In the field of encryption, there is an unwritten saying: "Buy new, not old." In the vast sea of digital assets, the vast majority of encrypted tokens flash away like meteors, and many are even stillborn before they even shine. Looking at the dozens or even dozens of "hot tokens" purchased a few years ago in my wallet, while reminiscing, I still turn my attention to the next hot coin in the market. Tracking hot spots is always the iron law of getting rich in the cryptocurrency circle. Even the universe giant Binance is no exception. When facing some phenomenal Meme tokens such as BOME, they will eagerly launch them, regardless of the chaos after the heat dissipates.
Recently, the "ancient token" TON, published in 2018, has started to build up its strength after years of depression, and the total locked position has exceeded 78 million, reaching a new historical high. In addition, a large number of Memecoins have emerged in its ecosystem, and the TON Foundation has also announced the recruitment of the head of the Memecoin ecosystem, indicating a strong intention to develop the Meme ecosystem.
So much so that its public chain token Toncoin fell back after rising to 4.5 U. The TON ecosystem project also rose accordingly. For example, TonUP token rose to 0.95 U, an increase of 20%.
In terms of trading data, TON's increase in 2024 is 200%. With the rise in price, the token trading volume has skyrocketed, with the trading volume in the past three weeks being about four times that of one month ago. Moreover, with the rise in price, TON's total market value exceeds $15 billion, ranking 11th on the cryptocurrency rankings (excluding stablecoins and anchor coins), highlighting its value performance.
Moreover, TON is currently the only cryptocurrency among the top 30 cryptocurrency market capitalization tokens that has not been listed on Binance. This also means that its market liquidity lacks the traffic support of the world's top cryptocurrency trading platform. However, even so, it is still firmly close to the threshold of the top 10 market capitalization. What makes TON have such high value, and what force makes the TON ecosystem stand out?
What is TON (Toncoin)?
TON (The Open Network) is a decentralized network aimed at building an open internet environment for everyone. It was originally conceived by Telegram founders Nikolai and Pavel Durov and launched in 2018.
The combination of TON and Telegram began with a new blockchain platform (Telegram Open Network) developed by the Telegram team since 2017 and its vision for native cryptocurrency Grams. The goal of this project is to improve the speed, efficiency, and security of daily business transactions through TON blockchain technology, making Grams a true supplement to traditional currency. Telegram hopes that TON blockchain can create a stable ecosystem and represent significant improvements in speed, availability, and scalability.
However, due to legal conflicts with the US SEC, Telegram had to abandon the project and was subsequently taken over by a developer community called NEWTON, which was renamed TON Foundation to continue research and development. The project name and native cryptocurrency were also updated to The Open Network and Toncoin, which also means that the project is shifting towards a more decentralized concept.
However, the TON ecosystem still receives extensive support from the Telegram community, which seamlessly connects with the original intention of TON's birth. With the support of Telegram, TON-based encrypted wallets and various DApps are seamlessly integrated into its platform, making it easy for nearly one billion users to use cryptocurrency.
In addition, the TON Foundation and Telegram officially announced their cooperation at the Token 2049 event in Singapore, jointly promoting the transformation of Telegram into a Web3 platform. This close cooperation not only promotes Toncoin's market position, but also provides new impetus for the cryptocurrency community on Telegram.
With the launch and integration of more products and applications, the partnership between TON and Telegram will continue to expand its influence, further increasing Toncoin's adoption and visibility, injecting vitality into the entire ecosystem.
II. TON Token Economics
Token Supply: The initial supply of TON tokens is 5 billion, with no limit on supply, growing at a rate of about 0.6% per year (about 30 million tokens). Tokens are used to reward validators. If the validator behaves improperly, the pledged tokens will be slashed. Currently, staking TON can earn about 3.73% APY.
Token Utility: Telegram Wallet currently allows direct credit card purchases of TON, and then purchases of virtual goods such as anonymous accounts. In the future, Telegram promotion may also consume TON.
Token distribution: The team owns 1.45% of the tokens, and the remaining 98.55% were mined by POW in the early stage. That is, a large number of chips were concentrated in the hands of early miners. The team introduced the following measures to optimize this problem: first, in February 2023, the "TON Token Economic Model Optimization Proposal" was passed, freezing inactive wallets for 48 months (a total of 171 wallets held more than 1.081 billion TON, accounting for 21% of the total at that time); second, a large amount of TON was resold at a discounted price;
Chip distribution: Currently, 85.53% of users hold TON below $1k, 14.05% hold TON between $1k and $100k, and only 0.42% of whales hold TON above $100,000. Holders who hold tokens for more than a year account for about 18.08% of the total holders, and the proportion of holders who hold tokens for about a month is 12.20%.
III. The potential and risks of TON in this round of market trends
Many public chains in this cycle are imitating Solana, attracting users through the wealth creation effect of memes, and TON is also one of them. In recent days, FISH has led the surge of memecoin in the ecosystem, and many people believe that TON will become the next Solana.
Currently, Toncoin ranks 11th on CoinMarketCap with a market value of 17.10 billion USD, while Solana, ranked 5th, has a market value of 78.30 billion USD, a distance of five times. Will Telegram public chain Ton become a challenger to Solana?
When discussing whether TON can replicate Solana's successful trajectory, we can divide the discussion into two viewpoints: positive and negative.
Positive view: TON has its unique advantages and potential
TON's own characteristics are fast block finality time, fast transaction time, large maximum number of sharding, and higher communication speed than Ethereum: Ethereum interacts with a smart contract for all users, and transactions are executed in order; while TON can create a chain for each user's wallet, and the parallel computing of sharding, support for instant cross-sharding communication, and TVM support for asynchronous computing constitute the theoretical basis of its high TPS.
TON's architecture design has native sharding support, theoretically capable of processing 104,715 transactions per second and maintaining high efficiency. In addition, TON's multi-chain structure and ability to support custom work chains provide strong flexibility for different types of applications.
Moreover, when we discard the confusing external vocabulary, TON's core value capture still comes from Telegram's platform value.
- 1 billion valuation of internet users.
- Liquidity demand generated by using TON as advertising fees within the platform.
- Telegram's convenient and smooth marketing communication and customer acquisition capabilities.
- Product integration design that completely breaks the entry barrier of Web3.
Referring to any platform with such characteristics, TON can continuously provide the value it wants to capture, and businesses closely related to TON and the ecosystem will benefit infinitely. Currently, TON's official ecosystem has included 551 applications, including staking, wallets, browsers, cross-chain bridges, public facilities, NFTs, social media, games, decentralized exchanges, and other projects.
This is also the biggest advantage of TON compared to other encryption projects. Backed by Telegram's nine hundred million MAU and its mini app function, TON can provide a unique User Experience in the social and gaming fields, which is difficult for other blockchain projects to replicate.
Growth of community and ecosystem: Although TON is a latecomer, it is rapidly developing its ecosystem, providing rich power builders and resources. TON's vision is to drive the development of the ecosystem through the power of the community, rather than relying on a single development team or company.
Counterargument: TON faces challenges and limitations
Although TON theoretically has a high TPS, there are stability issues in practical operation. Moreover, although TON blockchain has shown growth potential in the DeFi field, it still faces some challenges and disadvantages. Its DeFi ecosystem is still in its early stages, and the current DeFi applications and tools are relatively limited, as well as centralization and capital efficiency issues. These factors may affect TON's attractiveness and credibility in the fiercely competitive DeFi market. TON's TVL is still incomparable in absolute value compared to other networks such as Polygon or Solana.
Legal and regulatory risks: Previously, Telegram's founder stated that he plans to go public on the stock market through IPO. Can this avoid repeating the same mistakes and avoid legal and regulatory risks? If not, it will limit TON's development space.
Market manipulation and cyber security risks: When we analyze the on-chain chips of TON, we can see that the total amount of TON is 5.10 billion, the circulation is 3.80 billion, the project party has about 960 million, and the early low-cost miners have more than 1 billion.
This distribution pattern highlights that the development team and relevant stakeholders have retained a considerable portion of tokens, which may be used for future development, marketing activities, and ecosystem rewards. However, it also indicates the fact that the TON ecosystem relies on these key supporters in the early stages, which may lead to instability in market supply and price fluctuations.
When these early miners decide to sell a large amount of their cryptocurrency holdings, it may cause a sharp drop in market prices, affecting the interests of other investors. In addition, excessive concentration of coins may also increase the risk of the network being manipulated by a few people, thereby affecting the decentralized nature and security of the blockchain network.
Conclusion:
Overall, since its establishment in 2018, TON has experienced a series of challenges and transformations, including ICO, restart, and ecosystem reconstruction. With the active promotion of the foundation, its market value has achieved significant growth, and its user base is also expanding. With flexible and unlimited sharding technology and efficient consensus mechanism, it has become a blockchain network with scalability and high security.
Based on its integration of Telegram's user base and good technical framework, it has huge development potential. TON's infrastructure, Mini Program applications and other directions are worth paying attention to, but both investors and developers need to make cautious decisions based on a deep understanding of TON's ecosystem and related technologies.