Project Name: Toncoin

Project Type: L1

Code Name: $TON

Cryptocurrency Ranking: 10

Market Cap: $22.5 billion

Fully Diluted Valuation (FDV): $33.2 billion

Circulating Supply: 3.47 billion (68%)

Total Supply: 5.11 billion

Maximum Supply: Unlimited

Preface

Telegram was founded in Russia in 2013 by Nikolai and Pavel Durov. Today, it is the world's third most downloaded instant messaging application, the eighth most popular social network, and one of the five instant messaging applications with 800 million active users per month. Its CEO Pavel Durov is one of the richest social media billionaires, with a net worth exceeding $15 billion.

Source: Statista

TON, also known as The Open Network, is an L1 blockchain developed by the Telegram team. They began developing this project between 2017 and 2018 with the aim of meeting the needs of hundreds of millions of Telegram users. Despite facing some legal challenges from the U.S. Securities and Exchange Commission (SEC) in 2020, the TON Foundation took over in 2022, bringing a fresh start to the project. Thanks to financial investments from entities like DWF Labs and the project's strategic vision, it quickly rose to the top ten of cryptocurrencies.

Source: TON roadmap

If you follow the crypto world, you may have noticed that crypto enthusiasts spend a lot of time on Telegram. With the rapid growth of $TON's market cap, more users seem to be moving to the TON network, similar to how Coinbase users have started moving to Base, sparking a "Base season."

The Telegram team seems to be preparing to onboard more people to TON, potentially initiating a "TON season." A glimpse of this strategy appeared in January last year when Telegram integrated TON into its app, introducing cryptocurrency payments for content creators. This made it possible to develop and use apps directly within Telegram, creating a seamless experience for its users.

In this article, we will delve into the TON ecosystem, seeking to understand its core functionalities and identify potential opportunities.

TON Network

TON operates through a unique combination of architectural elements and consensus mechanisms to ensure fast, scalable, and secure transaction processing.

Currently, services provided within the TON ecosystem include:

• TON Wallets: Digital wallets such as Tonkeeper (non-custodial) and @wallet (custodial) with DApp usage and staking functionalities.
• TON Storage: Offers private encrypted blockchain storage similar to Dropbox but more secure.
• TON Sites: Create decentralized websites on the TON network, accessible through TON wallets and browsers within the network ecosystem.
• TON Proxy: Provides a channel to access the TON network, ensuring censorship resistance and smooth usage of decentralized applications.
• Smart Contracts: Swift transaction processing on TON through the TON Virtual Machine.
• TON DNS: Simplifies TON network navigation by converting complex addresses into user-friendly names.
• Ton Bridge: Facilitates easy transfer of Toncoin between major blockchains such as Ethereum and Binance Smart Chain.

Future Outlook

On October 31st, TON set a new record for the world's fastest blockchain, which was showcased in a live stream. The milestone video can be viewed on YouTube. This achievement enables the team to explore new opportunities based on the potential of the chain.

The TON team frequently discusses the concept of a SuperApp, aiming to integrate various services such as instant messaging, social networks, DeFi, and e-commerce, all supported by TON's blockchain technology. Its vision is to transform it into the gateway of Web3, potentially attracting hundreds of millions of users and facilitating billions of transactions within a user-friendly and seamless framework on Telegram, leveraging its established user base.

Additionally, TON recently received an $8 million investment from Mirana Ventures, a web3-focused investment firm, to develop this ambitious vision.

The team also emphasizes GameFi as a potential use case, highlighting how the gaming industry can benefit from TON to develop in-game economies. Last year, the TON Foundation announced that Animoca Brands, a leader in digital property rights in gaming and the metaverse, became one of the largest validators of the Open Network blockchain.

TON also seems well-suited to become a robust payment system, providing fast and cost-effective global financial transaction capabilities for individuals and businesses.

In January 2022, TON had 200,000 active monthly wallets. A year later, this number soared to over 700,000. Currently, it is approaching 1.7 million, indicating an increase in the use of Toncoin wallets and hinting at the potential for widespread adoption to become a reality.

Source: Tonstat

Market Opportunities

With a market cap of $23 billion, TON positions itself as a significant Layer 1 blockchain with a strong user base. This potential stems from Telegram's unique position as a global communication app with millions of users already involved in the cryptocurrency space.

According to DeFiLlama report, the total value locked in the chain is $140 million. Compared to other Layer 1 or Layer 2 blockchains such as Sui with $658 million, Avalanche with $1.14 billion, or Base with $1.4 billion, there is evidently significant growth potential.

Source: DeFiLlama

If TON's breakout is achieved, early adopters and followers of the ecosystem stand to benefit greatly from its expansion. Considering the potential shift towards this ecosystem in the future, paying attention to and participating in the TON ecosystem could be a strategic move.

Exploring the TON ecosystem reveals a diverse range of projects and tokens with growth and development potential. In the meme coin space, these are typically indicators of community interest and social momentum, and the scene seems to still be in its early stages. Outstanding named coins with strong communities or significant social growth have not yet emerged. However, some tokens like $TEPE showed some activity last week, with a 100% increase in value. Other meme coins, such as TON FISH, TON INU, and DogWifHood, while lacking uniqueness, indicate the budding nature of the TON meme coin sector.

The DeFi space within TON hosts two major decentralized exchanges, which could be crucial for the liquidity and growth of the ecosystem. $STON is the leading DEX with a total value locked of $80 million, and DeDust is the second-largest DEX with a TVL of $49 million, representing the infrastructure of DeFi activity on TON. If Telegram aims to foster a thriving DeFi ecosystem, the success of these platforms could be crucial as they would directly benefit from any liquidity enhancement initiatives.

In the GameFi space, TON hosts projects such as PunkCity and Petcoin. PunkCity stands out with its GameFi ecosystem driven by a Telegram chatbot and integrated NFTs, while Petcoin has launched a GameFi project called Tongochi inspired by Tamagotchi.

Currently, some of the most popular tokens on the TON chain include:

Source: CoinMarketCap

The overall narrative of TON's market opportunity lies in the potential growth of its ecosystem, driven by Telegram's massive user base and strategic initiatives to integrate cryptocurrency more deeply into its platform. While DeFi and GameFi projects on TON are still in their early stages, and the meme coin scene has not matured, the signs of this growing ecosystem are worth paying attention to.

Competitors

Currently, there is significant competition among Layer 1 blockchains in the cryptocurrency world. While some early competitors of TON such as Polkadot, Tezos, NXT, and EOS seem to be losing momentum, new players like Aptos, Sui, Solana, Avalanche, and Cosmos have emerged in the past few years. Despite TON's successful entry into the top ten cryptocurrency rankings, maintaining a large market share is not an easy task.

Source: Coingecko

Several key advantages of TON:

• Fifth-generation blockchain: TON is evolving towards a sharded proof-of-stake multi-chain system that supports custom workchains. It can almost instantly forward messages between shards and keep everything in sync within its network.
• Native sharding support: Built for true scalability, TON can support a wide range of applications aimed at handling any project that can run on a blockchain.
• Comprehensive ecosystem: TON offers a range of services, including P2P networking, storage, and other services, to build a complete infrastructure, enhancing its usability and scalability.
• Flexibility for multi-purpose applications: TON's design is flexible enough to support a wide and specific range of needs, from large private blockchain projects to general decentralized applications.

Token Economics

Toncoin ($TON), the native cryptocurrency of the TON blockchain, supports transactions and applications such as gaming and collectibles. Its token economics began in November 2019, with the minting of 5 billion coins. Regulatory issues in May 2020 paused development, shifting focus to proof of work. By May 2021, TON transitioned to the mainnet, continuing to distribute coins through proof of work. In June 2022, TON upgraded to a proof-of-stake network, enhancing security and stability, highlighting over 12 million accounts, a 0.6% annual inflation rate, and significant validator participation.

Mining started in June 2020 and ended in June 2022, allowing public participation and marking the end of the initial distribution. After mining, TON launched the Infinity TON Mining Pool to continue participation. As a PoS system, TON's operation now involves validators and nominators, promoting network growth through Toncoin rewards.

• Market Cap: $22.73 billion.
• Fully Diluted Valuation (FDV): $34.13 billion.
• Circulating Supply: 3.47 billion (67.98% of total)
• Total Supply: 5.11 billion
• Max Supply: Infinite.

Bullish Factors

• The integration of TON with Telegram provides a huge potential user base for adoption, creating a mature environment for user growth and dApp development.
• TON's architecture, including its advanced consensus mechanism and scalability solutions such as sharding, positions it as a leading technological player in the blockchain space, capable of processing transactions quickly and efficiently.
• The TON ecosystem is rapidly expanding, encompassing various services such as TON Storage, TON Web, and DeFi applications.
• The project has received significant financial support from major entities such as DWF Labs, indicating strong investor confidence. These investments support the development of TON's infrastructure and applications, driving its growth and innovation.

Bearish Factors

• TON's historical regulatory challenges with the SEC may pose ongoing risks that could impact its operations and future development. Additionally, TON's close ties to Telegram mean that any legal, public relations, or economic issues faced by Telegram could have ripple effects on TON. This connection could affect investor confidence, user adoption rates, and the overall perception of TON in the market.
• Operating in a competitive market alongside heavyweight projects like Ethereum and Aptos, as well as emerging projects, TON needs to continuously innovate to maintain relevance and attract users. Additionally, due to TON's unique architecture, the TON Virtual Machine is incompatible with the Ethereum Virtual Machine. This means that TON cannot directly leverage Ethereum's extensive development tools and decentralized application ecosystem.
• While the prospect of converting communication app users into active blockchain participants through integration with Telegram is promising, there is still uncertainty. Slow ecosystem development could weaken its potential.
• If the inflation mechanism is not properly calibrated, it could lead to an oversupply of tokens, reducing the value of individual tokens and potentially decreasing investor interest.

Closing Remarks

Emerging from the popular communication app Telegram, TON has quickly made a name for itself among top Layer 1 blockchains. Despite rapidly becoming one of the top ten cryptocurrencies, the future path for TON is still filled with challenges. The blockchain world is highly competitive, with newcomers like Aptos, Sui, Solana, Avalanche, and Cosmos shaking up the landscape. These new and established players mean that TON must work hard to maintain a strong market presence.

Looking ahead, TON's connection with Telegram presents a tremendous opportunity for its growth. With the benefit of Telegram's massive user base, TON is in a favorable position to accelerate adoption and encourage the creation of new decentralized applications.

As TON evolves in the blockchain world, its future success will depend on keeping up with innovation, attracting developer participation, and maximizing its unique connection with Telegram. There are many possibilities ahead, and TON's goal of changing the way blockchain is used could make it a key player in driving more people to use blockchain technology.

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