The market conditions this week continue to show no signs of improvement. Today, let’s continue discussing the current development status and future directions of the TON on-chain ecosystem, as well as which areas individual retail investors should pay attention to.
TON DeFi Status
Although DeFi is not the main narrative in this cycle, its development remains a significant indicator of the vitality of any public chain ecosystem, and it is foundational. This holds true for TON as well.
Currently, the most basic DeFi applications on TON, such as DEX, lending, and liquidity staking, have laid the groundwork to meet the basic needs of most retail investors. However, there are still many shortcomings for advanced DeFi players or whale farmers. Here are the five most important areas that the TON ecosystem needs to continue developing:
- Introduction of mainstream assets BTC and ETH.
- More support for cross-chain bridges.
- Oracles.
- Layer 2 DeFi yield protocols.
- Memecoin infrastructure.
Among these, the first two points—cross-chain bridges and support for other major assets—are fundamental. During the explosive growth of TVL on TON from 100M to 700M in 2024 Q2, native USDT support was the biggest catalyst. The author believes that the key to surpassing 1B TVL in the next phase lies in supporting other mainstream assets like BTC and ETH, coupled with providing more liquidity through third-party bridges, which is also the development goal for the next quarter according to the current TON Foundation roadmap.
The third point, oracles, is crucial for determining whether more complex DeFi protocols can be implemented and is a key factor for many large investors in deciding whether to participate in projects. Currently, the mainstream oracle in the TON ecosystem is provided by Redstone, offering price feed functions. However, Redstone still lacks sufficient trust among many whale players. Introducing oracles with strong capital support like Chainlink or Pyth is crucial for taking TVL to the next level.
The fourth point mentioned, Layer 2 DeFi yield protocols, corresponds to the fact that while TON’s first-layer DeFi Lego protocols are already in place, there are still few second-layer DeFi Lego yield projects focusing on APR earnings, such as collateralizing stablecoins, packaging interest-bearing assets, and yield farming strategies.
The final point the author considers to be the trend of this cycle is the mainstreaming of Memecoins. The author believes that the most successful aspect of this cycle for the SOL ecosystem was not driven by DeFi applications but by the vigorous development of Memecoins, which led to an increase in DEX TVL. Therefore, MemeFi is also a key area that the author believes should be vigorously developed.
Although many teams are already working in this direction, such as TON Raffles, Ton UP, Thunder Finance, etc., the promotion of Memecoins, in the author’s view, requires official collaboration with venture capital to ignite the tipping point, similar to $BONK and $WIF on Solana, to generate wealth effects and ignite the subsequent MemeFi ecosystem.
Mini APP in TON
The biggest feature of the TON ecosystem, in the author’s opinion, is the Telegram Mini APP. Although most of the current TON Mini APPs are gaming projects, mainstream DeFi applications on TON also have two front-end interfaces: a regular web-based Dapp and a Telegram Mini APP front-end.
The author believes that the development of Telegram Mini APPs effectively narrows the gap between TON’s DeFi services and Telegram users, capturing more new users on mobile devices.
However, on the other hand, complex DeFi applications are not suitable for mobile experiences and security. Mini APPs or Telegram Chatbots are more suitable for the time-sensitive Memecoin field. Perhaps we need to wait for the emergence of the “golden dog” on TON to attract a large number of players to become new users of Mini APPs.
The Open League Season 5
Finally, let’s talk about the recently started The Open League Season 5 competition. Frankly, the author is somewhat disappointed with the current state of TON DeFi projects so far. Only six protocols are participating, and they are exactly the same as those in Season 4, with no new projects added. For already launched projects, only the NFT lending protocol DAOLama and its token $LLAMA have squeezed into the top ten.
Currently, the standings show that Storm Trade, a derivative perpetual contract protocol ranked third in the last season, is now ranked first with significant growth in TVL. Tradoor, also in the derivative perpetual contract track, has regressed rather than progressed. EVAA, a lending protocol, ranks second, and DAOLama, an NFT lending protocol, ranks third. Occupying the fourth and fifth places are the two major DEX protocols DeDust and Ston.Fi.
Conclusion
This article focuses on the development of TON’s DeFi. We believe there is still plenty of room for development in DeFi, although one of the issues may be related to the fact that TON’s development code is in a completely new language, which increases the development threshold.
Currently, we have not seen strong support from venture capital, such as Multicoin and Jump Crypto’s relationship with Solana, nor have we seen representative developers emerge, such as AC in Ethereum’s DeFi ecosystem. However, it is still too early to draw conclusions, and TON’s DeFi development remains worth continued attention.
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