MT Capital Research: TON: Telegram Becomes the WeChat of the Web3 Realm, An Inevitable Link

By Ian, Betty, Xinwei, Momentum Capital；Vivi, TON Foundation

In recent years, we have witnessed the emergence of various Layer 1 (L1) public blockchains such as Ethereum, Polygon, Solana, and Aptos, most of which are pursuing high performance, EVM compatibility, and more. However, aside from Ethereum, which has maintained innovation through its active developer community and user base, continually introducing applications like Uniswap and AAVE that create new value domains for users, other public blockchains mostly replay the same script — copying the market’s DeFi trio, attracting users/traffic from other chains with airdrops, high APYs, token listings, and developing ecosystem projects to drive the rise of their blockchain’s token. Homogenization of chains, products, and user groups largely relies on rewards or airdrops for “hiring”, making it impossible for innovation to meet user needs. In bull markets, the bubble effect makes these blockchains appear prosperous, but it’s only in bear markets that we see who is truly vulnerable.

Recently, whether it’s ZK, AA, or L2 solutions, there’s been a trend toward pursuing technology detached from specific products, repeating the same narrative, essentially a case of old wine in new bottles, leading to a high degree of internal competition. Moreover, the issue of liquidity fragmentation in L2 has become increasingly severe.

In the red ocean of public blockchains, what’s lacking is not high performance or narratives, but users with real needs for the blockchain. The TON blockchain, backed by Telegram with nearly 900 million monthly active users, stands out from the multitude of blockchains due to its deep connections with Telegram. With a broad global user and developer base, Telegram has long been unsatisfied with being merely a social messaging platform. By continuously enriching its product line (Dapps) and creating links to high-frequency payment and lifestyle scenarios, it aims to transition into a social platform and ultimately a super app similar to WeChat. If Telegram is the WeChat of the Web3 realm, then TON is its indispensable public blockchain.

Recent Highlights of TON

In February, Telegram’s founder Durov openly declared the official sales channel for TON tokens on his personal channel, bringing TON and Telegram closer together in an unspoken understanding.

Telegram Advertising Platform Utilizes TON

The Telegram advertising platform will officially open to advertisers in nearly a hundred new countries, with channel owners in these countries receiving a 50% commission from the revenue generated by Telegram displaying ads on their channels.

The official statement indicated that to ensure rapid and secure ad payments and withdrawals, the TON blockchain will be exclusively used. The revenue will be shared with channel owners, creating a virtuous cycle where content creators can cash out their Toncoin, or reinvest it to promote and upgrade their channels.

Fish

The first meme coin on TON was launched fairly, boasting over 22,000 holders. Currently, it has a market cap of $47 million, with a staggering 14-fold increase in value in March. It has officially announced partnerships with several projects: TonRaffles, Tonano, Tap Fantasy, RoOLZ, Catizen.

Telegram is Poised for an IPO

According to the ‘Financial Times’ of the UK, Telegram’s founder, Pavel Durov, revealed that Telegram has reached 900 million active users and is nearing profitability, with revenues reaching hundreds of millions of dollars. The company anticipates going public later this year or next year once it achieves profitability, with the United States as a potential listing location. Durov mentioned that, during the IPO, Telegram would consider offering shares to its loyal users.

Telegram has raised approximately $2 billion in debt financing, including a $1 billion bond issue in 2021, and bonds worth $750 million and $270 million issued last year. If the company goes public before the end of March 2026, these bondholders will have the option to convert their senior unsecured debts into equity at a discount of 10% to 20% off the IPO price.

Introduction to TON

The Open Network (TON), originally named Telegram Open Network, was created by Telegram in 2018 with the goal of developing a powerful and scalable blockchain platform. It completed the largest ICO fundraising in history through its token, $Grams. However, due to allegations by the SEC of conducting an unregistered securities offering, in 2020, the Telegram team agreed to pay a $18.5 million fine and settled with the SEC, abandoning the Telegram Open Network project and returning the ICO-raised funds in USD.

Afterward, the Telegram Open Network was continued by a community known as NewTON. In May 2021, the community voted to rename the long-running testnet 2 to Mainnet; the NewTON community was rebranded as the TON Foundation, serving as a non-profit community to support and develop TON. The Telegram Open Network was also renamed to The Open Network.

The TON Foundation is now the main force driving the development and growth of TON. The TON Foundation supports initiatives that contribute to the mission of creating an open network, maintaining the community’s interests, and supporting the development of TON projects without controlling the TON technology. The TON Foundation team consists of over 50 people, with more than half from countries like Russia and Ukraine, covering areas such as business development, engineering, marketing, finance, and legal, with most employees having experience at VK and Telegram. Notably, one of the core founding members of the TON Foundation, Andrew Rogozov, is the former CEO of VK.com, a social network founded in Russia by Telegram’s founder, with VK.com’s first CEO being Durov himself. Additionally, TON Foundation members include Bill Qian, former head of global M&A and Binance Labs at Binance, and John Hyman, former chief investment advisor at Telegram.

TON Blockchain Development and Current Status

TON aims to offer easy-to-use tools and a reliable, stable infrastructure to make massive adoption easier. Though TON was listed on exchanges in 2021 and subsequently introduced features such as TON payments, storage, DNS, and cross-chain bridges (the official bridge supports TON/ETH and BSC), it was the surge of Telegram Bots like Unibot and Bananagun in July last year that truly drew widespread attention. In September, at the Token 2049 event, Telegram officially announced its collaboration with TON and launched the self-custodial crypto wallet TON Space, propelling TON to new heights. As a result, the price of TON rose from $1.2 in August of the previous year to $3.8 (a 215% increase), pushing its market value into the top twenty and making it a standout performer during the bear market. Now, even though TON’s hype has cooled, being the only public blockchain officially supported by Telegram and backed by Telegram’s 900 million active users, TON is set to unfold a narrative completely different from existing public blockchains, focusing on performance (TPS), MEV compatibility, and storytelling from the angles of payment, social networking, and mini-programs, against the backdrop of the current landscape of public blockchains.

As of March 20, 2024, the TON blockchain hosts 301 validators, with a total of 440 million $TON staked under the PoS mechanism, distributed across 29 countries. The total number of accounts on TON has been showing a long-term growth trend, currently standing at 8.12 million accounts. Official information from the Dubai conference indicates that, over the past year, TON has achieved a 2.5-fold increase in active user addresses, with a daily transaction volume of approximately $220,000. The current Total Value Locked (TVL) on the TON blockchain is $53.43 million, with 13 projects listed on DefiLlama. Beyond the TON blockchain, TON also includes TON Storage — a decentralized file storage system; TON DNS — which assigns readable names to accounts, smart contracts, services, and nodes; TON Pay — a micropayment channel for instant off-chain transactions; and TON Proxy — a network proxy anonymity service for the TON network to hide the IP addresses of TON nodes. Although TON has been established for 5 years, the grand vision for TON is just beginning to unfold, with developers and users gradually exploring this ecosystem.

Token Economy

The initial supply of the token $TON was 5 billion, with the last $TON mined on June 28, 2022. The supply of $TON is unlimited, growing at a rate of approximately 0.6% per year (about 30 million tokens). After settling with the SEC in 2020, all tradable $TON tokens were placed in a special Giver smart contract for mining by anyone, thus 98.55% of the tokens were allocated in the early PoW (Proof of Work) mining, leaving only 1.45% of the tokens in the hands of the team. Unlike the early tokens of most public blockchains, which are held by large capitals, a significant number of $Ton are held by early miners, leading to a more dispersed distribution of chips. To address the issue of most tokens being held by early miners, in February last year, TON initiated a community proposal, freezing 171 inactive early wallets for 48 months with a total of 1.08B $TON (about 21% of the total supply). If this frozen portion of $TON is considered, TON’s total market value would rank in the top 10 of the cryptocurrency market. After the last $TON was mined and the transition from PoW to PoS (Proof of Stake), the annual inflation of 0.6% (about 3 million tokens) of $TON will be used to reward validators who maintain network security, but validators may lose their staked $TON for misconduct. According to information revealed at the Dubai conference, TON intends to increase staking rewards to further boost the staking rate on the TON blockchain.

The token $TON has multiple use cases, such as paying transaction fees on the TON blockchain, staking, cross-chain transactions, and in the future, $TON could also be used for paying for TON proxy services. The positioning of $TON is similar to fiat currency on Telegram, and its application on Telegram is particularly noteworthy. For example, $TON can be used to pay for Telegram Premium membership fees at a more favorable discount. Currently, Telegram wallet allows direct purchase of $TON with credit cards, which can then be used to buy virtual goods like anonymous accounts. It is reported that anonymous accounts worth a total of $50 million were sold out within a month of their launch. To date, anonymous accounts have generated sales of $130 million, highlighting the enormous payment potential of $TON. In the future, $TON could also be used for Telegram promotions, with advertising services payable in $TON.

Furthermore, the $TON token may undergo deflation as the network’s usage increases. This is because, in June of the previous year, the TON Foundation proposed introducing a burning mechanism: 50% of the transaction fees generated from transactions on the TON chain, as well as from domain and number auctions within the TON network, will be used to burn $TON.

TON Token Analysis

As of March 20, 2024, the total supply of $TON is 5.104 billion, with a circulation of 3.469 billion. The price per token stands at $3.8, resulting in a Fully Diluted Valuation (FDV) of $19.276 billion and a Market Cap of $13.101 billion, ranking it 13th. $TON is currently listed on CEXs such as Bybit, OKX, Kucoin, and Bitget, and has contracts listed on Binance. $TON has also become the highest-ranking token not yet listed on Binance spot. Given time, if TON’s visibility and user traffic see explosive growth, $TON would become a prime candidate for listing consideration by Binance. Looking at the distribution of tokens, the top ten wallets hold 38% of the total $TON supply, and the top 100 wallets hold 49%, indicating a dispersed distribution of tokens and mitigating potential selling pressure from being heavily owned by investment institutions and project parties. Moreover, TON has launched the TON Believers Fund, locking up over 1.317 billion $TON (about 25% of the total supply). The TON Believers Fund allows any $TON holder to donate or lock their tokens for 5 years: a 2-year lock-up period followed by a 3-year vesting period, with the donated tokens being rewarded to all depositors starting from the 3rd year. According to current public information, 10.54% of the tokens were donated to the TON Foundation by the community in 2022.

Compared to existing public blockchains that envision mass adoption, if we assess TON chain using the common public chain metric of “market cap/TVL,” it’s clear that TON has the highest “market cap/TVL,” indicating a risk of overvaluation in TON’s price. However, as will be discussed below, TON’s value should not be assessed using traditional public blockchain valuation methods. Instead, it should be evaluated from the perspective of its grand narrative in combination with Telegram, focusing on transaction volume and protocol revenue from Dapps. This is because the effect of making money through DeFi may not necessarily retain traffic in the long term, as can be seen from the dwindling TVL of public chains like Avalanche and Fantom during bear markets. Thus, the key lies in low-barrier user experiences, integration with daily high-frequency life scenarios, and massive traffic entries. This represents TON’s core competitiveness — its deep integration with the Telegram ecosystem. The application experience TON offers, deeply integrated with Telegram, far surpasses that of most Web3 products, and its comparable valuation can be benchmarked against Web2 entities with similar ecosystem experiences, like WeChat and WhatsApp. From this perspective, TON’s current valuation of only 7–8 billion is still undervalued. Although we are optimistic about TON’s long-term development and its huge future potential, a 5–10 fold return on the $TON token would likely require the arrival of a major bull market.

TON’s Crucial Role in Telegram’s Web3 Vision

Telegram’s Inherent Web3 DNA

Telegram is a cloud-based free instant messaging software founded in 2013 by Nikolai and Pavel Durov, the creators of VK (one of Russia’s mainstream social media platforms). Telegram’s commitment to free speech and privacy protection has attracted a global user base, with over 1.3 billion registered users and nearly 800 million monthly active users (MAU). The platform’s lenient atmosphere for speech and regulatory environment have made Telegram an “important stronghold” for the crypto world — almost all Web 3.0/Crypto projects have Telegram communities for project announcements, news dissemination, and community interaction. The activity level of Telegram communities has become an important metric for assessing a project’s marketing capabilities. Moreover, more than half of the Channels and Groups with the highest subscription/member counts on Telegram are related to crypto content (as shown below, the two largest Groups on Telegram are crypto-related). Most importantly, according to statistics from the TON Chinese channel, Telegram hosts over 37,000 active crypto communities.

Due to regulatory reasons and others, a large number of real users have migrated from Slack and WeChat groups to Telegram. This shift has given rise to a significant demand for services beyond group chat functionality, such as news, announcements, notifications of large transfers, and more. Telegram has timely captured these user needs by revamping its emoji system, launching story video sharing, and introducing blockchain-driven anonymous number logins (with +888 as the prefix for virtual phone numbers). Moreover, the immense success of WeChat as a social platform serving a wide user base has prompted Telegram to move closer to WeChat, attempting a transformation from a communication protocol to a social platform, and ultimately into a large, integrated super app.

Furthermore, Telegram’s open-source nature, open API, and rich database have made it a developer-friendly platform, attracting a large number of developers to build apps on it.

Based on the above discussion, it’s clear that Telegram has amassed a broad and active user and developer base, fully equipping it with the necessary conditions to build its own public blockchain or even a unique Telegram-closed-loop blockchain kingdom — users and developers. In this context, coupled with the Telegram founders’ support for blockchain and the aim to commercialize Telegram through blockchain, TON and Telegram Bots naturally emerged.

The Iron Triangle of Telegram’s Web3 Domain: Wallet, Dapp/Bot & TON

Wallet

The success of WeChat is not solely due to its social features but also its financial functionalities — we can use WeChat for transferring money, splitting bills, ordering rides, booking train tickets, online shopping, topping up mobile credit, and more, covering a wide range of online and offline life scenarios. In China, a smartphone with WeChat is all you need to step out of the house. The network effect of the internet enables the user base to grow exponentially. Similarly, a large number of crypto enthusiasts commonly use TG (Telegram) as one of their core communication tools with the community. As the crypto world expands, the network effect will come into play here, making the TG platform a vital communication tool for crypto enthusiasts and project teams, subtly trending towards becoming the WeChat of Web3.

Just as the widespread development of mobile internet in China is inseparable from the emergence of WeChat Pay and Alipay, the growth of Web3 from attracting new users to mass adoption also relies on a traffic portal — a crypto digital wallet — a simple, secure digital wallet! Of course, apart from facilitating free trade of various crypto assets like most existing crypto wallets, it is more crucial for such a wallet to link with traditional currencies, allowing users to easily exchange and move between fiat and crypto currencies. The emergence of the non-custodial wallet @Wallet built into Telegram enables users to access and use @Wallet without leaving the Telegram platform, perfectly meeting the needs of Web2 users. Its convenience and simplicity lower the entry barrier and learning costs for Web2 newcomers, making it the preferred wallet for Web2 users transitioning to Web3. Moreover, since @Wallet can also operate on the mobile Telegram app, and people use mobile phones more frequently and for longer durations than computers, the emergence of @Wallet also signifies a quiet shift from PC Web3 to mobile Web3. One problem that all social solutions in Web3 haven’t solved is that users must first have some app, which is precisely the hardest step in mass adoption. The core logic behind Telegram’s built-in wallet is that users don’t need to download another app; it naturally inherits users’ trust in Telegram, making the last step much simpler.

So, what features does @Wallet offer? @Wallet is Telegram’s built-in non-custodial wallet, similar to Alipay and WeChat Pay. It can be opened directly within the Telegram chat interface without the need for a password. Users can use bank cards to purchase, receive, trade, and transfer cryptocurrencies, and easily pay for products and services on Telegram using $TON, $USDT, or $BTC via Telegram Bots. Furthermore, @Wallet could potentially become the Telegram version of Yu’E Bao, offering users flexible cash management functionalities by integrating assets such as government bonds.

In September last year, Telegram introduced a new feature called TON Space — a self-custodial version of @wallet, directly integrated into Telegram’s @wallet interface. Third parties cannot access users’ assets, allowing users to settle payments directly on the TON Space page without being redirected to a third-party payment platform. This enhancement not only improves the wallet’s security and privacy features but also strengthens the cryptographic financial attributes of the Telegram platform itself. Unlike existing wallets like MetaMask or TP Wallet, TON Space allows users to recover their wallet using an email and their Telegram account, offering additional convenience and security. Currently, the user interface of TON Space resembles that of MetaMask, allowing users to receive, send, and exchange tokens, with the wallet page displaying the NFT assets held by the wallet. However, it is not yet possible to open Dapps through TON Space, but this functionality is planned for future release. According to the team, the TON Space wallet will support projects within the TON ecosystem, meaning users can link their Telegram accounts to ecological projects on the TON blockchain. The official version of TON Space is expected to launch in November in regions outside the United States and some other countries. To facilitate users managing multiple wallet addresses, TON Space plans to integrate multi-address support in the future. Additionally, TON will support the transfer and display of NFT collectibles to meet the social needs of Telegram users. Moreover, considering the dimension of information density, Telegram has a higher information density than WeChat, with users experiencing deeper immersion in information on Telegram and a broader density of private domain traffic. This will drive the integration of TON Space with payment and social scenarios within Telegram, achieving more refined and high-density transmission of value, traffic, and information through higher information density.

From the above, we can conclude that the wallet serves as the gateway for traffic into Telegram’s Web3 ecosystem. However, after attracting users, it’s essential to offer various entertainment facilities, which means providing Telegram’s existing Web2 Dapps in a Web3 manner. This led to the creation of Telegram mini apps (tApp Centre) and Telegram Bots.

Telegram mini app（tApp Centre）and Telegram Bot

Telegram Mini Apps are web applications that run within the Telegram Messenger, launched by the TON Foundation to meet users’ needs for gaming, content sharing, and productivity tools. They can be easily accessed from Telegram chats or group conversations. Telegram Mini Apps include three main types: bots, games, and web applications, which are functionally divided into four categories: management, Web3, utilities, and games. Telegram Bots are automated programs that operate through the Telegram chat application, allowing users to access information and market data without leaving the Telegram platform and to interact with smart contracts.

At this point, readers might wonder about the connection between Telegram Mini Apps and Web3. These Telegram Mini Apps can be built on the TON blockchain using the infrastructure provided by TON, and made available to users via Telegram Bots within the Telegram interface. This setup allows app developers not only to use TON’s infrastructure for project development — reducing the complexity and duration of development and obtaining financial support through TON grants — but more importantly, it enables developers to quickly reach Telegram’s extensive user base. Consequently, developers can monetize in various ways within Telegram, such as through in-app purchases, subscription models, or advertising.

The bridge between Telegram Mini Apps and Telegram itself is the Telegram Bot, evident from the “cumulative transaction volume exceeding $190 million by last July, with the highest single-day transaction volume reaching $10 million.” This indicates the popularity of the Telegram Bot field and its substantial real user demand. From the user’s perspective, they can utilize these Bots for operations such as DEX trading, claiming airdrops, or following the transactions of a specific wallet. Through interaction with Telegram Bots, users can easily interface with the entire blockchain on the Telegram platform by paying a certain fee.

Currently, the main functions provided by Telegram Bots include: 1) Trading: direct buying and selling of tokens; 2) Sniping: monitoring token listings and setting up automatic purchases in advance; 3) Copy trading: imitating the trades of other traders; 4) Airdrop farming: automatically executing a series of actions to increase the chances of receiving airdrops; 5) Finding the best liquidity pools for a specific token, among others. According to a Binance research report, Telegram Bots profit by collecting transaction fees and token sale “taxes.” As of last July, Telegram bots had collected over 15,000 ETH (approximately $28.7 million) in revenue.

According to a Binance research report, the daily active users of Telegram Bots peaked in July last year, exceeding 6,000. The most used bots were Maestro (with daily active users ranging between 2,000 to 3,000) and Unibot (approximately 1,700 users).

Certainly, using Telegram Bots also comes with concerns about project security and privacy: 1) As with all Web2 applications, users’ Telegram accounts are at risk of being stolen, and logging into Telegram Bots does not require a password, exposing Telegram Bots to the risk associated with Telegram account password security; 2) Trading through a Bot means the Bot will have access to private keys, posing a risk of private key leakage; 3) Like all crypto projects, interaction between Bots and smart contracts exposes wallets to smart contract risks; 4) Most people are concerned about transferring coins to a bot. Despite the risks associated with Telegram Bots, compared to the current DeFi frontends, Telegram Bots offer a more user-friendly and convenient experience, have real and significant demand, and, backed by Telegram’s 800 million daily active users, fill the Bot sector with imaginative potential. Using Blueprint under the Telegram TACT language also lowers the difficulty for developers to build and maintain Bot projects, leading to a surge in Bot projects. The following section, “Investment Opportunities — Bot,” will attempt to analyze the investment opportunities in the Telegram Bot sector.

TON: The Only Blockchain Supported by Telegram

From its inception, TON has been intricately linked with Telegram, and the higher echelons of Telegram have not been shy about their support for TON. For instance, Telegram’s CEO, Du Rove, publicly stated in a declaration last July that he holds $TON.

(from public social media)

At the TOKEN2049 conference held in Singapore last September, Telegram openly stated that it would fully rely on TON as its blockchain infrastructure. This means that $TON and its Web3 ecosystem will be promoted within Telegram and will enjoy priority access to Telegram’s global advertising platform, Telegram Ads. Telegram aims to foster and promote a TON-centric Web3 ecosystem on its platform, and to develop the Telegram integrated wallet into a unified platform that meets all user needs.

Readers may be confused about why TON is needed when Telegram Bot already provides users with a convenient Web3 experience. The role of the Bot is primarily to direct traffic and link users to Dapps. As a representative of the TON Foundation stated, TON allows developers to create products with real-world demand, which can be deployed on the Telegram platform. TON, as a public chain, not only provides tools and infrastructure for blockchain development but also allows Dapps built on TON to be used within the Telegram interface, empowering Telegram and creating a powerful flywheel effect. In other words, TON can facilitate the use of Dapps. For example, using the TON wallet to open Telegram Mini Apps can enhance user trust. With the introduction of TON Connect, a technology based on modern cryptography, users can log in to services and applications with just one click through the TON wallet, ensuring that their keys never leave their devices and their privacy is not compromised. The use of TON Connect can alleviate concerns about entering private keys when using Telegram Bot, thus promoting the usage of Telegram Bot and Mini Apps. On the other hand, the $TON token provides Telegram with a path to commercialization — due to historical sensitivity, Telegram’s single revenue model, and limited operating funds (raised approximately $1.2 billion from personal funds of the founder and two bond issuances), Telegram is turning to decentralized commercialization avenues. Additionally, the $TON token provides the public with technology to protect their rights and freedoms, adding new dimensions to communication between users based on transactions. For example, in July last year, the TON Foundation announced the introduction of encrypted messaging on the TON chain, using end-to-end encryption to ensure that only the sender and receiver can see the message content, with a transaction fee of 0.006 $TON per message sent. The infrastructure and financial attributes of TON are indispensable components of Telegram’s Web3 vision.

Iron Triangle

As Halil Mirakhme, Chief Operating Officer of @Wallet, pointed out when discussing its competitor Signal, @Wallet’s advantage over Signal lies in having the support of a platform like Telegram, which facilitates social interaction and discussion around cryptocurrencies. The seamless integration of Wallet, Dapps/Bots, and TON forms a complete closed-loop Web3 experience for Telegram users: starting from receiving messages and engaging in discussions in Telegram groups/channels, to conducting token transactions via Telegram Mini Apps and Telegram Bots, and finally participating in TON ecosystem projects through @Wallet and TON Space.

Thus far, we can outline the grand vision of Telegram Web3: Wallet serves as the gateway for Telegram Web2 users to enter the Web3 world, Dapps capture traffic and retain users, Bots bridge Wallet and Dapps to provide users with a simple and convenient operational process, the TON chain provides infrastructure, and the $TON token offers commercialization avenues. Additionally, Dapps developed on TON can empower Telegram, forming a powerful flywheel effect. The organic integration of Wallet, Dapps/Bots, and TON provides users with a simple, convenient, and censorship-resistant Web3 experience, while also creating a platform for developers to rapidly reach a wide range of users through Web3 Mini Dapps. This integration allows Telegram to not only function as a network but also as a decentralized digital kingdom, with its own economy, citizens, digital property rights, currency, free market, communication infrastructure, and many other services.

TON Framework and Technical Development

Understanding TON requires stepping away from the current design framework dominated by ETH-based public chains. TON is a public chain designed from the outset by a team experienced in handling massive platform businesses, such as Russia’s largest social network VK, with the goal of accommodating large-scale applications. As a project contemporaneous with Ethereum, TON even proposed the concept of sharding earlier than Ethereum 2.0 to support more complex operations. The underlying architecture of TON differs significantly from Ethereum, and to a certain extent, this design logic determines whether the public chain can meet its goal of accommodating a large user base. The inability of WhatsApp and WeChat to support simultaneous message synchronization across multiple devices (such as phones and computers) is attributed to architectural design issues.

The core design of the TON blockchain includes “resource payment” and “asynchrony.” “Resource payment” differs from other public chains like Ethereum and Solana in that every smart contract on TON requires a certain amount of $TON tokens to cover fees, and if a smart contract’s $TON token balance is depleted, the contract will eventually be deleted. This design introduces an automatic cleanup mechanism to prevent data inflation on the blockchain. “Asynchrony” refers to the asynchronous nature of calls between smart contracts — when two contracts are involved in a call, the call is not executed immediately but processed on a future block after the transaction concludes. The advantage of this design in TON is higher scalability and flexibility, but it also increases the difficulty and complexity of application development and maintenance, leading to challenges and slow progress in DeFi development on the TON chain.

TON’s architecture is divided into three layers: masterchain, workchain, and shardchain. The masterchain serves as the coordinating hub, while the workchain and shardchain handle actual transactions. Therefore, TON has a main chain, the masterchain, which can accommodate up to 2 to the power of 32 workchains, with each workchain further subdivided into up to 2 to the power of 60 shardchains. TON claims to support millions of transactions per second (TPS) and applied for the Guinness World Record for the “fastest blockchain” in October last year. However, the actual TPS of TON may need to wait until the TON chain ecosystem thrives and substantial traffic runs on the TON chain to be verified.

Smart contract development on TON can be done using three programming languages: Fift, FunC, and Tact. Fift is considered more challenging with lower-level difficulty, and very few developers choose to use Fift. Currently, the most widely used development language is FunC, which is similar to the C programming language. Tact is a newly introduced high-level language on TON, designed to resemble popular programming languages like JavaScript, Python, and Solidity, aiming to lower the development barrier for a broader range of developers.

As this text is not a technical article, the technical details of TACT are not elaborated here. Readers interested in TACT’s technical specifics can refer to “Why TACT is the Next Big Breakthrough for TON”. However, noteworthy aspects of TACT include:

1. Support for Message-Oriented Programming (MOP) principles, simplifying the development process and improving efficiency. It also enables the creation of contracts that interact easily through message passing, simplifying integration and interaction between different contracts.
2. The availability of the Blueprint framework, which provides a comprehensive set of tools for smart contract development, simplifying and streamlining the process of contract development and deployment. With Blueprint, developers can easily manage all stages of the smart contract lifecycle. Other Telegram Bots like the popular Unibot from last year were developed using TACT language and its Blueprint scripts.

Although TACT is still undergoing auditing, its promise of simplified development is expected to play a significant role in the development of the TON ecosystem, with widespread adoption anticipated in the future.

TON Ecosystem and Opportunities

As of the end of September last year, the TON developer community on Telegram consisted of 10,747 members, with 176 active developers on GitHub. Some well-known development teams include TonWhales, Orbs, and TON Tech. To attract more project teams to develop on TON, the TON community not only provides basic tools such as TON SDK, Ton Connect, TACT language, and the Blueprint framework but also offers TON blockchain courses and promotes the TACT language through the TON TACT Challenge. Additionally, events like the Hack-a-TON x DWF x AWS hackathon have been organized, with a prize pool exceeding $415,000 USD.

Projects like TON Bounties have successfully processed over 155 proposals, with 40 new bounty tasks approved in the third quarter of last year. Currently, 25 completed projects have received approximately $53,000 USD in rewards. The TON Grants program has received 103 project applications and approved 10 projects.

In addition to these initiatives, TON has established the $250 million TONcoin.Fund to invest in TON ecosystem projects. Investment areas cover infrastructure, DeFi, NFT, gaming, sociafi, and more.

As of November 11th last year, the TON ecosystem consisted of 551 Dapps, spanning across categories such as wallets, DeFi, NFT, gaming, and socialFi. However, according to an article on Starbase, the TON ecosystem projects actually include many Telegram groups as well. Overall, it appears that the TON ecosystem is still in a very early stage of development.

(From public social media)

The on-chain Total Value Locked (TVL) for TON is $53.43 million USD, with 13 projects listed by DeFiLlama. The projects with the highest TVL are Tonstakers ($105 million USD) and Bemo ($27.33 million USD). It can be observed that the TON ecosystem lacks blockbuster DeFi projects. One reason for this is that existing DeFi projects support only a single stake asset with relatively low yields. For example, the highest TVL project Tonstakers currently only supports staking $TON with an APY of 4.64%.

Another reason for the low TVL on the TON chain is the lack of stablecoins. Currently, besides USDT, other stablecoins on the TON chain, such as oUSDT, oUSDC, jUSDT, and jUSDC, have low liquidity and incur significant slippage during exchanges. Moreover, unlike USDT and USDC, these stablecoins lack real-world asset backing and audits, which greatly reduces users’ enthusiasm for trading across chains to the TON network. With more cross-chain bridges expected to be launched in the future, it is anticipated that stablecoins with liquidity other than USDT will appear on the TON network to promote ecosystem prosperity. Additionally, a native USDT on TON is expected to be launched this year, and TON is currently in negotiations with other stablecoin projects. The introduction of stablecoins is expected to continue stimulating TVL growth on the TON chain.

Currently, the TON chain has only launched an ETH cross-chain bridge, but mature projects in the Ethereum ecosystem have not yet expanded to the TON chain. Projects such as AAVE and Uniswap do not support the TON chain, resulting in a large amount of traffic on Ethereum unable to flow into the TON chain. From various activities launched by the TON Foundation and TON Society, it seems that the official stance on cross-chain and EVM integration is not very proactive. One possible reason is that users’ cross-chain needs can be met through Telegram bots, Mini Apps, official, and third-party cross-chain bridges. Additionally, with the immense traffic on Telegram, it may be more urgent for other public chains to reach TON users through cross-chain bridges rather than TON needing to attract traffic from other chains through these bridges. Therefore, at this stage, TON can collaborate with mainstream DeFi protocols such as AAVE and Uniswap, as well as select suitable projects from numerous cross-chain cases, and strive for better benefits through these partnerships.

However, it is worth noting that due to the different underlying architectures between TON and Ethereum, the atomicity of transactions on Ethereum cannot be achieved on TON. This will to some extent limit the richness of DeFi applications on TON, such as implementing flash loans, which are difficult to achieve on TON. Therefore, we need to pay more attention to DeFi applications and scenarios that are integrated with the Telegram ecosystem.

TON Community Governance

Currently, the TON community has not achieved a fully autonomous state, but this does not mean that community members cannot participate in the development and governance of TON. The official channels and chats provided by TON allow community members to subscribe and communicate. For developers, the official platform also offers comprehensive tutorials and developer documentation to assist in development, along with developer communities and TON Answers to provide support and guidance.

The general governance process of TON is as follows:

1. Firstly, an Author submits a proposal through TON Enhancement Proposal, initiating a pull request to put the proposal under review.
2. Next, an Editor checks the pull request and assigns Reviewers for evaluation.
3. Reviewers share opinions or comments and vote in favor or against the proposal.
4. Once the majority of Reviewers agree on the proposal, it enters a 10-day period of public comment.
5. After the comment period ends, the Editor changes the proposal status from Review to Active or Rejected.

Through this process, community members and core contributors can participate relatively easily in the internal governance of TON. However, considering that in the early stages of public chain development, excessive decentralization of power and governance often leads to inefficiency, the TON community has not yet reached a state of complete autonomy. As TON chain gradually matures, it is expected to move towards a fully autonomous DAO governance model.

TON TVL and Ecosystem

Traditionally, when assessing the prosperity of a blockchain ecosystem, we often use Total Value Locked (TVL) as a key metric — a reflection of the DeFi Lego effect. However, in the crowded space of public chains, we believe that evaluating TON using traditional blockchain valuation methods may not be suitable.The core value of TON lies in its strong integration with Telegram. Therefore, we should evaluate TON from the grand narrative of TON x Telegram, focusing on metrics such as transaction volume and protocol revenue from Dapps.

Telegram, which is evolving rapidly, has attracted a large number of real users and is continuously expanding its functionality and Dapps to retain users. It aims to transition from a communication protocol to a social platform and then to a super app platform. Its open and liberal atmosphere, coupled with a growing array of Dapps and services, is bound to attract more users. Given that Telegram is a crucial space for cryptocurrency, TON, being its sole supported blockchain, is poised to benefit. According to the TON Foundation, they aim to migrate 30% of Telegram’s active users to TON by 2028, which means that by then, 500 million Telegram users will become users of the TON chain. Hence, we believe the primary concern for TON currently is how to attract Telegram users to migrate to TON. In addition to continuously developing various types of Dapps to cater to the traffic brought in by Telegram, integrating games, DeFi, creator economies, encrypted e-commerce, and other aspects into daily life scenarios using TON wallets can increase user frequency and stickiness. Furthermore, TON also needs broader and more active promotion on Telegram. From an investment perspective, the current price of $TON is $3.8 per token, with a market capitalization of $13.1 billion, ranking 13th. TON’s market capitalization is relatively high at present, surpassing other chains such as Apt and Sui. Investors seeking a return of 5–10 times may need to wait for the arrival of a major bull market. Six months ago, TON’s price was $2.48 per token, now it is $3.8. Aptos’ price was $5.2 six months ago, now it is $14.4. Solana was $20 six months ago, now it is $166. Sui was $0.45 six months ago, now it is $1.52. It can be seen that TON’s growth over the past six months has not been significant, but there is still potential for growth.

TON Ecosystem Projects

Tonup

Tonup is a launchpad platform on the TON chain that has received strong support from TONCoin.Fund and the TON Foundation since its inception. It has successfully completed a seed round of financing led by TONCoin Fund, with other investors including Foresight X, Waterdrip Capital, BitFund DAO, and more.

Fragment

Fragment is a non-custodial decentralized NFT trading platform on the TON network. Currently, users can trade Telegram-specific usernames and virtual phone numbers on Fragment, with settlements conducted in TON. Listing NFTs on Fragment incurs no fees, but a 5% platform fee is charged for each auction, where the highest bidder wins. It’s worth noting that Pavel Durov, the founder of Telegram, is also a co-founder of Fragment.

Telegram usernames are similar to decentralized usernames like ENS. As Pavel Durov, the founder of Telegram, has mentioned, this is the first publicly transparent username market established on a social platform. This means that users now have ownership of their usernames for the first time on a Web2 social platform. If Telegram can explore integrating usernames with activities on channels/groups into a points system, such as “participate to earn,” and other features into Web2, it will surely attract more users to purchase and use Telegram usernames. Fragment has introduced virtual phone numbers starting with “+888”, which can be used to register Telegram accounts and bind TON wallets. These virtual phone numbers are defined as NFTs recorded on the TON blockchain, serving the purpose of protecting privacy and showcasing user identity. These virtual phone numbers have speculative and collectible value, with the current floor price being 9 $TON. Additionally, Fragment also integrates Premium features, allowing users to pay for Telegram Premium subscriptions on Fragment or donate $TON to Fragment for the opportunity to promote channels on Telegram.

Bot Track

As mentioned in the section “Telegram Mini Apps (tApp Centre) and Telegram Bots” above, Telegram Bots provide users with easy access to the entire crypto world within the Telegram interface. They fulfill numerous real needs and have been widely integrated into various fields such as trading, DeFi, cross-chain transactions, and airdrops. However, Telegram bots currently operate in a blue ocean market, with many new application scenarios yet to be developed, such as integrating bots with Telegram payments or with Ethsign. It is expected that Telegram Bots will integrate with other narratives and applications, and in the future, they will also transition into Telegram mini apps to provide users with a better Web3 experience.

From the 24-hour trading volume on Dex, Unibot and Banana dominate the majority of the trading volume in the Telegram Bot track, accounting for 50% and 41% respectively. They are currently in the stage of competing for market share.

Additionally, according to research analysis by CertiK, nearly 40% of Telegram Bot projects are suspected to be in a dormant state, potentially facing fraud or the risk of being unable to recover from significant sell-offs. One possible reason for this is that Bot projects directly use TACT language and Blueprint provided by TON for development, making the development process relatively simple and easy to replicate successful projects on the market. However, these projects often lack the ability to continuously attract users after their launch. Therefore, investors should also consider the risks when paying attention to Bot track projects.

LootBot LootBot focuses on automating interaction with airdrops, filtering out the most advantageous airdrop opportunities, while implementing robust security measures to protect users from hacking and fraudulent activities. It currently supports ZkSync, Layerzero, Linea, Base, Taiko, and Polygon chains. The first 15 transactions on Lootbot are free, after which users are encouraged to purchase its Premium version for $30 per month. As of now, Lootbot has received $148,000 in subscription fees. LOOT token holders can choose to burn LOOT to mint xLOOT tokens to earn rewards, with a total of 1.98 million LOOT tokens burned.

WagieBot

WagieBot provides users with the ability to conduct due diligence and interact with any liquidity pool on Ethereum, Binance Smart Chain, and Arbitrum via Telegram and Discord. Users simply need to paste a contract, and WagieBot will automatically retrieve the largest liquidity pool for that token along with all necessary information and complete anti-rug checks. WagieBot’s interaction speed is several times faster than Dex and it also integrates with GMX, allowing users to engage in leverage trading of up to 50x. As of now, the trading volume on WagieBot is $7.17 million USD, with a total of 414 users.

Reference

1. TON发展简史
   https://foresightnews.pro/article/detail/44875
2. TON发展简史图
   https://foresightnews.pro/article/detail/43776
3. TON的技术特点与网络结构、开发语言 https://foresightnews.pro/article/detail/44324
4. OKX Ventures最新研报：TON 生态和投资分析 https://www.techflowpost.com/article/detail_14363.html
5. 为什么TACT是TON的下一个重大突破
   https://blog.ton.org/why-tact-is-ton-s-next-big-breakthrough
6. TON +Telegram的叙事到底有多性感？ https://www.theblockbeats.info/news/45907?search=1
7. TON Space：Telegram未来的加密「微信钱包」 https://www.theblockbeats.info/news/45428
8. 继 Maestrobot 后，Telegram Bot 项目再遭恶意利用：Unibot 攻击事件分析
   https://foresightnews.pro/article/detail/46248
9. TON Developer Report: Q3 2023
   https://blog.ton.org/ton-developer-report-q3-2023
10. TON 链上数据
    https://www.tonstat.com/https://m3talab.io/reports/ton-telegram-open-network
11. TON 代币持仓数据
    https://eagleeye.space/detail/toncoin
12. Telegram group数据
    https://tgstat.com/ratings/chats
13. Telegram mini app与bot 介绍
    https://core.telegram.org/bots/
14. Building a Web3 Ecosystem in Telegram with TONcoin https://blog.ton.org/building-a-web3-ecosystem-in-telegram-with-toncoin
15. 钱包支付简介：使用加密货币购物的革命性技术 https://blog.ton.org/introducing-wallet-pay-revolutionary-technology-for-shopping-with-cryptocurrency
16. 一文了解Unibot（UNIBOT） https://www.gate.io/zh/learn/articles/understanding-unibot-in-one-article/759
17. 解读币安研究院 Telegram Bots 报告：移动端的另一种交易体验 https://www.techflowpost.com/article/detail_12664.html
18. Bot代币DEX交易量
    https://dune.com/wuhuzai/telegram-bots-data-cn
19. Unibot的数据
    https://dune.com/whale_hunter/unibot-revenue
20. Loot数据
    https://dune.com/dknugo/lootbot
21. Wagiebot数据
    https://dune.com/whale_hunter/wagie-bot
22. TON 链上生态报告：趋势与机会，如何在 TON 生态中找到切入口？ https://foresightnews.pro/article/detail/46655
23. Telegram Bot 项目再遭恶意利用：Unibot 攻击事件分析 https://www.tuoluo.cn/article/detail-10110116.html
24. 一文速览 Telegram 上线的用户名拍卖平台 Fragment https://foresightnews.pro/article/detail/17620

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