Part 1 of my In-Depth Series - TONCOIN Can Telegram Leverage Its 550M+ Users to Push $TON to New Heights?
The purpose of this in-depth research series is to analyze some popular projects and rank them according to a set framework.
As I complete each project, I will update and track the score on my Google Sheet.
Let's take a deep dive.....by December 20, 2022: $TON
- Price = $2.25
- Market cap = $3.3 billion - Rank 22
- Proof of stake
- All-time high = $5.29 (-58%)
- All-time low = $0.52 (+333 %)
The Open Network (TON) is a layer 1 blockchain solution developed by the Telegram messenger team in 2018. TON coin is the main cryptocurrency of this chain and is mainly used for transaction fees and as a deposit for validators to ensure the security of the network.
TON is unique in that it is one of the only cryptocurrencies that operates as both PoW & PoS.
In May 2020, the project all but died as the team ceased development and agreed to an $18.5 million settlement with SEC regulators.
To keep the technology alive, the Telegram team put all available coins in the network into a smart contract where anyone can mine under equal conditions.
The initial issuance of the $TON coin, almost by accident, is now called IPoW - Initial Proof of Work.
Now, the chain has fully transitioned to proof-of-stake, is truly alive, and is one of the best-performing coins in the 2022 bear market.
1. Income
There isn’t a lot of data available about the revenue generated by TON, but I guess it won’t be long before we see it on the token terminal.
Similar to other Layer 1s, revenue and demand are primarily driven by transaction fees on the blockchain.
The current demand for TON comes from:
- transaction fee
- pay the fee
- Telegram/TON domain name
- Whale Club NFTs
Without a ton of data yet, I'd have to rate revenue a 6.
2. Funding
There is not a lot of information about the funding size and composition of the TON Foundation.
However, they have about $340 million in TON coins and TAV funds available in the form of grants and IDOs for emerging TON projects to apply for.
The initial decentralized exchange offering (IDO) is realized through Tonstarter - the first TON-native launch platform for tokens of retail venture capital promising projects.
Overall, I would give it a 6 for the money.
3. Token economy
The initial supply of $TON is 5 billion coins. The supply is not capped and will expand at a rate of approximately 0.6% per year. These created tokens are used to reward validators for keeping the network secure. Currently, you can earn around 8.2% p.a. on staking.
If a validator misbehaves, some or all of their stake can be chopped off and the equivalent of TON burned. In turn, reducing the supply of TON in circulation.
Coingecko Supply Statistics (19/12/22)
- Circulating Supply= 1.47 billion
- Total supply = 5.06 billion
- Market cap = $4.1 billion
- FDV = $14.07 billion
- Market Cap / FDV = 0.29
8 points for the token economy. Relatively low inflation, the only concern is selling pressure from the TON foundation/whales.
4. Lock funds
The creation and initial distribution of TON is quite unique, similar to Bitcoin in some ways.
In June 2020, all Toncoin tokens (98.55% of the total supply) will be available for mining. These tokens are then placed in special smart contracts that allow anyone to participate in mining. By June 28, 2022, the last Ton coin will be mined, marking the successful end of the initial issuance of TON.
This means that all tokens are distributed among tens of thousands of miners
The TON project has chosen not to hold an ICO, IEO, or any other type of token sale.
There is no vesting schedule to worry about. However, it is important to note that early miners (Whales) own a significant portion of the TON coins.
Overall, locked funds are worth 9 points.
5. Use Cases
There are many similar POS first layers competing with TON for market share.
The X-factor of TON is its adoption potential through the Telegram messenger.
Currently, there are over 550 million active Telegram users, and this number is growing rapidly.
Impressively, the TON blockchain has processed nearly 100 million transactions and has more than 1.7 million unique accounts - a 211% increase in the past 6 months.
Now you can seamlessly trade Tons between telegram users, which will further boost adoption.
Recently TON launched a DNS auction where you can bid for popular Telegram domain names.
Currently, the advisor price for the top auction is 189,000 TON ($500,000).
The Whale Club NFT is becoming more and more popular and has a base price of 389TON.
They are a utility NFT that grants you membership in the Whale Club with the following features.
Toncoin also just got listed on Defillama which is huge. As you can see, some impressive increases in TVL since listing.
The first Dex also just launched on the TON blockchain
The sky is the limit if Toncoin can capitalize on their adoption and growth via telegram messenger.
Give them a 9 for their use case.
6. Roadmap
2022 is a big year for TON, with the introduction of TON Defi, Nominators, Developer Programs, DNS and TON Payments.
The goal in 2023 is for Bitcoin and EVM to Cross-chain. It would be nice to have more information about the long term plan/vision.
There are 6 copies of the roadmap.
7. Team/funding
There are several major organizations driving development - the TON Foundation and the TON Association. TON prides itself on being a decentralized, open-source community of experts, so it's hard to find any clear organizational structure.
However, I have listed below key individuals who appear to be actively involved in the project.
-Anatoliy Makosov & Kirill Emelyanenko- Founding developers
Steve Yun and Andrew Rogozov - founding members of the TON Foundation
-Tal Kol & Oleg Andreev - TON Ambassadors
Manuel Stotz & Bill Qian - Board Members of TON Foundation
There is also a very committed community of developers and projects building on top of TON. This includes the TON Whale Club, whose team roster is below.
As I mentioned before, there is a community grant for emerging projects, with a current $340 million fund. This is a powerful move to encourage construction on the industrial chain.
Overall, an 8 for both the team and the money.
8. Summary
Overall, TON is a very promising project with some huge opportunities for adoption by utilizing the telegram messenger. It has been one of the strongest performing coins in a rather tough 2022.
While I don't own any TON bags yet, it's definitely on my watch list and I'll be on the lookout for some better entry points in 2023.
Overall, the projects received a weighted average score of 7.6 in my assessment. What do you think of my score?
