The plan for TON (The Open Network) to onboard a billion users is gaining traction, particularly due to its integration with Telegram, one of the most widely used messaging platforms globally.
A lot of projects and firms, like Solana, have championed the vision of onboarding the next billion people into crypto. Among them is TON, but can TON be the one to ultimately achieve this goal?
History and Overview of TON and TONcoin
Toncoin (TON) is the native cryptocurrency of The Open Network, a decentralized layer-1 blockchain originally developed by Telegram in 2018 as the Telegram Open Network (TON). Following regulatory challenges leading Telegram to hand off the project in 2020, the community took over development and rebranded it as The Open Network.
The legal issues with the U.S. Securities and Exchange Commission (SEC) regarding Telegram’s $1.7 billion initial coin offering (ICO) for Gram led Telegram to settle with the SEC, paying an $18.5 million fine and agreeing to return unspent funds to investors.
After Telegram’s exit from TON, its takeover by the community, and the establishment of The TON Foundation, to promote and support the ongoing development of the network, the cryptocurrency, Gram, was renamed to Toncoin ($TON) as part of this transition.
Barely four years after the rebrand, in May 2024, the TON network achieved a notable milestone by onboarding over 1 million users in a single day. This demonstrates its potential for rapid growth. Also, as of July 2024, the TON ecosystem hosted over 1000 decentralized applications (dApps) and has a DeFi total value locked (TVL) exceeding $760 million.
The strength of TON
The Open Network has experienced significant growth in its user base over the past year, driven by its integration with Telegram and the launch of engaging applications within the ecosystem. Apart from surpassing 1 Million users in a single day, in 2021, here’s an analysis of TON’s successes and what can make it achieve the 1 billion mark:
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Steady growth to 32 million Active Users
As of August 5, 2024, TON’s user base has surpassed 45 million wallets, showcasing steady growth and increasing adoption. The network has attracted a large user base due to its integration with Telegram, which has over 900 million monthly active users.
This growth can be attributed to the new applications launched on the blockchain as well as those that migrated from their previous blockchains to TON. First on this list is Notcoin.
In other news; Telegram’s support for TON sites will bring decentralized Web3 sites alive
Notcoin, built on TON, is a unique cryptocurrency project that gained significant popularity in 2024 by combining gaming, community engagement, and blockchain technology. Notcoin pioneered a tap-to-earn or clicker model on the Telegram messaging app, allowing users to earn tokens by tapping on a virtual coin on their screen.
The game quickly went viral, attracting over 35 million users at its peak, with more than 6 million daily active users (DAUs). The simplicity of the game and its integration with the popular Telegram platform made it an instant hit, as users could earn real cryptocurrency without any initial investment.
Other projects, though their tokens are not yet launched, include Hamster Kombat, Catizen, Tapswap, and Blum. These games have garnered millions of users, with Hamster Kombat alone boasting an impressive 239 million registered users.
The presence of these projects also led to exponential growth in active addresses on TON from 150,000 in September 2023 to over 1.2 million by July 2024. Particularly, in June 2024, TON’s daily active addresses peaked at a record 568,300, edging out Ethereum’s (without the Layer 2s) for the first time.
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Transaction speed and fees
TON showed an impressive transaction speed capability of more than 100,000 transactions per second (TPS) during a public test verified by Certik. However, the average TPS according to TONscan is at 70 which is above 12.7 for Ethereum and less than 806 for Solana.
Transaction fees on the TON network are significantly lower than those of Ethereum and Bitcoin, ranging from $0.01 to $0.05 per transaction. The network’s focus on scalability and efficiency, combined with low transaction fees, makes TON an attractive option for users and developers.
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Ecosystem integration with Telegram, and USDT
TON’s integration with the Telegram messaging app, which has over 950 million users, gives it a significant advantage in terms of user adoption and ecosystem growth. This integration allows TON to leverage Telegram’s existing user base and tap into a wider audience compared to other cryptocurrencies.
The presence of popular applications like Notcoin and Hamster Kombat, allowing channels with over 1,000 subscribers to earn 50% of ad revenue, and the ability to purchase ads using Toncoin on Telegram, all point to a huge potential for attracting more users to both Telegram and TON.
Another advantage TON has is the integration of USDT (Tether) into the network. USDT is a widely used stablecoin available on multiple blockchains.
Users can now deposit and withdraw USDT on the TON network, and send it to other Telegram users without transaction fees. To do this, search for @wallet in Telegram. This bot acts as a cryptocurrency wallet within the app. Follow the prompts to set up a wallet and you can easily send any amount of USDT to other users.
Three additional advantages of TON are its partnerships with reputable brands like Animaco Brands and Trust Wallet; the TON ecosystem is expanding rapidly, with over 200 projects launched via Notcoin Explore, attracting 22.5 million users; and its sharding technology and multi-chain architecture, which enable it to scale more effectively than other blockchains.
TON can process transactions in parallel across multiple chains, making it easier to handle a larger number of users and transactions simultaneously.
Challenges and Concerns
While Toncoin (TON) has made significant strides in terms of user growth and adoption, there are some challenges and concerns when projecting its ability to scale to a billion users.
In 2019, the U.S. Securities and Exchange Commission (SEC) alleged that Telegram’s initial coin offering (ICO) of Gram tokens constituted an unregistered securities sale. This led to a global ban on Gram tokens and severely impacted the TON project.
Four years after the incident and the continued development of TON, uncertainty about TON’s legal status, especially in the U.S., has made major exchanges hesitant to list Toncoin. Exchanges serving U.S. clients are particularly cautious due to potential regulatory issues.
Currently, Toncoin (TON) is not listed on any major U.S. exchanges such as Coinbase or Binance.US. However, it is available on several international platforms where users can trade it. Notable exchanges that support Toncoin include Binance, which offers futures contracts for the token, and OKX, where users can trade Toncoin in various pairs.
KuCoin is another platform that allows the buying and selling of Toncoin, along with Bybit, which also provides trading options for the token. Additionally, HTX (formerly known as Huobi) lists Toncoin for trading.
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It is no news that the US has a huge role to play in the crypto market. For example, as of 2024, there are approximately 2,721, out of over 10,000 crypto companies globally, headquartered in the United States. This places the U.S. as the leading country in terms of the number of crypto companies, followed by regions such as the European Union and Asia.
In terms of VC funding, Web3 firms in the US also attract more than other regions. The implication of this is that the expected liquidity that should flow from the US economy in the TON economy will be minimal until there is approval from the SEC on how TON will operate in the US.
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Reliance on Telegram’s Success
TON’s success is heavily dependent on Telegram’s continued growth and adoption. If Telegram were to face setbacks or a decline in popularity, it could negatively impact TON’s user base and ecosystem development. Although Telegram has a user base that is more than 900 million users, any dent on Telegram is most likely to affect TON.
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Higher risk of centralization and control
TON lacks a truly decentralized governance model compared to cryptocurrencies like Bitcoin and Ethereum which have robust decentralized decision-making processes. The TON Foundation still maintains significant control over protocol upgrades and changes.
While TON uses a proof-of-stake consensus model, there are concerns that the network’s validator set could become overly centralized over time if the TON Foundation maintains too much influence. Truly decentralized cryptocurrencies have more widely distributed validator sets.
Also, looking at the token distribution of TONCOIN, there are 3,600,868 TONCOIN holders. The top 10 holders control 62.11% of the supply, while the top 20 hold 71.02%. The top 50 and top 100 hold 86.50%, and 92.87% respectively.
This indicates that a small number of holders possess the majority of TONCOIN and there is a higher risk of manipulation. It is riskier when compared with projects like Bitcoin (top 50 and 100 holds 12.02% and 14.9% respectively); ETH (top 50 and 100 holds 53% and 57% respectively); and Solana (top 50 and 100 holds 17.52% and 22.76% respectively).
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Competition from more popular blockchains
TON faces competition from other established layer-1 blockchains such as Bitcoin, Ethereum, Solana, and Avalanche. These competitors have well-established ecosystems, user bases, and brand recognition, making it challenging for Toncoin to capture significant market share.
Although Telegram’s integration of TON opens pathways for user adoption, many potential users may still lack a comprehensive understanding of blockchain technology and cryptocurrency. This is why The Open Network Foundation should invest in crypto education.
In other news: What Trust Wallet partnership with TON Blockchain mean for the ecosystem
What about the likelihood of Sui or Aptos, with team members from the team behind Libra, a famous digital currency that was developed by Facebook, now Meta, being integrated into Facebook, WhatsApp, and Instagram?
Facebook is the largest social media platform with over 3 billion users, WhatsApp has over 3 billion users also and Instagram more than 2 billion users. If this integration happens, does TON stand a chance to hit this mark?
Additionally, unforeseen technical challenges unique to blockchains could arise, particularly as the network grows and increases transaction volumes.
Roadmap and Future Potential
The TON Foundation aims to reach 500 million users by 2028 by integrating blockchain technology within Telegram, potentially driving widespread acceptance of blockchain applications.
Key developments include improvements to decentralized exchanges, wallets, marketplaces, and blockchain games.
The roadmap also features the launch of core components like TON DNS for domain names, TON Payments for payment solutions, TON Proxy for privacy, and TON Storage for decentralized storage.
In 2024, TON plans to introduce a stablecoin toolkit to expand financial products. It will also develop cross-chain bridges for Bitcoin, Ethereum, and Binance Coin to improve interoperability.
The TON wallet will see enhancements for better security and user control. Fisherman voting for staking pools will promote decentralization, and TON Teleport will allow instant, trustless transfers across different blockchains. Fisherman voting is a governance mechanism being introduced on the TON blockchain, designed to facilitate decentralized decision-making within the ecosystem.
This system allows users to participate in governance proposals and voting using native coins (Toncoin), jettons, or NFTs, with programmable strategies that can influence voting weights based on factors like token rarity.
The voting process occurs on-chain, incurring gas fees, but future iterations of the system are expected to support gasless voting through off-chain signatures. A significant aspect of Fisherman voting is that votes can be weighted according to a user’s Toncoin balance, jetton holdings, or NFT ownership, with results calculated based on a historic snapshot of balances defined in the proposal.
This approach helps to prevent the manipulation of votes, ensuring that tokens cannot be borrowed or purchased solely for voting purposes, thus maintaining the integrity of the voting process.
TON Teleport is a planned infrastructure project for the TON ecosystem that allows users to transfer BTC between the Bitcoin blockchain and TON without relying on central intermediaries. It uses a trustless system for heightened security and autonomy, ensuring that transactions are transparent and free from outside control.
The process involves users sending their BTC to a specific Bitcoin address unique to each user. Once the Bitcoin transaction is confirmed, an equivalent amount of BTC will be issued to the user’s address on the TON Blockchain. Users can then use these BTC tokens in various dApps on TON or redeem them for BTC on the Bitcoin network. For the reverse process, users will burn their BTC tokens on TON, which triggers the release and return of their BTC.
TON Teleport BTC aims to boost the DeFi sector within the TON Blockchain by allowing for new Bitcoin-based financial mechanisms and products like DEXs, lending platforms, and advanced wallet services. Bitcoin will be transformed from just a stored asset on TON into a tool for generating additional returns.
Closing
Given the robust foundation and promising trajectory of the Telegram and TON ecosystem, it’s undoubtedly an exciting time for investors and users alike. The question now becomes: considering these factors, is TON poised to be the first to reach the billion-dollar valuation milestone? The ecosystem’s rapid growth and the backing of a massive user base through Telegram certainly position it as a strong contender in this race.
