The Decentralized Finance (DeFi) Environment on the TON Blockchain

While the concept of cryptocurrencies has become commonplace, terms like “DeFi” remain enigmatic for many individuals. The process of storing and transferring funds may seem straightforward, but the notions of “DEX,” “staking,” “tokens,” and similar terms can raise fundamental questions. What do they entail, and why do they hold significance? More importantly, is it worthwhile to understand these concepts for individuals not involved in trading? Can they yield any tangible advantages?

In actuality, comprehending these concepts can prove immensely beneficial. Consider staking, for example, where one can generate profits from their crypto savings rather than letting them remain idle. This understanding holds practical importance. Therefore, exploring the intricate world of DeFi, particularly through specific examples within the TON blockchain ecosystem, can be highly advantageous.

Understanding DeFi and DEX

Let’s initiate with the fundamentals (you may skip this section if you are already well-versed). “DeFi” stands for “decentralized finance.” What exactly does “decentralized finance” signify, and how does it contribute to the financial landscape?

To comprehend its significance, let’s reflect on the traditional framework of “centralized” finance. When depositing money in a bank, individuals essentially entrust their funds to a third-party entity. Although banks strive to validate this trust, they remain susceptible to various risks, such as financial collapse, sanctions, frozen accounts due to suspicion, or sudden deductions outlined in the fine print buried deep within agreements. Consequently, clients may find themselves abruptly deprived of access to their funds due to decisions made by external parties.

Fundamentally, cryptocurrencies aim to ensure that users have complete ownership of their assets. Blockchains strive for decentralization, negating the capability of any central authority to arbitrarily seize assets without explicit consent. If one possesses Bitcoin in their crypto wallet, not even Satoshi Nakamoto can deprive them of it. However, it’s crucial to acknowledge that certain risks, like the sudden depreciation of Bitcoin, operate within a different realm.

Although the original idea behind cryptocurrencies was decentralization, the initial tools used to interact with them were centralized. For example, cryptocurrency exchanges existed with certain “key individuals” having control over the funds. The crash of the prominent FTX exchange in 2022 revealed the illicit manipulation of clients’ funds by the people managing it. Consequently, the risk of placing trust in the wrong entities resurfaces when funds are stored in an unreliable crypto wallet or a centralized exchange.

This is where the development of DeFi becomes advantageous, introducing decentralized tools that aim to minimize the human element. In this scenario, the situation is controlled not by arbitrary human decisions, but by smart contracts, special programs launched on the blockchain. When users have access to the code of a specific smart contract, they can independently verify how it functions and ensure that their funds remain secure during their interactions with the code.

This is where DEX (decentralized exchange) comes into the picture — these are decentralized exchanges. If a user on a DEX wishes to exchange one token for another, they initiate the transfer of the first token, and the exchange’s smart contract automatically sends them the second token at the prevailing rate while retaining a small commission.

DEX is just one example of DeFi; smart contracts find application in various other cryptocurrency operations, such as staking, the sale of NFTs, or providing lending services.

DeFi on TON blockchain

Currently, the TON blockchain is in existence, originally stemming from Telegram but now forging its own path. At its core lies its cryptocurrency, Toncoin, which can be stored in a wallet such as Tonkeeper and transferred to other users. However, it’s essential to explore the broader realm of possibilities and the emergence of DeFi tools, and discern their relevance for the average user.

Tokens

It’s crucial to note that Toncoin serves as the primary cryptocurrency of the TON blockchain, but it isn’t the sole one. This blockchain facilitates the establishment of new currency tokens, referred to as “Jettons.” Technically, anyone can create their own currency within TON using the minter.ton.org service. Nevertheless, unless the token is linked to a well-established crypto project, supported by a capable team, and offers tangible benefits to users, its potential for substantial value remains questionable.

DEX

Within the TON ecosystem, various DEX exchanges operate, including DeDust.io and Ston.fi, enabling the exchange of different TON tokens. Additionally, a bridge between TON and Ethereum facilitates exchanges outside the TON blockchain. It’s imperative for the layperson to comprehend that DEX not only facilitates asset swaps but also offers opportunities for generating income by investing funds.

Staking

Liquidity pools aren’t the exclusive means to leverage cryptocurrency. Staking, as mentioned earlier, also serves this purpose. From a user’s standpoint, the concept is simple: you deposit your funds and earn interest. However, specific conditions, such as the minimum deposit amount, may apply. TON offers multiple staking implementations, with TON Whales permitting deposits from 50 Toncoins, whereas TON Validators require a minimum of 10,000, making it inaccessible to many.

Telegram Bots

One intriguing characteristic of the TON blockchain stems from its historical association with the Telegram platform, resulting in the proliferation of various Telegram bots serving different purposes. Some of these bots are integral to key projects, such as the development of wallets. While TON provides wallets in conventional formats like mobile applications and browser extensions, the @wallet bot within the Telegram interface enables users to securely store their funds and conveniently conduct transfers without leaving the familiar Telegram environment.

Additionally, certain bots function as auxiliary tools, facilitating specific tasks and providing users with valuable insights. For instance, the @FCKAnalyticsBot bot is designed to aid users in monitoring the price fluctuations of diverse tokens on the TON blockchain and allows them to subscribe to the detailed transaction history of any specific token.

Interestingly, during this summer, the success of Unibot triggered a surge in the popularity of Telegram bots not only within the TON blockchain but across various other blockchain ecosystems. This phenomenon gained enough traction that even Binance conducted a small-scale study to comprehend its implications, underscoring TON’s early recognition of the significance of integrating such bot functionalities.

GameFi

While the prevailing notion might suggest that the primary focus of crypto projects revolves solely around financial transactions, there is an increasing acknowledgment of the potential for these projects to cater to broader human interests. One such example is the JetTon project, offering a diverse array of games, ranging from traditional poker to the classic “minesweeper.” Leveraging the distinct features of TON, the JetTon project seamlessly integrates these gaming experiences into the Telegram platform via the @jetton Telegram bot, allowing users to engage with these games without leaving the Telegram ecosystem they are already familiar with.

Furthermore, the JetTon project introduces its own designated token, JETTON, which serves as an in-game currency, facilitating in-game transactions and betting activities. Even for users less inclined towards gaming, the JETTON token holds utility within the broader TON ecosystem, enabling users to invest in it or stay updated with related events through the @FCKAnalyticsBot.

The Future

Despite its relative youth, the TON ecosystem continues to exhibit robust development and innovation. Notably, the absence of stablecoins native to the TON blockchain has prompted initiatives to rectify this gap. As a result, several ongoing projects, including the “Telegram Banking” @tonbanking, are actively exploring innovative concepts that merge staking functionalities with a comprehensive suite of financial operations. Through TONBanking, users can deposit their Toncoins and receive TONB tokens in return, effectively creating a secure reserve of “frozen” Toncoins for transactional purposes, while the staked TONB tokens generate additional income for the users.

One striking aspect of the TONBanking project is its emphasis on facilitating seamless transactions for merchants within the Telegram environment, leveraging the widespread familiarity and convenience of the messenger platform among its users. Additionally, the absence of any commission charges further enhances its appeal to merchants seeking efficient and cost-effective transaction solutions. Despite TON’s evolving independence from its initial association with Telegram, the synergy between these two projects remains evident, underscoring the potential for further collaboration and integration within this dynamic ecosystem. For those keen on keeping abreast of the latest developments, participating in various TON communities, including regional ones like TON Dubai, offers valuable opportunities to engage, learn, and potentially contribute to the ongoing growth of the TON network.