After Trump's victory, Bitcoin broke through 76,000, and the bullish trend is strong. However, compared to the price fluctuations of Bitcoin, what is most beneficial for the growth of the entire industry ecosystem is the altcoin season, and the industry is looking forward to richer growth. In the short term, we can see that tokens in various sectors are already closely following the market to reignite their popularity. Among these sectors, the "TON ecosystem" continues to attract close attention from investors.
Since the Durov Paris incident two months ago, the TON ecosystem has fallen into a crisis, or rather, entered a new adjustment phase. Even though various meme projects and mini-games within the ecosystem are still continuously attracting new users and updating activity information, market-sensitive individuals seem to have sensed the "limited faith" in the TON ecosystem.
For example, from market feedback, SOL has quickly rebounded and surpassed 200 following BTC, but the increase in TON is far less than this.
So, what is most favorable for TON in this industry-focused election event? We can find some answers in Trump's ten commitments to cryptocurrency. Among these commitments, we see that not only are there measures for Bitcoin, but more initiatives will represent the future "unblocking" of the dollar economy towards the cryptocurrency industry. For Telegram and TON, which have long been shrouded in fog, this will be a powerful remedy.
Under the expectation of a smooth background, if the market continues to rise, what specific development expectations can we hold for TON?
Favorable Development Background for TON
Before Durov's news, the growth of the TON ecosystem was strong. Led by the several-fold increase in TON tokens, most ecosystem DeFi tokens saw increases of around ten times. In addition to the token price increases, the attention was even more remarkable. First, before Notcoin went live, various CEXs scrambled to launch it to attract new TON ecosystem users. Then, DOGS once again stirred the enthusiasm of all Telegram users, representing a huge market base. As long as the market rebounds, the tokens in the TON ecosystem will inevitably follow suit.
However, in the past two months of sluggishness, after the decline of TON tokens, the TVL, DEX trading volume, and other metrics within the ecosystem have also decreased with the waning popularity, which is currently the most thought-provoking data.
But when we understand TON from the perspective of long-term growth of public chains, we may find that the current data performance is a natural occurrence in the growth process of public chains. This first allows us not to worry about the future competition of public chains losing TON's position, but rather to continue viewing TON with a long-term perspective.
Just like the trend of DEX development, the entire industry's user education is laying the groundwork for high-speed public chains like TON.
On October 28, according to SolanaFloor, the DEX trading volume on Solana reached $15.78 billion within the week, surpassing Ethereum's $8.87 billion by 77.91%, setting a record for the largest lead over Ethereum. Consequently, Solana's share of the total DEX trading volume reached 35%, a historic high.
At the same time, according to data from The Block and DefiLlama, the spot trading volume of DEX relative to CEX reached 14.12% in October, a new high since May 2023.
This trend continuously confirms one trend: as high-speed chains become popular, the boundary between user trading behavior on DEX and CEX is becoming increasingly blurred.
Under the multiple trends of mature on-chain liquidity supply, on-chain token market value management, and the prevalence of small and medium-sized projects, combined with the increasingly blurred trading scenarios for user transactions, we will ultimately see user behavior transform into: more trading and interaction behaviors returning to on-chain native trading exchanges, or trading behaviors primarily based on DEX and Web3-style interactions.
Compared to the current hot spots of various chains, TON itself is an ecosystem where the boundaries between DEX and CEX are even more blurred. Its Web2 interaction method first blurs the categories of trading, while the TON wallet on Telegram further lowers the threshold for crossing from Web3 native trading to Web2, meaning simpler and more convenient on-chain native trading, or it may even surpass the current trading convenience achieved on Solana.
We can imagine that in the Solana environment, excellent DEX can achieve a surge in trading volume in a short time. For example, Dune data shows that the total trading volume of the Solana ecosystem DEX aggregator Jupiter is close to $334 billion, while Uniswap took several times longer to reach $10 billion.
Additionally, the recent performance of the token price of Raydium, the most active DEX on Solana, has been extraordinary. Despite the pullback of BTC, ETH, and most altcoins, it still maintains an upward price trend, fully demonstrating the stable advantages that DEX and DeFi can possess amid price fluctuations.
Such a development path has already been established for TON in terms of infrastructure and development thinking; it just needs a spark to ignite.
History of Public Chain Growth
At the beginning of this cycle, TON has already been very impressive. However, in today's unclear cycle rotation, it is difficult for TON to have the previous time advantage and external momentum like Ethereum and Solana. Seeking stability, maintaining the improvement of infrastructure, and waiting for opportunities to explode still seem to be the main theme for TON, just like how TON has quietly prepared for the 2024 cycle development over the past year. By tracing the growth of Ethereum and Solana, we can find a clear development path for TON.
First, for the economic model of public chains to enter a positive cycle, the core lies in the continuous occurrence of transactions, representing all possible on-chain interaction behaviors.
On Ethereum and Solana, DEX and DeFi behaviors dominate, driven by users using DApps. Therefore, bringing a rich and diversified application type development approach to the ecosystem is suitable for TON.
In summary, both Ethereum and Solana have gone through the following steps:
1. Rapid Increase in the Number of Ecosystem Project Token TGEs
Simply put, during a good cycle, a large number of ecosystem projects issue tokens and go live on DEX, or DeFi can start operations.
Ethereum entered this phase in 2018, and by the time of DeFi Summer, it had completely formed a wave, which included the emergence of Uniswap, various wallet applications, and major EVM projects, DEX, and DeFi successively issuing tokens to stimulate business growth.
Solana emerged as a challenger to Ethereum during DeFi Summer, with the foundation driving a large number of project TGEs early on. Even though the chain was not yet perfect and on-chain interactions were limited, Solana's stimulation of the ecosystem has been ongoing, and even the impact of the SBF incident did not completely halt it.
At the start of this cycle, the number of tokens in the TON ecosystem surged, and the popularity and increase of tokens were also impressive, resembling the corresponding stages of Ethereum and Solana.
2. Growth of DeFi TVL
After a large number of ecosystem project token TGEs, the most direct impact is TVL. The native applications of public chains are all related to token trading, and DeFi categories account for 90%. The launch of tokens on DEX and the initiation of DeFi operations will lead to locked funds, so TVL data is the second inevitable metric for public chain growth.
Every token launched on a DEX must add trading pools, which is often the first locked fund. If engaging in DeFi business interactions, such as lending or depositing, it will also inevitably generate token staking, which is the second foundational action for TVL growth. Stimulating this action will be token airdrops, mining, and interest from deposits and loans.
During DeFi Summer, Ethereum received a dual stimulus from TGE and the explosive growth of DeFi tokens, with TVL increasing by about 100 times. Later, as prices rose, TVL soared again. The growth of Solana in this regard came from the ecosystem's popularity in 2023 and the airdrops and TGEs of ecosystem projects in 2024.
In the past six months, TON's TVL rose to $700 million but began to decline before breaking through $800 million, which is a result of the ecosystem's waning popularity. Like Ethereum and Solana, after the first growth, it needs to return to the richness of growth ecosystem application projects. Ethereum and Solana both took another two years; how long will it take for TON?
3. Accumulation of DEX and DeFi Richness
Ethereum and Solana completed their accumulation of richness over two years, one during the bear market of 2018 and the other after the heat retraction following DeFi Summer.
During this phase, Uniswap V1 matured on Ethereum, MakerDAO and AAVE emerged, Curve and Compound began, and Sushiswap quickly followed suit, with farm-type mining projects appearing one after another. These projects contributed to the maturity of DEX and DeFi, and by the second round of application development, DEX like Uniswap had iterated at least two versions, and DeFi like AAVE expanded from single-chain to almost all EVM chains.
During Solana's accumulation process, DEXs like Raydium and Jupiter emerged, along with a large number of DeFi projects staking SOL tokens. Therefore, the maturity of these applications is necessary, representing more convenient and faster user business usage, which will lock users' real money on the public chain.
TON's maturity is still early; currently, its DEX functions are relatively singular, and the number of DeFi projects is limited. Before waiting for an explosive opportunity, the first step is to increase the diversity and maturity of DeFi.
The First Step of TON's Growth
In the past year, TON has experienced the first growth in the number of ecosystem project tokens, with a large number of tokens and small to medium-sized projects starting to list, airdrop, and conduct IEOs, leading to a rapid increase in TVL. However, after this decline in TVL and prices, the waning popularity will also affect ecosystem projects, and rebuilding trust will be necessary in the future. The more this is the case, the more it requires practical help for ecosystem diversification in this round, specifically demanding the maturity of DEX and DeFi.
In reality, TON is currently at this stage, which is also the first step of TON's growth.
We can see that the DEXs of Ethereum and Solana have matured significantly through cycles. So, what is the current situation of TON? How far is it from them, and where does it fall short?
TON's performance and pressure-bearing capacity are currently the only ones that can stand shoulder to shoulder with Solana among all public chains, but the DEX of the TON ecosystem does not match its potential.
Telegram has integrated a centralized trading pool to complete the recharge of stablecoins and TON, and then complete the exchange of TON and other tokens, with an operational experience consistent with CEX's instant exchange. This function is the primary feature of Telegram's Wallet, while the second function is to interact with the on-chain wallet TONSpace, providing an experience similar to using MetaMask on PC and mobile. If token exchange is needed, STON and Dedust are commonly used within the ecosystem, but their functions are basically similar to Uniswap V1.
This reflects TON's shortcomings in DEX. If Telegram Wallet provides a CEX experience, TONSpace and DEX can interact on PC and mobile, while Telegram's MiniApp and Bot will serve as the trading front end for DEX or CEX functions. These designs meet the optimization of trading experience, but the back-end on-chain native interaction part is clearly lagging behind.
If the DEXs on Solana and Ethereum could only provide simple AMM pools and exchange capabilities like Uniswap V1, then the richness of DeFi on Ethereum and the business on Solana would be reduced by at least 50%.
On Ethereum, most DeFi extends financial scenarios beyond DEX functions. After Uniswap iterated on the design of LP in AMM, DeFi on Ethereum saw more new businesses or directly copied business models (initially based on liquidity mining and interest-bearing deposits, upgraded to multi-liquidity pool interactions, etc.). The same is true for Solana, where LPs and specialized liquidity platforms as advanced liquidity providers have become one of the best options for asset holders.
Therefore, from the perspective of project development, for DEX on high-speed blockchains, it is important to provide liquidity for trading or to modularize trading functions, allowing the advantages of liquidity to become a reason for user choice.
In TON, the entry point for trading must exist in large numbers within Telegram. DEXs need to increase the level of business refinement like Jupiter and Balancer, achieving balance for all users, whether they are users, token providers, liquidity providers, or platform developers. Each role requires a certain level of refined functionality to cooperate.
Compared to DEXs like Uniswap, Balancer, and Jupiter, the DEX on TON has become a necessary direction for developing and supplementing DEX or DeFi functions.
Currently, the known project LayerPixel has launched the first step of repairing DEX functions called PixelSwap based on Balancer's functionality. For DEXs, airdrops are the fastest way to attract users. In the new round of actions, LayerPixel has announced that PixelSwap has already started its airdrop plan, with the TGE date for the PIX token set for Q4. In light of the current changes in the TON ecosystem, PixelSwap may still be able to advance steadily like Raydium in the short term.
LayerPixel is a DeFi solution designed for Telegram Mini Apps, enabling seamless integration of DeFi with Telegram Mini Apps. It is officially referred to as TON's Layer 1.5. It can provide a modular combination of functions, including wallet, DEX (with various trading algorithms) services, oracles, etc. PixelWallet focuses on account abstraction, while Pixacle can provide fast and accurate price data for DApps and smart contracts within the ecosystem.
Pixelswap is a DEX based on weighted pools, consistent with Balancer's functionality, supporting the asset issuance method of LBP. This Dutch auction-style issuance method is suitable for small and medium-sized projects with low FDV, and the Telegram ecosystem is filled with such game/GameFi projects. This is why it is said that it can meet the DeFi needs of the TON ecosystem. The LBP asset issuance method is more convenient for small and medium-sized projects to complete token issuance in the early stages while maintaining a relatively reasonable trading price.
During the rapid development and growth phase, ordinary DEXs are mainstream, but once a downtrend begins, the prices of tokens in DEXs become harder to market compared to CEXs. At this time, the more refined the design, the more it can achieve a win-win situation. For the B-end, it is more suitable for control, and for the C-end, it allows unofficial LPs in DEXs to resemble mature LPs in centralized exchanges, actively ensuring the yield of funds while isolating risks and stabilizing prices.
At this point, during a phase of growth retracement, the emergence of such DEXs is quite timely.
In addition to PixelSwap, the liquidity sharing between DEXs on TON and the potential to form liquidity hedging structures among various DeFi projects also need to be stabilized. Currently, after projects issue tokens, they cannot establish staking mining or various types of deposit financial management in most DeFi.
One of the reasons for the rapid increase in token lock-up volume on Solana is that lending projects, staking, and restaking projects are following popular projects to increase their offerings. For example, Marginfi and Meteora on Solana have actively increased token pools for almost all newly emerged tokens on Solana. Although most tokens do not yield financial returns, the platforms provide incentives in the form of points or airdrop expectations, encouraging investors to deposit large amounts of assets in hopes of airdrop expectations. If TON follows suit, it will have the same effect.
In Conclusion
Before the Durov incident, our expectations for TON were very high, but the declining heat of the ecosystem has caused both ecosystem projects and investors to suffer. This is already a familiar rhythm in the industry; there are always investors whose persistence in projects is surprisingly long. Regardless of when the next opportunity to ignite arises, whether in a week or several months, it is time for builders to enrich the ecosystem.
At this stage of TON, users and projects will gradually realize the differences in new DEXs and new functionalities, or they may one day discover that new DEXs like PixelSwap have attracted a large amount of TVL and established numerous staking pools. This will indicate that the ecosystem is ready for another growth phase, prepared to handle the continuously increasing trading volume, the constant issuance of new projects, and the rapidly increasing liquidity pools and liquidity mining.
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