The TON Foundation has put forward a proposal to introduce a burn mechanism in the TON network, aiming to eliminate 50% of transaction fees. Details about the proposal revealed that, while it is similar to the Ethereum EIP-1559 upgrade, the effect on the TON network will be minimal.
The Telegram Open Network (TON) was an ambitious blockchain project envisioned by Pavel Durov, the founder of Telegram. TON aimed to provide a decentralized platform for various digital services, including messaging, payments, file storage, and more. It was designed to leverage blockchain technology and smart contracts to create a secure and scalable ecosystem.
The TON Foundation’s plan entails burning half of all transaction fees collected within the TON network. This strategy draws parallels to Ethereum’s EIP-1559 upgrade, which significantly reduced network inflation by burning a substantial portion of transaction fees. However, in TON’s case, the impact on inflation will be comparatively smaller since transaction fees are a fraction of the network’s staking rewards.
Kirill Emelyanenko, a core lead developer at the TON Foundation, explained that the initial deflationary status of Toncoin was between 350 and 400 at a daily issuance of 71,000 Toncoin. However, the rates are expected to increase as TON expands, resulting in deflation in the total and circulating supply.”
If the proposal, which is meant to be voted on by the community on June 15, 2023, is agreed to, a portion of the tokens involved in a transaction will be destroyed, while the remainder will be allocated to the validator. Validators will also continue to receive staking rewards for their contribution to network operations.
Telegram Open Network to The Open Network
TON, which was initially controlled by Telegram, planned to introduce its own native cryptocurrency called Gram, which would serve as the medium of exchange within the network. The project gained significant attention and support during its initial coin offering (ICO) in 2018, raising billions of dollars from private investors.
However, TON faced legal challenges from regulatory authorities, particularly the United States Securities and Exchange Commission (SEC), which argued that Gram tokens were unregistered securities. This led to a protracted legal battle, and ultimately, Telegram decided to abandon the TON project in May 2020.
Read also;
Mask Network moves for an investment initiative in TON
TON Network allocates $25M to fund projects
