Introduction: Blockchain Thinking
$TON——The open network, a project that almost no one cares about in the Chinese-speaking community, has been rising steadily despite market fluctuations recently, and its market value has quietly entered the top ten.
What is TON? What is the difference from ordinary public chains? Why is it said to be the biological son of telegram? Today I will help you understand The Open Network.
What is The Open Network?
This question is best answered. I threw TON’s official 104-page white paper directly to GPT, and it told me:
$TON——The open network, a project that almost no one cares about in the Chinese-speaking community, has been rising steadily despite market fluctuations recently, and its market value has quietly entered the top ten.
What is TON? What is the difference from ordinary public chains? Why is it said to be the biological son of telegram? Today I will help you understand The Open Network.
What is The Open Network?
This question is best answered. I threw TON’s official 104-page white paper directly to GPT, and it told me:
It still feels like the familiar public chain white paper, with millions of transactions per second easily. As for whether it can be done, there is currently no transaction volume on TON, so it must be unsatisfactory. Let’s take a closer look at its high-speed implementation. Network construction is mainly achieved through parallel expansion. TON consists of a main chain (masterchain) and multiple work chains (workchains). Each work chain can be divided into multiple shard chains (shardchains).
Validators must also adopt advanced hardware similar to that used on the Solana and Aptos blockchains.
Therefore, in theory, the TON system can accommodate up to 2^32 work chains, and each work chain can be subdivided into up to 2^60 shard chains, with almost instantaneous cross-shard and cross-chain Communication capabilities enable millions of transactions per second.
To sum up, TON is a high-performance public chain that uses its own TVM virtual machine, which is incompatible with EVM. The smart contracts on TON are written by FunC, a new voice created by itself. It adopts Block Proof of Stake (BPoS) consensus and maintains Validators who own and stake the TON native cryptocurrency participate in block verification and consensus.
Like Ethereum, TON's consensus is also converted from POW to POS, and currently more than 98% of the tokens with liquidity are mined through POW. This makes us have to talk about the ups and downs of TON's development history.
A brief history
2018
Brothers Pavel and Nikolai Durov, founders of Telegram Messenger, began exploring blockchain solutions for Telegram Messenger. They found that there was currently no Layer 1 blockchain that could support Telegram’s 100 million user base, so they decided to design their own Layer 1 chain, which was called Telegram Open Network at the time.
Only then did TON (then called Grams) raise $1.7 billion in private placements.
October 2019
The Telegram team has released a series of documents detailing the design of the TON blockchain. Telegram launched two TON testnets, one in spring 2019 and the second in November 2019.
The U.S. Securities and Exchange Commission (SEC) sued Telegram, accusing it of conducting an unregistered securities offering. Telegram claimed the SEC’s accusations were baseless but agreed to delay TON’s launch until the legal issues were resolved.
March 2020
Telegram ultimately decided to give up amid an ongoing standoff with U.S. regulators.
May 2020
The Telegram team reached a settlement with the SEC and was forced to stop work on The Open Network, paying an $18.5 million settlement and agreeing to return $1.7 billion in funds raised in a private placement to investors. In order to avoid the team's suspension of work from affecting the development of the project, and to allow enthusiasts to continue to study the technology, the Telegram team put all available tokens in the network into smart contracts so that anyone can mine fairly.
July 2020
The miner code is published in the code repository, and tutorials on how to mine are also published on the project website. All tradable Toncoin tokens (98.55% of total supply) are open to mining. At that time, the blockchain was still in the testnet stage, and the tokens had no value and could only be used for testing purposes. These tokens are placed in a special Giver smart contract and anyone can participate in mining.
2020-2021
NewTON, a small team of open source developers, took a deep dive into TON’s codebase, architecture, and documentation. They followed the design in the original TON document and restarted active development of TON.
May 2021
Testnet 2 remained stable for a long time and the community voted to rename it Mainnet. The NewTON team also changed its name to the TON Foundation
April 2022
The TON Foundation announced the establishment of a US$250 million ecosystem fund, the TONcoin Fund, with funds coming from exchanges and institutions such as Huobi, KuCoin, MEXC, 3Commas Capital, and TON Miners.
At the same time, the foundation raised $527 million from 176 unique users, all of which were voluntary contributions from miners.
June 2022
TON POW mining is over, and users are mining approximately 200,000 TON every day. At the same time, DWF Labs joined its $25 million TON accelerator program, and DWF Labs will contribute to the token economics, market making and liquidity provision of the TON ecosystem. DWF Labs’ support includes investments and other ecosystem services.
February 2023
TON VOTE passed a "TON Token Economic Model Optimization Proposal" which proposes to temporarily freeze inactive mining wallets for 48 months, which have never been activated and do not have any outgoing transfers in their history. There are currently 171 inactive mining wallets. These 171 wallets hold a total of more than 1.081 billion TON, accounting for about 21% of the total TON supply at that time.
Now
As the network continues to grow, new $TON is created as a reward for validators’ work. Approximately 0.6% of the total supply of $TON is created each year.
Anyone can become a validator, all it takes is a powerful server and a large amount of Toncoin to be staked. The TON ecosystem has a nominator that allows stakers to lend tokens to validators for staking and share the income at the same time.
What's the difference
The TON team wrote a paper specifically to explain the differences between TON, Solana and Ethereum. I summarize the core differences as: the two important concepts of "resource payment" and "asynchrony":
Resource payment:
1. In the TON blockchain, each smart contract needs to pay its own resource cost. This means that each smart contract holds a certain number of TON tokens and uses these tokens to pay for the resources it needs to run, such as computing, storage, and network transmission.
2. This design is different from Ethereum. In Ethereum, the user pays the transaction fee, but in TON, the smart contract itself pays the fee. This design prevents users from directly bearing costs, but also means that the smart contract needs to hold enough TON tokens to cover its running costs.
3. If a smart contract’s TON token balance is exhausted, the contract will eventually be deleted. This is an automatic cleanup mechanism that avoids data bloat on the blockchain.
Asynchronicity:
1. In the TON blockchain, calls between smart contracts are asynchronous, not atomic. This means that when one smart contract calls a method of another smart contract, the call is not executed immediately, but is processed on some future block after the transaction ends.
2. This design allows for higher scalability because it does not require all transaction processing to be completed in one block. But it also makes it more difficult to maintain consistency and atomicity between transactions.
3. For example, if contract A calls a method of contract B, this call will not be executed immediately, but will be processed on a future block after the transaction of contract A ends. This means that Contract A's transaction can complete before Contract B's call is processed.
These two concepts are the core design of the TON blockchain, enabling it to achieve higher scalability and flexibility, but also increase the complexity of development and maintenance.
Friends who are familiar with public chains have a sense of deja vu. Yes, the notorious "death-level" public chain ICP-Internet Computer also has a similar design. The project pays gas for users and uses an asynchronous architecture for performance. .
This is understandable, but asynchronicity will make the development of DeFi on the public chain difficult and slow. This is also the biggest point of dispute in the ICP community. After all, when we measure the value of a public chain now, we will use TVL to measure it, and a public chain in The lack of DeFi and little TVL in the early days meant that there would be no wealth effect, and it would be difficult to attract public attention. This is why most people don’t understand this behemoth with a market value of US$6 billion.
Obviously, the asynchronous architecture limits the development of TON in the DeFi field, but it also confirms that Mass adoption is the true vision of TON. TON was described at the outset as a platform for decentralized applications and services similar to WeChat, Google Play or the App Store, or even a decentralized alternative to Visa and Mastercard payment processing services.
To achieve Mass Adoption, high performance is the cornerstone, and low-threshold usage scenarios and huge traffic entrances are the key. This is also TON's core competitiveness - deep binding to the Telegram ecosystem.
Network ecological & economic model
Ecology on the chain
The TON ecosystem can only be considered in its infancy. There are currently no new models or highly playable projects, and the project TVL is also pitiful. The total TVL on the TON chain is only US$10 million. Mainstream projects can be found at https://ton. Found in app/, not listed one by one.
Mainly introduce two projects directly funded by TONcoin.Fund:
Fanzee
Fanzee is a TON-based Web3 sports game and fan economy platform, and has received $2 million in ****Pre-seed round investment. **** Led by TONcoin Fund and First Stage Labs, with participation from MEXC Global, Huobi Global, KuCoin Exchange, VLG Capital, Orbs, 3Commas.io and Hexit Capital.
Fanzee has launched a staking program powered by smart contracts, the first DeFi tool in TON history to allow staking on TON-based Jetton (TON’s token standard, similar to ERC20). Users can choose from three fixed staking options – three months, six months or 12 months – and participants will receive special Bond NFTs to help guarantee the liquidity of their staked tokens.
Megaton Finance
Megaton Finance was developed by South Korean blockchain technology company OZYS. Its current TVL has reached US$7.3 million, accounting for about 70% of TON’s total TVL, and it dominates the TON DeFi track.
Megaton Finance raised US$1.5 million in seed round financing at an early stage, led by TONcoin fund, with participation from Cypher Capital, First Stage Labs, Orbs, MEXC Ventures and other institutions.
The project token $MEGA was launched on MEXC in March this year and fell 98% from its high point.
And the latest To C products funded by the TON Foundation:
Wagmi11
Decentralized cryptocurrency and sports prediction markets on the TON blockchain. Wagmi11 enables enthusiasts to predict the outcomes of cryptocurrencies, sports, geopolitical events, and more. Users stake a certain amount of TON as fees and predict the outcome of events.
A6g.events
The ticketing protocol for the TON ecosystem. The Anything.events team is developing the TON blockchain ticket entity standard and implementing core use cases for ticket purchasing, management, verification and anti-fraud measures.
Questbook
Integration of Telegram and TON for better grant management process. The Questbook team now supports Telegram notifications for proposals and comments, integrates the TON wallet for direct payments, and connects Tonkey for multi-signature wallet functionality.
economic model
The initial total amount of TON is 5 billion. In terms of token distribution, the team owns 1.45% of the tokens, and the remaining 98.55% were mined by POW in the early stage. At present, the network consensus has changed from POW to POS, and the total amount of TON is approximately Inflation is carried out at a rate of 0.6% per year to reward POS miners.
The current total supply is 5.09 billion TON.
In February 2023, TON VOTE passed a "TON Token Economic Model Optimization Proposal", which proposed to temporarily freeze inactive mining wallets for 48 months. These wallets have never been activated and do not have any mining records in their history. Make a transfer. There are currently 171 inactive mining wallets. These 171 wallets hold a total of more than 1.081 billion TON, accounting for about 21% of the total TON supply at that time.
Currently, POS validators have staked approximately 480 million TON. In summary, the circulating supply is 3.53 billion TON. Due to TON’s special historical reasons, it is unlike other new public chains where early investment institutions and project parties hold a large number of tokens and are held hostage by capital.
The advantage is that you don’t have to worry about institutions unlocking and smashing the market, but the disadvantages are also very similar. In the early days, large miners held more concentrated coins, replacing institutions. Now the top 100 whale addresses hold more than 50% of the total tokens. Although the community's vote to freeze inactive mining wallets for 48 months will temporarily alleviate this part of the selling pressure, due to the idea of decentralization, these wallets are unlikely to be permanently frozen.
In comparison, the total amount of coins held by the top 100 Bitcoin addresses is only 13.63%. This unreasonable token distribution will pose a great threat to the TON ecosystem in the future.
In addition to temporarily freezing inactive wallets, the community also voted to reduce the circulating supply by burning half of the transaction fees, but currently only 350-400$TON can be burned per day, which is simply too much for the initial issuance of 5 billion. It’s a drop in the bucket.
If the TON community has no way to dilute the $TON in the hands of early giant whales, then directly investing in $TON is still risky.
The steady rise in the price of $TON in the short term is most likely the result of the market value management team cooperating with the eco-friendly hype. $TON ranks 11th in market value and 68th in trading volume, not to mention that this market value does not cover the frozen part of $TON , if included, the total market value will reach 8.5 billion US dollars, surpassing SOL and ranking 9th in the encryption market value.
The misalignment between trading volume and market value usually means that the project is highly manipulated, not to mention that DWF Labs announced in June that it would contribute to the token economics, market making and liquidity provision of the TON ecosystem. DWF Labs’ support includes investments and other ecosystem services.
Although the economic model is not optimistic, in terms of adoption, TON does have the opportunity to lead the encryption industry into the next era.
Telegram and TON lead crypto mass adoption
As the original initiator of TON, Telegram has deep ties with the TON team. Du Rove, CEO of Telegram, publicly announced the TON platform in a statement, saying that he holds some Bitcoin and TON.
Telegram also uses TON as the core of the Telegram ecosystem to provide web3 infrastructure support for all tApp developers in Telegram.
The tApp currently officially launched and connected to TON is mainly the @wallet custodial wallet. 800 million+ users can directly call the wallet through the chat interface to transfer transactions at will, make deposits and withdrawals directly through bank cards, and can use @wallet directly Pay for many services in the telegram ecosystem. For example, buy telegram Premium directly, or buy a virtual eSIM phone card in @Mobile. You can even use TON to trade usernames in telegram.
The one-stop purchase service directly empowers TON. Many public chains may have complete ecosystems but do not have a usage scenario for traditional users. They can only play in small circles. However, TON is born with the protection of Telegram and enjoys Telegram. It brings hundreds of millions of traditional traffic and the most direct application scenarios.
Additionally, Telegram plans to launch more tApps in its ecosystem that will further expand TON’s capabilities, making it not just a cryptocurrency platform but a comprehensive decentralized application ecosystem. The ecosystem is capable of supporting not only cryptocurrency transactions but also various decentralized applications and services. This will provide a simple and easy entry point for traditional users to easily access and use web3 technology.
In the final analysis, the large-scale adoption of cryptocurrency is still a threshold issue. In fact, many traditional users do not care about the degree of decentralization. They come to use the product, not to join the consensus. This is something that many crypto fundamentalists cannot understand at all. It doesn’t matter what cryptocurrency you use if it is decentralized? I think this issue is not a black and white choice. Web2 and web3 are now like two unrelated Layer1s. They also need a cross-chain bridge. Let's call this type of bridge web2.5.
For example, the Telegram @wallet app is a managed wallet. Originally, I would say: No your key, no your coins. But now I have discovered that this method can indeed allow traditional users to gain access to cryptocurrency at very low learning costs, sacrificing some of the decentralized features, and lowering the threshold for entering the encryption industry. This is web2.5, which is also the development of cryptocurrency. The most direct path to large-scale adoption is to first guide a large number of users to the "yard" of the encryption industry through this channel, and then through more detailed education, let some interested people enter the truly decentralized "house" Go inside.
TON is by far the best public chain dedicated to developing cryptographic mass adoption, and this is also its core competitiveness.
Summarize
To sum up, the Web2.5 created by the combination of TON and Telegram is indeed worth looking forward to, but the huge holdings of early miners are like the Sword of Damocles hanging over TON’s heads, and users and developers will also be wary. How to limit or dilute the shares held by giant whales is the biggest problem facing TON.
Although Telegram only needs TON as the underlying component to provide fast and effective performance, the price of $TON will inevitably affect the income of POS staking verifiers. If the currency price falls, verifiers cannot make ends meet or withdraw, which will also indirectly affect the entire The performance of a public chain.
There are two possibilities. First, decentralization is completely sacrificed and the community votes to permanently freeze the whale address. This makes it impossible for TON to become a chain for asset storage. It is more like Tron, low-cost and efficient, and only serves as A bridge for asset trading.
Second, airdropping $TON to newly participating users will dilute the holdings of giant whales. This will sacrifice the interests of some early investors, but it has the opportunity to exchange for more prosperous development of the ecosystem.
let us wait and see.
