In September 2023 , Telegram and the TON Foundation officially announced a partnership between the two parties to integrate TON's self-hosted encryption wallet "TON Space" for Telegram users. This is the official official cooperation and interaction between the two after Telegram announced in 2020 that it would abandon the "Telegram Open Network" project it founded due to compliance issues. As a result, relying on the social platform Telegram as a traffic entry point has become TON's core competitiveness.
Web2 traffic, Web3 users, and social media platforms are combined with a high-performance public chain, making the TON ecosystem, which is still in its early stages, attract the attention of investors. This report mainly compiles the early ecological development of TON Blockchain, public chain updates and development, on-chain ecological data, related financing information, etc., and analyzes the data growth, narrative perspective and development trends of the TON ecosystem for reference.
This report was co-written and published by Starbase and Blocktempo, with thanks to TON and TonX Studio for providing content suggestions and support.
1. Project fundamentals
1. Basic overview of the project
1.1 Team information
Steve Yun: Chairman of TON Foundation
Currently, the TON Foundation (formerly the NewTON team) is led by Steve Yun, Chairman of the TON Foundation.
Steve Yun previously worked at Koinvestor as Chief Operating Officer.
Bill Qian: Board Member
In September 2022, Bill Qian, head of M&A and Binance Labs, announced that he would join the TON Foundation as a board member.
Andrew: Board member
Former CEO of vk.com.
John Hyman: Chief Investment Officer of Telegram
John Hyman, Telegram’s former chief investment adviser, was involved in Telegram’s fundraising efforts.
1.2 Relevant funding information
In April 2022, the TON Foundation announced the establishment of a US$250 million ecosystem fund TONcoin Fund. Investors mainly include the venture capital departments of cryptocurrency exchanges Huobi and Kucoin. The fund will be used to fund the financing and incubation of TON-based development projects. , hackathons, educational programs and grants. (In 2023, the TON Accelerator Program will allocate US$25 million to promote ecosystem construction.)
In April 2022, during the same period, the TON Foundation announced that it had received a total of 176 donations of approximately 527 million Toncoins (accounting for approximately 10.54% of the total) from the community.
1.3 Code update
As an open source protocol, there are more than 30 TON code contributors. In the past month, 3 members submitted 28 Commits.
1.4 Product/technical features
(1) Positioning
The Open Network (TON) is an early blockchain-based decentralized computing network designed by the Telegram team and a white paper written by Telegram founder Durove. It aims to become a decentralized computing network that includes the TON blockchain, decentralized storage, and I2P networks. A Web 3.0 network with instant payments and easy-to-use decentralized applications.
TON Blockchain is a tightly coupled multi-blockchain system (can be regarded as a collection of blockchains) with unlimited sharding support and customizable work chain functions.
(2) Core features
In order to achieve higher TPS, the core of TON Blockchain is to support parallel calculation and verification of transactions, as well as asynchronous processing of smart contracts. TON Blockchain has three structural layers: Masterchain (main chain), Workchain (work chain) and Shardchain (shard chain).
- Masterchain : Contains general information about the protocol and current parameter values, verifiers and their equity information, work chain and shard information, and most importantly, a block hash set of recent work chains and shard chains.
- Workchain : As the "main force", Workchain supports a maximum of 232 registered runs, which include transactions and smart contracts. Different work chains can have different "rules", that is, different account address formats, different transaction formats, different smart contract virtual machines, different base currencies, etc. Work chains must comply with basic interoperability standards to facilitate interaction between different work chains. (This mode can be compared to PolkaDot)
- Shardchain : Each Workchain supports 260 shards and the corresponding Shardchain. The shard chain has the same rules and block format as the working chain, but it is only responsible for a subset of accounts, which is the system's built-in sharding method. (Isomorphic chain)
Among them, Workchain and Masterchain share verification nodes. By introducing a main chain for endorsement, TON shortens the transaction confirmation time to a new block, which is 5 seconds.
(3) Comparison of public chains
In November, TON globally broadcast a new high of TPS of 104,715.
1.5 Economic model and Token utility
The initial total amount of TON is 5 billion. From June 2020 to June 2022, miners mined all TON through PoW, accounting for 98.55% of the total supply, and the team holds the remaining 1.45% share. Toncoin was concentrated in the hands of miners in the early days and was slightly less decentralized. The top 100 whale addresses hold 49.51% of the total Toncoin supply.
Currently, TON ecological PoS miners obtain TON rewards through staking, and the operating model can be compared to ETH.
According to CoinMarketCap, TON currently has a total supply (as of November 3) of 5.047 billion, with an inflation rate of 0.6% per year. The current circulating supply is 3.431 billion pieces, with a market value of approximately US$7.09 billion, ranking 11th in market value. In 2023, the TON ecosystem voted to pass a proposal to burn half of the transaction fees to reduce the circulating supply.
Referring further to other data, according to tontech.io, a total of 1,081,391,286.092 tokens were frozen in the freeze list of large miners at the beginning of this year; and according to tonviewer data, the recent Belever Fund lock-up data was 1,317,379,088.44 tokens. Based on the above data, there are currently a total of 2,398,770,374.53 coins that are not in circulation, the current total supply is 5,097,272,074.94 coins, and the current total circulation is approximately 2,698,501,700.41 coins.
(Source: https://tontech.io/stats/#/early-miners ; https://tonviewer.com/Believers.ton )
Toncoin is its native cryptocurrency, a cryptocurrency used directly based on Web2 giant social APP, and can be regarded as the "legal currency" in the Telegram ecosystem. Mainly used:
- Execution of smart contracts and transaction fees, DAPP payment settlement, and cross-chain transaction fees.
- Maintain the blockchain's proof of stake and lend to validators to earn interest.
- Participate in TON on-chain governance.
- Fee payment for other TON network components, such as domain name payment, etc. (We plan to enable payment for TON agents and decentralized storage in the future).
For example, you can currently pay for 50% off value-added services in Telegram through TON; purchase advertising services in Telegram; mobile number/domain value-added services, etc.
Extended reading: Telegram founder: TON wallet will open the door to Web3 for hundreds of millions of users, TON has increased by more than 50% in a single month
2. TON development and plans
2.1 Historical development nodes
- 2018: Telegram founded the Telegram Open Network project and raised approximately US$1.7 billion in ICO
- 2019: Telegram is accused by SEC of illegal fundraising
- 2020: While waiting for the SEC ruling, TON Labs forked and released the "Free TON" version (later renamed Everscale
- May 2020: The Telegram team agreed to pay a fine of US$18.5 million to reach a settlement with the SEC, abandon the Telegram Open Network project and return the funds; during the same period, the developer community took over and continued development by developers called the NewTON community.
- May 2021: TON Foundation established, Telegram Open Network renamed The Open Network
- April 2022: Establishing a US$250 million ecological fund
- June 2022: PoW mining and testnet 2 token distribution completed, most of the token holding information is unknown; during the same period, the TON network has completely transformed into PoS.
- September 2023: The native wallet TON Space will be connected to the Telegram account and can be connected to various TON-based Web3 applications.
2.2 Team development planning plan
TON officially predicts that its development priorities in the fourth quarter of 2023 include:
Among them, in the direction of cross-chain bridges, TON's official cross-chain bridge supports the cross-span of assets between TON, ETH, and BSC, and the official cross-chain bridges of other chains are still under development.
Extended reading: TON HK workshop decryption: How can TON combined with Telegram trigger a new revolution in the DeFi world?
2. TON ecological development status
1. Developer growth status
As of November 2023, the Developer Report counts 6,279 full-time developers on the entire network, and 19,279 monthly active developers. Among them, TON has 28 full-time developers (accounting for 0.0045%) and 124 monthly active developers (accounting for 0.0064%), which is still in a very early stage.
2. Overview of TON ecological data
2.1 Node data
According to TonStat data, there are currently 357 Validators distributed in 25 countries. The current total pledged amount of TON is approximately 460 million. Accounting for 9.11% of the total token supply.
2.2 Fund scale
Pledge data :
According to TonStake data, the total amount pledged on the TON network is approximately US$3.95 million, with an APR of approximately 5.54%. The number of active Validators is 193/326. (That is: a total of 326 validators. The dPoS consensus algorithm will divide the nodes into Round A and Round B, and AB will rotate every 18 hours. Currently, there are 193 people). Long-term TON holders can consider Staking.
TVL :
According to DeFiLlama data, TON’s current TVL is approximately US$9.56 million, temporarily ranking 64th in the overall ranking of public chains. The top three projects are Tonstakers ($12.97 M), bemo ($8.45 M) on the Liquid Staking track, and Megaton Finance ($3.38 M) on the DEX track.
2.3 Users on the chain
According to TonStat data, the number of TON accounts is 3,650,140; the number of active addresses is 856,000.
The number of new addresses on the chain will grow rapidly from September 2022 to January 2023, mainly due to the short-term peak of transactions on the TON chain (reaching the current high of US$2.6 on September 20); rapid growth will occur in May 2023 , the reason may be due to the liquidity incentives from the foundation and the launch of the official cross-chain bridge. During the same period, the popularity of Telegram bot increased, which also drove the market's attention to the TON ecosystem itself.
In the past year, the number of active addresses in the TON ecosystem has grown steadily, with an accelerated growth trend in early 2023. The number of TON accounts has also grown to more than 3.65 million. Compared with developers, users are entering more quickly. The ecology.
3. Mainstream tracks, representative samples and financing status
The TON ecosystem is mainly constructed based on the application store model. The ton.app data divides the categories in the TON ecosystem into 19 categories, including wallets, games, NFTs, staking, cross-chain bridges, social networking, gambling and other fields. The proportions of each item are as follows:
According to incomplete statistics, there are currently 551 TON ecological projects. The top five categories with the largest number are: Jettons (Jetton is the TON network token standard), NFT collections, Telegram channels, TON-based utility tools, Exchanges CEX, Although the statistics are large, they actually include many telegram groups. Overall, the ecology is still in a very early stage.
Extended reading: An overview of TON blockchain ecological applications, 551 DApps covering 16 tracks
Select some representative cases and valuation situations for reference:
Excluding more general classifications, the current TON ecosystem’s tracks worthy of attention include:
DeFi & LSD
At present, DeFi products on TON have not yet formed a leading effect, and the LSD protocol and related products are still blue ocean.
Game & Gambling
The thinking of this track is analogous to WeChat mini-program games, which are characterized by being backed by a large traffic entrance, simple to operate, easy to use, short game cycle, and with a krypton gold effect. Most of the early game development in the TON ecosystem was laying out this type of model.
Anonymity & Privacy
From the Telegram resource trading platform fragment, we can see the user demand for anonymity & privacy-related services, including services such as Usernames, anonymous account subscription and secondary transaction functions. For example, Telegram users use the Fragment platform to purchase anonymous numbers through TON, register an account without a SIM card, and receive verification codes, which greatly protects the user's privacy. Currently, the price of such anonymous accounts in the secondary market is growing rapidly.
wallet
After the official custodial wallet and the built-in non-custodial wallet TON Space come out, previous wallets will face greater challenges. For example, Tonkeeper is an open source non-custodial wallet based on TON. This type of wallet supports iOS and Androids mobile systems. At present, most TON applications support wallet scanning to log in, and have good ecological compatibility.
Cross-chain bridge
Currently, TON has officially built a cross-chain bridge for swaps between TON, ETH, and BSC to support asset cross-over. Cross-chain fees are slightly higher, and official cross-chain bridges for other chains are still under development. Third-party cross-chain bridges are being connected one after another. Although the current number is still small, the Telegram bot tool is superimposed in the ecosystem to solve users' cross-chain needs in a more convenient way.
Currently, third-party cross-chain bridges include Orbit Bridge, Wallet Bridge, Tontake Bridge, and XP.NETWORK:
Regarding the cross-chain ecology of TON ecology, the official is not active in cross-chain and EVM. As early as the beginning of the design, TON did not consider too much compatibility or cross-chain factors. It aimed to develop its own ecology and start from the traffic in the ecology. From this perspective, Telegram and TON themselves have a greater say; at the same time, the cross-chain needs of users in the TON ecosystem can be met through Telegram bots, channels, official and third-party cross-chain bridges. Especially the rise of bots allows users to conduct transactions and cross-chains in a fast, low-threshold, and satisfying way that satisfies users' usage habits. Cross-chain is not a very difficult problem.
Currently, third-party cross-chain bridges are gradually connecting TON. Although the number is currently small, the number of projects on the cross-chain track itself is sufficient. For most cross-chain projects, it is an additional phenomenon. From a traffic perspective, the platform that TON + Telegram is suitable for benchmarking should be more similar to Discord or Weibo. The demand for entry into other ecosystems is far greater than the demand for cross-chain exit from TON itself.
It can be seen that the TON ecosystem has been influenced and inspired by Telegram Bot. Bot services have widely penetrated into many fields such as transactions, airdrops, data, communities, cross-chains, etc., and directly connect users in existing application scenarios, to some extent. It provides a solution to the "mass adoption" issue that has been a hot topic in the Crypto field. It is expected that the Bots solution will continue to expand in the TON ecosystem and be integrated with other narratives and applications to provide users with a better Web3 experience.
In addition, compared with TG Bot's "pure text command interaction" model, the next generation of mainstream interaction forms will also include TWA (Telegram Web Apps). In the future, Telegram will be similar to WeChat, penetrating into the platform, and in the form of WeChat applets. In users and ecology.
4. Official ecological support
Currently, the TON network ecosystem is led by the TON Foundation.
- In April 2022, the TON Foundation established the US$250 million ecological fund TONcoin Fund, which includes investments from Huobi, KuCoin, MEXC, DWF, etc. According to public information, the fund is used to build on TON and will focus investment on key projects in various fields. Investments range from US$50,000 to US$250,000 per project.
- According to official public information, a total of 31 projects will be funded in 2022, 10 projects will be funded in the second quarter of 2023, and 5 projects will be funded in the third quarter, mainly infrastructure.
- In 2023, TON launched the DeFi Liquidity Incentive Plan and held the Hack-a-TON hackathon, aiming to attract the world's top developers into the TON ecosystem.
- In May 2023, TONcoin Fund launched a universal accelerator program and will allocate US$25 million from the ecological fund TONcoin Fund to promote ecological construction.
3. Where is the entry point for TON ecology?
1. Market size expectations
The TON ecosystem is backed by Telegram users. Although currently "deployed on Telegram" and "deployed on TON" are not the same concept, it does not rule out subsequent ecological cooperation and traffic tilt between the two.
In January 2023, the Telegram data report compiled and released by the data and consulting company statista is the most complete and reliable Telegram data in the market (data as of January 2023). Please also refer to Telegram’s official public information:
Telegram has 800 million monthly active users, more than 1.3 billion registered users, and more than 2.5 million new users register for Telegram every day. This data is 1.4 times that of Twitter (556 million), 61% of WeChat (1.309 billion), 86% of Facebook Messenger (931 million), and exceeds Douyin (715 million).
Referring to the average number of monthly active users of Telegram over the years, the growth rate of Telegram users is very stable, growing at an annual rate of approximately 15%-30%. Based on this estimate, Telegram’s active users will reach 960 million, 1.15 billion, and 1.38 billion in the next three years. people.
The TON Foundation stated that it hopes to bring 30% of Telegram users to TON. According to rough and conservative estimates, the user base expected to be introduced into the TON ecosystem is estimated to be 288 million, 345 million, and 414 million. Currently, the total number of accounts on the TON chain is only 3.65 million, and there is still huge room for development.
At the same time, in addition to its social attributes, Telegram's "e-commerce platform" attribute has become more prominent in recent years. Citing report data, in 2020, the sales of China's exported goods through Telegram reached US$12 million, and in 2021, 16% of Russia's C2C buyers shop on Telegram. Therefore, TON's ecological valuation is more suitable to be compared to the scale and market value of platforms such as Meta and WeChat.
After the ecosystem stabilizes, different service categories such as app stores, advertising systems, privacy services, membership services, etc. can be split and valued. Referring to the report data, the number of Telegram paying users (as of August 2022) has reached 257,000.
2. TON Ecology: Where is the entry point?
Unlike other public chains, TON starts from the Web2 scenario and has a very low C-side entry barrier. From the fact that TON's official attitude towards EVM compatibility is relatively unpositive, we can see that TON has the potential to develop on its own relying on the Web2 scenario, and there is no need to rush to copy the development path of the native public chain in the encryption field. Therefore, the idea of observing the TON ecosystem will mainly focus on the acquisition and conversion of traffic.
Refer to the development process of WeChat ecology:
The entire WeChat ecosystem is based on social networking, providing information (social networking), and then providing services (payment). The services shape the scene, such as mini programs, live broadcasts, etc., and ultimately allow information, traffic, and services to be deposited within the ecosystem. Among them, WeChat payment is an important development node, and it will subsequently open up various online and offline payment scenarios, eventually forming a closed business loop.
If we compare Telegram and TON to the WeChat ecosystem, benefiting from the user base, the best entry points in the TON ecosystem will revolve around traffic, including payments, mini-programs, content platforms, etc. As an application layer project, it will pay more attention to the acquisition and conversion of traffic, and key factors in the original encryption field, such as institutional endorsement and team brand, may be weakened. At the same time, compared to other Web2 traffic platforms, Telegram and TON ecosystems are easier to attract and retain Web3 users.
Relatively speaking, for the combination of Telegram and TON ecology, its competing products are more likely to come from the entry of Crypto by platforms such as Discord. (Discord also has the rise of the Bot track and a large user base, but DC has not yet fully devoted its efforts to Crypto due to factors such as user safety and supervision.)
Refer again to the Telegram user portrait in the report:
- In terms of user behavior, in 2022, each user will spend an average of 4 hours on Telegram per month. 59.5% of users who use Telegram also use Twitter.
- In terms of content, 85% of users follow news, 62% of entertainment channels, 58% of educational channels, 13% of pornographic content, and 4% of black/grey users (Dark Web related channels).
At the same time, consider the rise of the Telegram bot track and other phenomena. It can be predicted that the TON ecosystem has the potential to become the original third, fourth or even last-tier trading platform in the crypto industry, attracting and retaining crypto users. In addition to the form of Bots, the mainstream form of subsequent Apps may be TWA (Telegram Web Apps), similar to WeChat mini programs.
At present, the TON ecosystem is still in its infancy, and there are no circle-breaking projects yet. Each track and project is still in the stage of occupying ecological space or competing for market share.
The demand for financial attributes of DeFi (DEX, lending) in the TON ecosystem may be relatively weak. Similar to WeChat, its users' trading habits may be small amounts and high frequency. In comparison, the TON ecosystem is naturally more suitable for payment, Bot, Game, Social and other entrances, and is more suitable for the narrative logic that breaks out on the application side. Therefore, due to the urgent need to obtain traffic, other public chains may take the initiative to cross-chain and connect with TON in the future.
Extended reading: How will the TON ecosystem explode? Analyzing the “payment field” may be the biggest advantage
3. Risk points
(1) Telegram’s official support and endorsement
Telegram is not limited to the TON ecosystem and allows for more convenient integration of various chains and protocols, such as the transaction bot of the EVM ecosystem. At present, project deployment on Telegram and deployment on TON are still different concepts. It is necessary to consider the close cooperation between the two and the implementation of traffic tilt, as well as the openness of the TON ecosystem itself.
(2) TON’s compliance process
TON has sufficient users and traffic, but it still needs to take a compliance path to continue its development. TON moved its headquarters to Zug, Switzerland, which is widely seen as related to the generally positive attitude of the Swiss authorities towards the cryptocurrency industry.
(3) Degree of centralization
In the early days, TON was questioned about its overly centralized token distribution. Later, it was frozen, and it was still considered to be centralized.
References:
TON White Paper: https://ton.org/whitepaper.pdf
Github TON Blockchain: https://github.com/ton-blockchain/ton
Discord Revenue and Usage Statistics (2023): https://www.businessofapps.com/data/discord-statistics/
Telegram – statistics & facts: https://www.statista.com/topics/9640/telegram/#topicOverview
