1. Project Background

Basic Information

Name: TON( The Open Network )

Founders: Pavel Durov, Nikolai Durov

Operation Team: TON Foundation

TON (The Open Network) is a decentralized first-layer public blockchain designed for billions of users, featuring scalability and sharding capabilities, aimed at addressing issues such as high transaction fees, slow transaction speeds, inter-chain communication, and scalability present in blockchains. Currently, the main operating team of TON is the TON Foundation, a non-profit organization with the goal of enabling 500 million users to own their digital identities, data, and assets by 2028. Although TON is currently developing vigorously, its development history has been quite tumultuous.

A bumpy development process

● In 2017, the project was launched: Telegram founders Pavel Durov and Nikolai Durov began developing a blockchain project called Telegram Open Network (TON), with plans to release its native cryptocurrency Gram.

● In 2018, the Initial Coin Offering (ICO): Telegram raised approximately $1.7 billion through its ICO, becoming one of the largest token offerings at the time, with investors including multiple large venture capital firms and individual investors. The ICO also attracted the attention of the U.S. Securities and Exchange Commission (SEC).

● In 2019, development progress: The TON blockchain introduced sharding technology to improve scalability and processing speed, and launched a testnet for developers to conduct testing at the same time.

● In 2020, regulatory issues and project turning points: Telegram announced its withdrawal from the TON project, and the development work was handed over to an independent open-source developer community. The project was renamed "The Open Network" and the token name was changed to Toncoin. Funds raised in the ICO were refunded.

● In 2021, community takeover and development: The TON Foundation, founded by Anatoliy Makosov and Kirill Emelianenko, took over the project and continued to promote the development and advancement of TON.

● In 2023, returning to Telegram: Telegram officially announced that the TON blockchain will be its preferred Web3 infrastructure and plans to integrate it into the user interface of the Telegram application; Telegram released its IPO plan.

● In 2024, the expansion of the ecosystem: The application ecosystem of the TON blockchain continues to expand, covering multiple areas such as finance, storage, payment, and domain names. At the same time, projects such as PunkCity, PUNK, and HyperGPT within the TON ecosystem have begun to attract widespread market attention. In February of the same year, Telegram announced that it would exclusively use the TON blockchain and Toncoin for all transactions and payment activities with channel owners.

Since its establishment, TON has gone through a huge circle to become wildly popular, but it has steadily progressed, evolving from initial storytelling to tangible project implementation, demonstrating the project's strong vitality.

Core Narrative for Users

In the development process of TON, the shadow of Telegram has always been present. While most public chains promote their innovative technologies, the TON chain relies on Telegram's 900 million monthly active users, emphasizing user demand and convenience.

At the same time, Telegram is no longer content to be just a social messaging platform. By continuously enriching its product line and connecting payments with daily life, Telegram is attempting to transform into a comprehensive platform with the potential of powerful Bots. This strategic shift not only showcases Telegram's ambitions but also hints at the limitless possibilities of the TON public chain in the future.

Telegram currently has over 1.3 billion registered users and 900 million monthly active users. Freedom of speech and privacy protection have been the mission of Telegram since its inception, and all of this has made Telegram a hub for cryptocurrency—almost all Web 3.0 projects have Telegram communities for project promotion, message announcements, and interaction with the community. The Web3 environment of Telegram provides tremendous support for the TON blockchain ecosystem, offering community foundations for projects from incubation to ICO.

Increasing market recognition

As of the time of writing, the market capitalization of the TON chain has reached $18.759 billion, making it the ninth largest cryptocurrency. At the same time, the TON chain's TVL has seen rapid growth since April and currently stands at 605.72m USDT, ranking 15th among public chains. Clearly, while the growth rate of TON chain's TVL is fast, it has not yet kept pace with its market capitalization, leaving significant room for improvement.

2. Financing Information

● In 2018, the first ICO raised 1.7 billion USD, and part of the funds was returned due to a lawsuit from the SEC.

● In April 2022, Huobi Incubator, KuCoin Ventures, and MEXC Pioneer Fund jointly invested $250 million to establish the TON Foundation, focusing on supporting DEX and NFT projects on the TON chain.

● In October 2023, MEXC Ventures provided tens of millions of dollars in investment aimed at promoting the adoption of the Web3 ecosystem on Telegram.

● In November 2023, Animoca Brands invested in funding, research, and analysis platforms to support third-party mini-programs and game projects within the TON ecosystem, while Animoca Brands became the largest validator.

Telegram initially focused on protecting user privacy and did not have obvious revenue channels, raising hundreds of millions of dollars through bond issuance to maintain daily operations. Starting in 2022, Telegram began to explore revenue models and recently announced that it is close to becoming profitable. In 2023, Telegram founder Pavel Durov proposed a plan to conduct an initial public offering (IPO) within the next two years, with the company's valuation currently exceeding $30 billion, and it may choose to list in the United States.

Both TON and Telegram are currently in a thriving stage, and investing in the TON ecosystem is equivalent to recognizing the immense potential of the Web2 social platform Telegram transforming into a comprehensive Web3 platform.

3. Technical Features

Programming Language

TON chain smart contract development does not use popular smart contract languages like Solidity, Rust, or Vyper, but instead features three programming languages: Fift, FunC, and Tact. Fift is oriented towards low-level development, focusing on runtime efficiency and has a steep learning curve; Tact is a new high-level language introduced by TON, with syntax similar to Typescript, aimed at reducing development difficulty; FunC is akin to the C language and is currently the preferred choice for development. Given the efficiency of Tact development, mainstream developers may shift towards using Tact in the future.

Cutting-edge technology

● Asynchronous Calls for Smart Contracts: Unlike public chains such as Ethereum, TON's smart contract calls adopt an asynchronous model, which enhances the system's scalability. When a smart contract calls a function of another contract, the call is not executed immediately, and it is not necessary to complete all transaction processing within a single block. However, this asynchronous calling mechanism also increases the complexity of developing and maintaining applications, resulting in higher technical barriers for developers working on the TON chain.

● Infinite Sharding: The TON blockchain is designed to be divided into three types of chains: the main chain (Masterchain), working chains (Workingchains(, and shard chains )Shardchains(.

The main chain is the core of the entire network, responsible for storing the metadata and consensus mechanism of the whole network. It records the states of all working chains and shard chains, ensuring consistency and security across the network; working chains are independent blockchains responsible for processing specific types of transactions and smart contracts. Each working chain can have its own rules and characteristics to meet different application needs; shard chains are sub-chains of working chains, used to further split the load of working chains, enhancing processing capacity and scalability. Each working chain can contain multiple shard chains, with shard chains independently processing part of the transactions, thus achieving efficient parallel processing.

● Privacy Protection: The TON chain uses TON Proxy to hide the IP addresses of TON nodes, building a decentralized VPN service that, combined with TON DNS and the TON P2P network, protects user privacy.

![The elephant in the room: Exploring the development context and future potential of the TON ecosystem])https://img-cdn.gateio.im/webp-social/moments-b5f1c833f8619c093c3b2081d29de0d1.webp###

(# Relative Advantage

Although asynchronous calls of smart contracts and sharding technology have been applied in projects like Ethereum 2.0, Polkadot, and NEAR Protocol, TON integrates multiple technologies and surpasses Ethereum and Solana in several metrics such as transaction confirmation time (Time-to-finality).

![The Elephant in the Room: Exploring the Development Context and Future Potential of the TON Ecosystem])https://img-cdn.gateio.im/webp-social/moments-de69f5b8a78f194a09c829aec92f17da.webp###

4. Market Analysis

(# Token Economics

● Token Function: The positioning of $Toncoin is similar to that of the native token on Telegram, which can be used on Telegram to pay for Telegram Premium membership fees and purchase other virtual products at a more favorable discount. On the TON blockchain, $Toncoin can be used for transaction fee payments, staking, cross-chain transactions, decentralized data storage, proxy services, etc.

● Token Supply: The maximum supply of $Toncoin is 5 billion coins. As of June 28, 2022, all $Toncoin have been mined, marking the complete transition of TON from a Proof of Work (PoW) model to a Proof of Stake (PoS) model, with an annual token inflation of 0.6% (approximately 3 million coins) allocated to reward validators who maintain network security.

● Token Allocation: Initially, 5 billion $Toncoin tokens were allocated to the team (1.45%) and miners obtained 98.55% through mining. In February 2023, TON initiated a community proposal to freeze 171 inactive early wallets for 48 months, totaling 1.08B $Toncoin (approximately 21% of the total supply). This move reflects the TON community's consistent optimism regarding the development of the TON blockchain.

![The elephant in the room, exploring the development context and future potential of the TON ecosystem])https://img-cdn.gateio.im/webp-social/moments-baccfa843b6c630ab187d71f59a8001e.webp###

(# Secondary Market Analysis

● Market Cap: As of June 3, 2024, $Toncoin has a market cap of $18.759 billion, ranked No. 9, with a fully diluted market cap of $39.382 billion, circulating supply of 2.432 billion coins, and a total supply of 5.107 billion coins.

● Chip Distribution: As of June 3, 2024, based on Coinmarketcap data analysis, 85.45% of holders own $0-$1k $Toncoin, 14.16% of holders own $1k-$100k $Toncoin, and 0.38% of holders own over $100k $Toncoin.

According to the analysis of whale holdings, whales hold 68.68% of $TON, while retail investors hold 31.32% of $TON.

According to the holding time analysis, 29.20% of holders have held $Toncoin for more than a year, 16.7% of traders have held $Toncoin for no more than a month, and the proportion of diamond hands is relatively high, indicating that the public is very optimistic about the prospects of TON.

According to Etherscan data, the TOP 10 addresses hold 29.99% of $Toncoin tokens, with a relatively loose distribution of chips and a good market condition.

● Trend: In the past year, the price of $Toncoin has risen from 12.4071￥ to 56.54￥, an increase of over 400%, reflecting the strong market expectations and wealth effect of the TON blockchain.

![The elephant in the room, exploring the development context and future potential of the TON ecosystem])https://img-cdn.gateio.im/webp-social/moments-4719a4bddf0dc9b33230c8abbe33b8ad.webp###

( Five, Ecological Construction

The TON ecosystem currently has over 500 Dapps and numerous Telegram Bots, covering major fields such as infrastructure, development tools, DeFi, GameFi, NFT, SocialFi, inscriptions, and almost all popular directions. The vertical segmentation includes Launchpad, wallets, cross-chain bridges, staking and lending, DEX, various blockchain games, collectibles, and more.

![The elephant in the room, exploring the development context and future potential of the TON ecosystem])https://img-cdn.gateio.im/webp-social/moments-83cb100b53b3cc3c084c797b5707cc3f.webp###

Eco Assistant Telegram Bot

The Telegram Bot is an automated bot that runs on Telegram, which can achieve twice the results with half the effort in various aspects such as community building, asset management, information aggregation, and project promotion.

● For ordinary users,