Exploring the Development and Future Potential of the TON Ecosystem

July 3, 2024

Since the beginning of 2024, the TON ecosystem has seen explosive growth. Between May 25 and June 17, Toncoin experienced a maximum increase of 79.7%, Notcoin surged by 700%, and Fishcoin rose by 400%.

This strong wealth creation effect has attracted substantial speculative capital. So, how can we partake in this grand feast? This article reviews the past and present of TON, its core logic, and the development of its ecosystem.

1. Project Background

Basic Information

Name: TON (The Open Network)
Founders: Pavel Durov, Nikolai Durov
Operating Team: TON Foundation
Website: TON: The Open Network for Everyone
Social Media: TON-Twitter

TON (The Open Network) is a decentralized layer-1 blockchain designed for billions of users. It offers scalability and sharding capabilities, addressing issues such as high transaction fees, slow transaction speeds, inter-chain communication, and scalability.

The primary operating team for TON is the TON Foundation, a non-profit organization aiming to provide 500 million users with digital identities, data, and assets by 2028. Backed by Telegram, the TON blockchain is a critical means to achieve this goal. Although TON’s current growth is vigorous, its development history has been turbulent.

A Roller-Coaster Development Journey

2017, Project Launch: Telegram founders Pavel Durov and Nikolai Durov began developing a blockchain project named Telegram Open Network (TON) and planned to launch its native cryptocurrency, Gram.
2018, Initial Coin Offering (ICO): Telegram raised approximately $1.7 billion through an ICO, making it one of the largest ICOs at the time, attracting major venture capital firms and individual investors. The ICO also caught the attention of the U.S. Securities and Exchange Commission (SEC).
2019, Development Progress: TON blockchain introduced sharding technology to improve scalability and processing speed, and the testnet was released for developers to test.
2020, Regulatory Issues and Project Turn: Telegram announced its withdrawal from the TON project, transferring development work to an independent open-source developer community. The project was renamed “The Open Network,” and the token was renamed Toncoin. Funds raised through the ICO were refunded.
2021, Community Takeover and Development: The TON Foundation, founded by Anatoliy Makosov and Kirill Emelianenko, took over the project, continuing to promote the development and promotion of TON.
2023, Return to Telegram: Telegram officially announced that it would adopt the TON blockchain as its preferred Web3 infrastructure and planned to integrate it into Telegram’s user interface. Telegram also announced its IPO plans.
2024, Ecosystem Expansion: The TON blockchain’s application ecosystem continued to expand, covering finance, storage, payments, domain names, and more. Projects like PunkCity, PUNK, and HyperGPT within the TON ecosystem began attracting widespread market attention. In February, Telegram announced that it would exclusively use the TON blockchain and Toncoin for all transactions and payments with channel owners.

TON has navigated a long journey from its inception to its current booming state, showing its strong vitality through each step of progress, from initial narrative to tangible project implementation.

Core Narratives for Users

Throughout TON’s development, Telegram’s influence has never been far away. While most public chains promote their innovative technologies, TON leverages Telegram’s 900 million monthly active users to focus on user needs and convenience.

Moreover, Telegram aims to transition from being just a social communication platform by diversifying its product line, integrating payments with everyday life, and offering potential-rich Bots. This strategic shift not only showcases Telegram’s ambitions but also hints at the limitless potential of the TON blockchain in the future.

Telegram currently has over 1.3 billion registered users and 900 million monthly active users. Freedom of speech and privacy protection were Telegram’s missions at its inception, making it a haven for cryptocurrency.

Almost all Web 3.0 projects have Telegram communities for project promotion, announcements, and community interaction. This Web3-friendly environment provided by Telegram significantly supports the TON ecosystem, offering a community foundation for project incubation and ICOs.

Growing Market Recognition

As of this writing, the market cap of the TON blockchain has reached $18.759 billion, making it the ninth-largest cryptocurrency. The TVL of the TON blockchain has been growing rapidly since April, currently at $605.72 million USDT, ranking 15th among public chains. Although the TVL of the TON blockchain is increasing fast, it has not yet matched its market cap, leaving room for improvement.

2. Funding Information

2018: Raised $1.7 billion through its initial ICO but refunded part of the funds due to SEC legal action.
April 2022: Huobi Incubator, KuCoin Ventures, and MEXC Pioneer Fund jointly invested $250 million to establish the TON Foundation, focusing on supporting DEX and NFT projects on the TON blockchain.
October 2023: MEXC Ventures provided tens of millions of dollars in investment to promote the Web3 ecosystem within Telegram.
November 2023: Animoca Brands invested in research and analysis platforms to support third-party mini-programs and game projects within the TON ecosystem, becoming the largest validator.

Telegram initially focused on protecting user privacy without obvious revenue channels, raising hundreds of millions through bond issuance to maintain daily operations. Since 2022, Telegram has been exploring revenue models and recently announced that it is nearing profitability.

In 2023, Telegram founder Pavel Durov proposed an IPO within the next two years, with the company’s current valuation exceeding $30 billion, potentially choosing to list in the U.S.

Both TON and Telegram are currently in a period of robust development. Investing in the TON ecosystem is equivalent to betting on the immense potential of the Web2 social platform Telegram transitioning into a comprehensive Web3 platform.

3. Technical Features

Development Languages

The TON blockchain smart contracts do not use popular languages like Solidity, Rust, or Vyper but instead use three programming languages: Fift, FunC, and Tact. Fift focuses on low-level development with an emphasis on operational efficiency and is difficult to master.

Tact, a newly introduced high-level language for TON, resembles Typescript in syntax, aiming to reduce development difficulty. FunC is similar to C and is currently the preferred choice for development. Given Tact’s efficiency, mainstream developers might switch to using Tact in the future.

Cutting-Edge Technologies

Asynchronous Smart Contract Calls

Unlike Ethereum and other public chains, TON’s smart contract calls use an asynchronous model, enhancing the system’s scalability. When one smart contract calls another, the call does not execute immediately and does not need to complete all transaction processing within one block.

However, this asynchronous mechanism also increases the complexity of developing and maintaining applications on the TON blockchain, presenting higher technical challenges for developers.

Infinite Sharding

The TON blockchain is designed with three types of chains: the masterchain, workchains, and shardchains.

The masterchain is the core of the entire network, responsible for storing global metadata and consensus mechanisms. It records the status of all workchains and shardchains, ensuring consistency and security across the network.

Workchains are independent blockchains handling specific types of transactions and smart contracts, with each workchain able to have its own rules and features to meet different application needs.

Shardchains are subchains of workchains, used to further divide the workload of workchains, enhancing processing capability and scalability. Each workchain can contain multiple shardchains, independently processing parts of transactions to achieve efficient parallel processing.

Privacy Protection

The TON chain uses TON Proxy to hide the IP addresses of TON nodes, constructing a decentralized VPN service. Combined with TON DNS and the TON P2P network, it protects user privacy.

Relative Advantages

Although asynchronous smart contract calls and sharding technology are used in projects like Ethereum 2.0, Polkadot, and NEAR Protocol, TON integrates various technologies, surpassing Ethereum and Solana in metrics such as time-to-finality.

More specific technical features can be found on the TON official website.

4. Market Analysis

Tokenomics

Token Function: $Toncoin serves as the native token on Telegram, used for discounted payments for Telegram Premium membership and other virtual products. On the TON blockchain, $Toncoin can be used for transaction fees, staking, cross-chain transactions, decentralized data storage, proxy services, and more.
Token Supply: The maximum supply of $Toncoin is 5 billion. As of June 28, 2022, all $Toncoin has been mined, marking TON’s complete transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). An annual token inflation of 0.6% (approximately 3 million tokens) will be used to reward validators for maintaining network security.
Token Distribution: Initially, 1.45% of the 5 billion $Toncoin tokens were allocated to the team, with miners receiving 98.55% through mining. In February 2023, TON initiated a community proposal to freeze 171 inactive early wallets for 48 months, totaling 1.08 billion $Toncoin (about 21% of the total), reflecting the TON community’s strong confidence in the chain’s development.

Secondary Market Analysis

Market Cap: As of June 3, 2024, Toncoin’s market cap is $18.759 billion, ranking No.9, with a fully diluted market cap of $39.382 billion. The circulating supply is 2.432 billion tokens, and the total supply is 5.107 billion tokens.
Token Distribution: As of June 3, 2024, according to CoinMarketCap data, 85.45% of holders own 0-$1k Toncoin, 14.16% own 1k-100k Toncoin, and 0.38% own more than 100k Toncoin.
Whale Analysis: Whales hold 68.68% of TON, while retail investors hold 31.32% of TON.
Holding Time Analysis: 29.20% of holders have held Toncoin for over a year, and 16.7% of traders hold Toncoin for less than a month, indicating a high proportion of diamond hands, reflecting strong market confidence in TON’s prospects.
Top Holders: According to Etherscan data, the top 10 addresses hold 29.99% of Toncoin tokens, indicating a relatively dispersed token distribution and a healthy market state.
Price Trends: Over the past year, Toncoin’s price has risen from $1.39 to $8.0, an increase of over 400%, demonstrating the market’s high expectations and wealth creation effect for the TON blockchain.

5. Ecosystem Development

The TON ecosystem currently hosts over 500 DApps and numerous Telegram Bots, covering various domains including infrastructure, development tools, DeFi, GameFi, NFT, SocialFi, and more. The ecosystem’s vertical sub-sectors include launchpads, wallets, cross-chain bridges, staking and lending, DEXs, various blockchain games, collectibles, and more.

Ecosystem Assistant Telegram Bot

Telegram Bots are automated robots running on Telegram that can significantly enhance community building, asset management, information aggregation, and project promotion.

For general users, official and third-party Telegram Bots can provide the latest crypto news and market updates.
For general Web3 communities, Telegram Bots can offer automated Q&A, FAQ solutions, manage community activities, competitions, and airdrops, fostering interaction among community members.
For DAO organizations, Telegram Bots can provide the latest governance proposals and discussion notifications, allowing DAO members to vote and participate in governance decisions through the bots, greatly simplifying the DAO governance process.
For general project teams, Telegram Bots enhance information transmission efficiency within the project community, and an engaging bot can attract users to participate in project development.
For TON ecosystem projects, Telegram Bots are indispensable, allowing 900 million users to participate in project airdrop activities without barriers, aiding project promotion.

Telegram Bots are not only versatile but also easy to develop. Telegram provides mature documentation and API technical support for bot development. With clear bot functionality requirements, developers can use programming languages like Python or Node.js to implement functionalities, combined with cloud server support, to easily build their own bots.

Meanwhile, numerous Telegram Bots are already open-source on GitHub, offering opportunities for zero-code base usage.

Leading DeFi Platform STON.fi

STON.fi is currently the largest DEX on the TON blockchain, supporting over 280 trading pairs. It employs three technologies: Automated Market Maker (AMM), Request for Quote (RFQ) model, and Hash Time-Locked Contracts (HTLC), inheriting Uniswap’s low slippage feature while enhancing transaction reliability and security.

STON.fi’s token is $STON, with a total supply of 100,000,000 $STON. The token distribution strategy is as follows:

With the explosive growth of the TON ecosystem, STON.fi’s TVL has surged since February, currently reaching $262.2 million USDT, ranking third in the TON ecosystem.

Overall, STON.fi is undoubtedly the top-tier DEX in the TON ecosystem, and one of the top-tier projects in the current TON ecosystem, deserving continuous attention.

Leading Launchpad TonUP

TonUP is a star asset issuance platform based on the TON blockchain, aiming to help project teams achieve successful asset issuance financing.

August 2023: TonUP was established and completed its first IDO project token issuance at the end of the month, raising 80,000 Toncoin for Tap Fantasy within 32 minutes.
October 2023: TonUP launched the TONversation column, delivering premium content. The team announced the completion of seed round financing led by TONCoin Fund, with follow-up investments from Foresight X, Waterdrip Capital, BitFund DAO, and multiple angel investors.
December 12, 2023: TonUP 2.0 was launched, and the IDO event for the platform token $UP began on December 20. The IEO through Bitget Launchpad took place on December 22, marking a new development stage for TonUP.

As a phenomenal Launchpad platform on the TON blockchain, TonUP has received investments from top TON ecosystem funds like TONCoin Fund, Foresight X, Waterdrip Capital, and BitFund DAO.

Unlike other Launchpad platforms, TonUP has strong crisis management capabilities. During the $MC token issuance and subsequent promotional activities through the TonUP platform, Tap Fantasy faced technical issues delaying the game’s launch, causing a significant drop in token prices.

In response, TonUP used the commission earned from the IDO for a buyback and burn, gaining community trust. Most importantly, TonUP is far from its breakout period, with 99.66% of tokens concentrated in project addresses, indicating a strong cash reserve for development and operations, without the need for retail funds for maintenance.

The token price is likely to rise with the further development of the TON blockchain, making it a strong contender in the TON ecosystem.

Telegram Wallet and Tonkeeper

Compared to any other platform, Telegram Wallet has the greatest potential to become the future interface for Web2 and Web3 fund flows. The Wallet operates on the Telegram platform, making it very convenient for general users.

Through its integration with Neocrypto, Wallet provides users in over 100 countries with services to purchase cryptocurrencies using Visa and Mastercard. It also collaborates with platforms like MoonPay, Onramp.money, and AlchemyPay to build efficient P2P market channels.

Additionally, Telegram’s partnership with Tether to establish USDT-TON exchange terms brings higher liquidity to $TON. Before integrating the USDT-TON exchange, TON’s network TVL exceeded $100 million, which doubled within two weeks of the announcement.

Moreover, Telegram’s transfer, withdrawal, merchant fees, and virtual transactions are all free of charge, attracting large fund users.

Tonkeeper is the simplest way to store, send, and receive Toncoin on The Open Network, a powerful new blockchain offering unprecedented transaction speed and throughput, along with a robust programming environment for smart contract applications. Compared to other wallets, Tonkeeper has the following advantages:

End-to-End Security: Unlike Wallet, which operates on the Telegram platform, Tonkeeper stores encryption keys locally on the device, without requiring files, personal information, contact information, or KYC, greatly protecting personal privacy.
Built-in Exchange Functionality: Users can buy Toncoin directly within the Tonkeeper app and exchange it on the decentralized market.

Tonkeeper is an excellent choice for holding large amounts of crypto assets on the TON blockchain.

Notcoin and Catizen

Notcoin is a free and easy-to-use Telegram game that has gained popularity since its launch on January 1, 2024, with over 30 million participants and an average daily activity of 5 million.

Notcoin features a simple and fun game format:

Users can easily earn tokens by clicking on the interface, with appropriate time energy settings to maintain user engagement.
The introduction of NFT vouchers allows users to trade earned Notcoin before the market opens, further stimulating FOMO sentiment.
The game alliance system encourages players’ autonomous promotional activities, forming a positive cycle.

Thanks to the viral spread of the game, the Notcoin community has accumulated a large user base, laying the foundation for its ICO on major exchanges like Binance, OKX, and Bybit. After entering the exchange market, Notcoin’s performance remains strong, with a seven-day price increase of over 400%, aligning with the current meme coin explosion.

Catizen is a cat-themed game on the TON ecosystem, combining metaverse, GameFi, and AI. It introduces a revolutionary play-to-airdrop model, allowing players to earn future airdrops while playing. Backed by the TON official team, Catizen has become a showcase project of TON at Token2049. As of May 30, 2024, Catizen’s $wCATI token mining has ended, but the community remains highly active, with ongoing development plans.

Catizen’s seed round received investments from TON, Web3 Ventures, Mask Network, Y2Z, SecondLive, EMURGO Ventures, Moon Capital, and Initiate Capital.
The Catizen team has signed contracts with 18 popular WeChat mini-games to gradually launch on the Catizen game platform. Each new game release is likely to rekindle interest in the Catizen community, driving future community growth.
Catizen will be the first application in the TON ecosystem to support NOT recharges. In the future, Catizen and Notcoin are expected to form a strong partnership, achieving deep ecosystem integration.

Hamster Kombat: Rise of the Hamster

Hamster Kombat is a mini-game based on Telegram, where players take on the role of an exchange CEO, earning coins by clicking on images of hamsters. In addition, the game features a card mining mechanism, allowing players to devise strategies to increase their fixed points income.

Despite its simplicity, this game has rapidly overtaken the Telegram gaming scene faster than Notcoin. Since its launch in the first quarter, Hamster Kombat’s Twitter followers have surged to 5.1 million in just three months, its Telegram group boasts 25 million members, and its YouTube channel surpassed 10 million subscribers within just 7 days.

In June, according to Hamster Kombat’s official announcement, the number of users exceeded 100 million, with 32 million daily active users and an average of 6.5 million concurrent online users. This makes Hamster Kombat the leading meme coin on the TON chain, and the game aims to establish the hamster as a well-known brand in the Web3 space.

The success of games like Notcoin, Catizen, and the currently trending Hamster Kombat can be attributed to three key factors: innovative and simple game mechanics, a fair mining concept, and the support of major institutions.

These factors have addressed common issues such as rug pulls and project team exits on the ETH chain, attracting a vast user base and fostering viral community growth. Utilizing memes to gain mainstream attention has become a strategic approach for the TON ecosystem. The wealth effect created by Notcoin is likely to extend to other TON ecosystem projects, creating a FOMO atmosphere and paving the way for the development of projects like EVAA, STON.fi, and Tonstakers.

Conclusion

User Base and Resources: With Telegram’s 900 million users, TON has unparalleled user demand and resources compared to other public chain projects.
Web2 to Web3 Interface: The integration of TON and Telegram has the potential to create an interface between Web2 and Web3, reshaping the Web3 landscape.
Technical Advantages: Combining asynchronous contracts and infinite sharding, TON currently outperforms Ethereum and Solana in various aspects. However, its overall circulation and TVL are relatively low, raising questions about its generalizability.
Developer Ecosystem: TON’s unique development architecture attracts top developers, establishing a complete development ecosystem.
Token Distribution and Governance: TON’s fair and effective token distribution mechanism and excellent community governance strategy lay a solid foundation for future development.
Wealth Effect: Whether it’s TON itself or the recent viral hits like Notcoin and Hamster Kombat, the wealth effect is evident, providing significant support for the future growth of the TON ecosystem.

Despite TON’s current market cap of $18.759 billion, making it the ninth-largest cryptocurrency, there is still significant room for growth in its TVL and ecosystem compared to Ethereum, BSC, and Solana.

With continuous positive news, there remains potential for value appreciation. TON’s journey will not stop here, but whether it can ultimately rival Ethereum as a leading public chain remains to be seen.