects such as Hamster Kombat, Pixelverse, and Yescoin are almost all zero-cost games. These projects have done a great job in attracting users and keeping users active, and seem to be prosperous on the surface. However, the projects have no actual income, which cannot be matched with user data, which makes the sustainable development of the projects questionable.

One of the main reasons is that many key actions take place in Telegram’s mini-programs, which are essentially products of web2, meaning they cannot be verified through on-chain data. This situation leads to two major problems. First, since it is impossible to track transactions and user behavior on the chain, it is difficult to accurately assess the true activity and user engagement of the project. Second, off-chain behavior makes the revenue flow and monetization model opaque, and investors and other stakeholders cannot clearly understand the actual profitability and capital flow of the project.

In this context, although the user data on the surface of the project looks impressive, investors and VCs are concerned about its actual value and return on investment. Without a clear profit model and verifiable revenue data, it is difficult for these projects to attract long-term capital investment.

Source: Telegram Figure 2.1

Lack of ecological diversity, GameFi dominates

Currently, although the TON blockchain ecosystem has achieved significant growth in infrastructure and number of projects, it does not exhibit the same ecological diversity as ETH or SOL. As shown in Figure 2.2, according to Ton.app data, there are 938 projects in the TON ecosystem, 60% of which have emerged in the past 8 months. However, nearly 20% of them are game projects.

However, most VCs are concerned about the short life cycle and uncertain investment returns of these mini-games. Many mini-games in the TON ecosystem are similar to WeChat mini-programs, with short life cycles and disappearance after rapid monetization, making it difficult for VCs to obtain positive investment returns.

Source:Ton.app Figure 2.2

Main reasons: Incompatible with EVM, few available programming languages

The TON ecosystem team faces the challenge of lack of EVM compatibility. The Ton Virtual Machine (TVM) is incompatible with the Ethereum Virtual Machine (EVM) because TON uses a completely different architecture (TON is asynchronous, while Ethereum is synchronous). Therefore, the TON ecosystem does not support development in Ethereum's Solidity programming language. According to a 2023 developer survey report (with more than 90,000 developers participating), Rust is the most popular language, with more than 80% of developers hoping to continue using it in the future. 46.4% of developers expect to use Solidity.

The three programming languages ​​available on TON are Fift, FunC, and Tact. FunC is a low-level language similar to Lisp. As the main programming language for TON smart contracts, FunC focuses on efficiency and flexibility. This low-level programming language allows developers to directly manipulate memory and perform sophisticated resource management. However, due to the low-level nature of FunC, developers need to manually manage memory and handle low-level operations, which places high demands on developers' programming skills and security awareness. If developers are not careful, they may introduce problems such as memory leaks and buffer overflows, resulting in potential security vulnerabilities in smart contracts.

Tact is a more advanced language, but it is quite complex and difficult to program. Fift is just a low-level assembly and debugging language. Although it can interact directly with the TON virtual machine, it is also suitable for low-level debugging and testing of smart contracts. It is still in its early stages, and the tools and documentation are not perfect.

In general, the development of the Ton chain is very difficult. It usually takes three people to write EVM to complete the workload of one person on the TON chain, and the development cycle is slow and long. In the blockchain, which is measured in seconds, many developers on the TON chain are actually not willing to settle down and make solid products.

3. Ways to break the impasse

1. TVM, L2 of TON Chain

Over the past year, the cryptocurrency space has seen a rapid development of a range of Layer-2 solutions. In August, cryptocurrency exchange Coinbase launched the "Base" blockchain and integrated Optimism's OP Stack on top of Ethereum, leading the trend. Subsequently, protocols such as Celo and Worldcoin also announced their plans to launch Layer-2 Rollup with OP Stack on top of Ethereum. Cryptocurrency exchange OKX also launched an Ethereum Layer-2 called "X Layer" in April and adopted Polygon's CDK.

In contrast, if the TON chain can launch its own Layer-2 solution, TVM, and is compatible with Ethereum's EVM. This compatibility brings great convenience to developers, reduces the difficulty of writing code, and enables them to easily migrate smart contracts and applications in the Ethereum ecosystem to the TON chain. This not only simplifies the development process, but also greatly reduces development costs and time. At the same time, the high performance and low-cost characteristics of the TON chain further enhance its appeal, providing developers with a more efficient and economical development platform.

By being compatible with EVM, the TON chain can not only utilize existing Ethereum development tools and infrastructure, but also attract more Ethereum developers to the TON ecosystem. This strategy will not only help expand the ecological diversity of the TON chain, but also promote the birth of more innovative projects, laying a solid foundation for the continued development of the TON chain.

2. Focus shifts to infrastructure construction

Developers of the TON chain should focus on infrastructure projects for the TON ecosystem. Although the market has high expectations for the TON ecosystem, unless more projects that can create inflection points emerge, the TON ecosystem may be like other short-lived projects and find it difficult to continue to attract investors.

Infrastructure projects are the core of any blockchain ecosystem and can provide solid technical support for the entire ecosystem. Strengthening infrastructure construction can not only improve the overall performance and reliability of the TON chain, but also provide developers with a better development environment. For example, developing more powerful node software, optimizing consensus algorithms, increasing network throughput and reducing latency will directly enhance the competitiveness of the TON chain.

In addition, focusing on infrastructure projects will help attract more investors. Investors are usually more interested in projects with long-term development potential, and solid infrastructure is the key guarantee for the long-term development of projects. By improving infrastructure construction, the TON chain can demonstrate stronger technical strength and development potential, thereby winning the trust and financial support of more investors.

IV. Conclusion

The development of TON chain in the blockchain ecosystem is full of opportunities but also faces many challenges. Despite significant growth in infrastructure and number of projects, the TON ecosystem still has significant shortcomings in user stickiness, profitability, and ecological diversity. Low user stickiness, lack of actual income, and opacity of off-chain behavior make it difficult for the TON chain to continue to attract long-term investors.

At the same time, the TON ecosystem has a single type of project, mainly concentrated in the GameFi field, with a short life cycle and uncertain investment returns. The main reason behind these problems is the incompatibility between the TON chain and EVM and the complexity of existing programming languages, which makes the development cost high and the cycle long, further restricting the diversity and innovation ability of the ecosystem.

To solve these difficulties, TON chain is about to launch EVM-compatible Layer-2 TVM, which is a feasible solution. It simplifies the development process and attracts more Ethereum developers. At the same time, developers should shift their focus to infrastructure projects and enhance the overall competitiveness and attractiveness of TON chain by improving technical strength and development environment. Only through these strategic adjustments can TON chain achieve real sustainable development and avoid becoming a short-lived project.