Original title: The State of TON DeFi Q1 2024 Original author: The Open Platform Original translation: Ismay, BlockBeats

Memecoin hype was a central theme in the TON DeFi space and the overall crypto landscape in Q1 2024, at least in part responsible for the surge in on-chain activity and DeFi metrics:

One of the key highlights of the quarter was a 7x increase in TVL, driven primarily by increased DEX activity and the market dominance of liquid staking protocol Tonstakers.

Another key theme was the launch of the Open League. The program rewards users who interact with the TON project and features a Toncoin pool competition that rewards the best performing TON-based project each season. A key element of the program is the farming pool that increases APY. The introduction of the farming pool, along with the surge in memecoin trading volume, has made DEX the best performing DeFi space on TON based on TVL:

In the following sections, we will explore the patterns behind the surging performance of TON-based DEXs in more detail.

DEX: Open League meets Memecoin hype

Tokens on the TON blockchain, also known as jettons, saw a sharp rise in popularity in the last quarter of 2023, which has continued to this day. Memecoin has been largely responsible for the increase in trading activity.

Chronologically, this rally was preceded by the launch of Notcoin, a previously untradable memecoin that anyone could “mine” by clicking a button in the Notcoin mini-app on Telegram. In just a few months after its launch, Notcoin attracted 35 million active users. Notcoin, now listed on multiple DEXs and CEXs, inspired various meme jettons with similar mechanisms. The surge in jettons was one of the main drivers of the surge in trading volume on TON-based DEXs.

The hype around memecoin has attracted a lot of attention to DeDust and STON.fi, two DEXs that have listed a large share of these tokens. According to Tonalytica, the total trading volume on DEXs on TON reached $4.2 million, a 90-day high. The second quarter set another all-time high, now exceeding $60 million:

Below is a screenshot from our internal analytics tool showing volume on both DEXs. The pattern matches up pretty well with the one on the Tonalytica chart:

STON.fi and DeDust are the main venues for enhanced liquidity pools, an incentive initiative of the Open League. This has led to a more than 9x increase in TVL on TON, with both DEXs contributing significantly during the first three seasons of the show. Season 3 has already begun, and readers can check out the available enhanced pools on STON.fi and DeDust, and access the Open League Pools bot.

STON.fi ranked first in the DeFi competition held during the Open Alliance pilot season, followed by DeDust. The ranking is based on the change in TVL and protocol fees earned during the pilot season. The final ranking can be viewed here.

One of the themes of the first quarter of 2024 is the launch of Telegram Mini Apps by two major DEXs. DeDust and STON.fi now have their own mini apps, which will make the trading experience more diverse and allow users to execute trades directly in Telegram. This may be particularly convenient for traders who use Telegram-based token research tools and news channels.

Additionally, Storm Trade (currently the main derivatives exchange on TON) now allows traders to use Toncoin as collateral for trading futures. This update eliminates the need to convert TON to jUSDT to place collateral, simplifies the user onboarding process, and assigns additional utility to Toncoin in the ecosystem. Additionally, Storm Trade completed its largest ever bounty program as part of the Open League, with a prize pool of approximately $130,000. The bounties will be distributed to the traders with the best volume, P&L ranking, and liquidity performance in the specified trading pairs.

Liquid Stake pushes TON into the top 20 chains by TVL

Liquid Staking remains the dominant sector for TON by TVL. According to DefiLlama, as of this report, TON ranks 17th by TVL when considering both Stake and Liquid Stake value.

Tonstakers won the liquidity staking competition in the pilot season of The Open League, followed by bemo and the new liquid staking protocol Stakee, and maintained its lead in TVL market dominance. Similar to the DeFi competition, rankings are based on changes in TVL; another metric used is the number of new users joining the protocol during the corresponding period.

Stakee (Stakee Bot) is a new liquid staking protocol on TON. Stakee combines simplicity, reliability, and high APY to attract Toncoin holders who seek to increase their yield with minimal fees. The platform ensures secure and transparent transactions by running official smart contracts developed by the TON Foundation.

Additionally, TON Whales launched Whale Liquid, a new liquid staking pool. The protocol allows Toncoin holders to earn wsTON (which can be exchanged on DeDust) as well as lending protocols on TON. The project is currently in beta with a total stake of 848K Toncoin (over $5M).

Lending: EVAA protocol goes live on TON

The Evaa protocol is live on the TON mainnet. As of this report, the total supply of Evaa is $26.1 million and the total borrowing amount is $12.03 million.

EVAA Protocol hosted a Supply & Lending event as part of the Open Alliance. The event provided users with a unique opportunity to lend or borrow TON, stTON, tsTON, jUSDC and jUSDT tokens through EvaaAppBot or app.evaa.finance. Participants received interest rewards from weekly airdrops, supply and lending events, and EVAA XP points, which can be redeemed for EVAA DAO tokens in the future.

While the campaign has officially ended, the rewards pool with an attractive APY is still available in the app:

Similarly, DAOLama held a farm season event and launched Reward Points (RP), an internal token designed to incentivize users through in-app activities. Every loan issued earns RP, which can be redeemed for $LLAMA. The promotion period ended on March 30, and users can now trade tokens on STON.fi and DeDust.

RedStone is the first Oracle solution on TON

Oracles are an essential component of blockchain technology because they act as a bridge between the blockchain and the outside world. They provide a reliable way to input external data, such as token or stock prices, into the blockchain. This functionality is essential to enable smart contracts (self-executing contracts whose terms are written directly into the code) to interact and react to external events.

RedStone becomes the first available oracle on TON, marking an important milestone in the data integrity of TON-based DeFi.

RedStone emphasizes that the asynchronous and fully decentralized nature of TON requires a significant shift in the usual integration approach, involving more complex inter-contract messaging rather than direct contract interactions common in other blockchains. Looking ahead, RedStone aims to support TON's DeFi ecosystem with a new relay system for consistent price updates, smart contract templates for easier integration, and advanced data sources to meet the growing needs of TON-based DeFi. Learn more about the integration here.

Future Outlook

Jettons on the TON blockchain are carving out a unique niche, representing multiple digital assets that go beyond traditional utility. While some of these Jettons may not yet have clearly defined real-world applications, they still have an important place in the broader ecosystem.

The surge in interest in these diverse assets could be the start of a larger process: increasing demand for DeFi infrastructure to meet the capital efficiency requirements of token holders. We can already see evidence of this through the success of incentive campaigns as part of public leagues.