Original author: Steven, E2M Research
Original consultant: Ton Foundation
This article quotes some research reports on Telegram and TON on the market, as well as some opinions of KOLs. For details, please see the references. On this basis, data supplement and some extended thinking are carried out. It is only for learning and communication, and has no commercial purpose.
Preface
TON has not yet brought into play the characteristics of its own public chain and lacks out-of-the-box projects; for the project owners, it will also be an opportunity to go out of the circle, which has great imagination. If products like TON, FriendTech, Social, or Gamefi, which use the number of users, the number of transactions, and ARPU as core indicators, appear, there may be a new paradigm and a new set of evaluation criteria.
There are many reference indicators for the current development of Web3.0 public chains, such as the number of active wallets, transaction volume, number of developers, TVS, etc., but the most popular one is TVL.
However, TON TVL is only $10.57M, there is basically no TON defi ecosystem, and the current TVL is built on two DEXs.
Data source: https://defillama.com/chain/TON
In comparison, Base, which recently became popular due to Friend Tech, also has $300M+.
Data source: https://defillama.com/chain/Base
The development logic of TON public chain is the Mass Adpotion strategy of turning 30% of Telegram users into Crypto users. In the future, the core focus areas of TON ecosystem should be wallets, social networking, games, NFTs, etc. that are more oriented towards the application layer.
The TON public chain was originally designed with the core goal of "a fast, secure and scalable blockchain that focuses on processing millions of transactions per second."
Whether it is the early Axie Infinity or the recent Friend Tech, everyone knows that it is a Ponzi and will sooner or later have a death spiral. Basically, a project with a peak of 3 months to half a year is already very outstanding. These fields have not yet seen evergreens such as Uniswap (DEX) and Tether (stable currency). Socialfi, NFT, Gamef and other Dapps cannot experience entropy reduction like Defi. TON may have a chance to break through the existing shackles and bring real Mass Adoption to Web3.0 from the perspective of its more "Intent" design concept.
In addition, the tokens currently enable a variety of advertising, mobile phone numbers, domain names, and membership services, so the valuation should also be split up and valued one by one, and the valuation should be conducted after the ecosystem is stable. In terms of analogy valuation, TON cannot be completely analogized to traditional public chains. Later, we can consider comparing TG with Meta and WeChat in terms of active users and market value.
development trend:
Telegram is now somewhat similar to Discord in terms of Mass Adoption - it focuses on a modular approach. Another metaphor is the App Store of the iOS system. You are given an Apple device (Telegram), and then different user groups go to the App Store (Telegram Apps) to choose the Apps you need, such as trading Crypto, downloading Tik Tok, playing games, playing NFT, etc., so as to achieve Mass Adoption across tracks.
TON is a bit like the development of WeChat, and TON Space is WeChat applet + WeChat wallet.
At present, the traffic flow in November is very important: the Gamefi project owner we visited said that part of the traffic flow is through the use of DApps to subsidize TON, and if the data is good, subsidies will continue. Let's see how to promote the Telegram+TON ecosystem in November and how much traffic TON Space can bring.
Some difficulties:
TON’s market value has already reached the top 15 despite its poor ecological situation. Will this have an impact on its future development?
Popular Telegram Bots like Unibot or Gamefi like Tap Fantasy essentially rely more on Telegram Bot functions rather than TON?
TON's ecosystem is poor and it relies heavily on Telegram for traffic. Can it withstand the huge initial expenses?
1. Telegran Background
Telegram is a free cloud-based instant messaging software founded in 2013 by Nikolai and Pavel Durov, founders of VK (one of the mainstream social media in Russia). Although Telegram servers are spread all over the world, the operation center and development team are located in Dubai, UAE. Telegram has a huge and global user base and has grown rapidly in recent years.
Telegram's monthly active users (MAU) are approaching 900 million, with more than 1.3 billion registered users.
Telegram is an important position for Crypto. More than half of the channels and groups with the most subscribers/members are related to Crypto content. Almost all Web 3.0/Crypto projects have Telegram communities to facilitate community communication, project updates, publicity, and other purposes.
2. TON public chain
2.1 TON Foundation Team
TON Foundation is the true son of TG.
TON is currently mainly driven by the TON Foundation. The TON Foundation has a team of more than 40 people, more than half of whom are from Russia, Ukraine and other countries and regions, and most of the employees have work experience in VK and TG.
Andrew Rogozov, the general manager of TON Foundation, is the former CEO of VK.com.
2.2 Development History/Roadmap
The following content comes from the official website: https://ton.org/zh/roadmap (still being updated)
important events:
Rollout Features
2.3 Features of TON public chain technical architecture
Smart contract calls are asynchronous
Unlike public chains such as Ethereum, calls between smart contracts on TON are asynchronous. This design improves scalability because when a smart contract calls a function of another smart contract, the call is not executed immediately and all transactions do not need to be processed in one block. But at the same time, asynchrony also increases the threshold for developers to develop and maintain applications on the TON chain.
Unlimited Sharding
The TON blockchain is designed to be divided into three types of chains: Masterchain, Workingchains and Shardchains.
The main chain contains the working chain, shard information, and the most recent block hashes of the working chain and shard chain.
There are at most 2 ^ 32 workchains, which contain transactions and smart contracts and are identified by an unsigned 32-bit integer workchain_id. Different workchains can have different address formats, different transaction formats, different virtual machines, etc. However, different workchains need to meet the basic interoperability standards of the TON blockchain. TON's design for workchains is similar to Polkadot and Polkadot's parachains, but the number of Polkadot's parachains is limited, and TON can theoretically have more.
For each working chain, it can be divided into 2 ^ 60 shard chains according to demand. The shard chain is only responsible for the state maintenance and conversion of at least one account, and transmits information to and from other shard chains. The shard chain in the TON design is essentially an "account chain", which is a collection of one or more accounts.
Through this design, TON realizes the "infinite sharding paradigm" to meet the goal of millions of TPS in the future.
Theoretically, it will be able to become Layerzero in the future, and other chains can fork chains, even Ethereum and Solana can also be forked.
Distributed Hash Table
The way blockchain network data is stored and accessed affects the data consistency, accessibility, and security of its network. TON uses hash tables for data storage.
First, a hash table is a data structure that enables fast data access by mapping keys to buckets using a hash function. In TON, the hash table is distributed, meaning that data is stored on multiple nodes in the network.
When a data item needs to be stored, TON uses a hash function to determine which node the data item should be stored on.
When data needs to be retrieved, the same hash function is used to quickly find the node where the data is stored, allowing efficient data insertion, deletion, and lookup operations.
Data is encrypted and redundantly stored on multiple nodes. Even if some nodes fail or are attacked, data can still be recovered from other nodes, ensuring data security and persistence. Compared with traditional hash tables, distributed hash tables provide higher performance and reliability in distributed and large-scale environments.
Here is a comparison of TON with Ethereum and Bitcoin networks:
privacy protection
TON Proxy is a network proxy anonymity service used to hide the IP address of TON nodes, similar to I 2 P (Invisible Internet Project), to build a decentralized VPN service, combining TON DNS and TON P2P network to protect user privacy.
The "Secret Chats" feature launched in Telegram uses end-to-end encryption technology to improve the security of message transmission between users. At the end of 2022, Telegram was further updated and launched a blockchain-based anonymous number login function, allowing users to log in without registering with a mobile phone number and only by saving the mnemonic of the TON wallet, thus providing an additional privacy option.
In January 2023, TON further expanded its functionality and released TON Storage. This is a peer-to-peer file sharing system that has some similarities to Dropbox and torrents. The system simplifies the file exchange process and provides encryption protection for files stored on the blockchain. At the same time, in order to ensure the persistent storage of files, node operators who host these files can also receive corresponding incentives.
Native Language
TON uses its own programming language Func, which is similar to C++. It has now launched TACT to reduce the development difficulty by half.
Key points: - Differences from Ethereum: Atomicity and Heterogeneity - eth atomicity Complete Task 1 Then 2.3.4 - ton heterogeneity Simultaneous execution of 1.2.3.4 - In summary, TON is a high-performance public chain that uses its own TVM virtual machine, which is incompatible with EVM. Smart contracts on TON are written in a new language created by itself, FunC, and block proof of stake (BPoS) consensus. Validators who hold and stake TON native cryptocurrency participate in block verification and consensus. - Resource payment: 1. In the TON blockchain, each smart contract needs to pay its own resource costs. This means that each smart contract holds a certain number of TON tokens and uses these tokens to pay for the resources required for its operation, such as computing, storage, and network transmission. 2. This design is different from Ethereum. In Ethereum, users pay transaction fees, while in TON, smart contracts pay fees themselves. This design can avoid users from directly incurring fees, but it also means that smart contracts need to hold enough TON tokens to pay for their operating costs. 3. If a smart contract's TON token balance is exhausted, the contract will eventually be deleted. This is an automatic cleanup mechanism that avoids data bloat on the blockchain. - Asynchronicity: 1. In the TON blockchain, calls between smart contracts are asynchronous, not atomic. This means that when a smart contract calls a method of another smart contract, the call is not executed immediately, but is processed on a future block after the transaction is completed. 2. This design allows for higher scalability because it does not require all transaction processing to be completed in one block. But it also makes it more difficult to maintain consistency and atomicity between transactions. 3. For example, if contract A calls a method of contract B, this call is not executed immediately, but is processed on a future block after contract A's transaction is completed. This means that contract A's transaction can be completed before contract B's call is processed. These two concepts are the core design of the TON blockchain, enabling it to achieve higher scalability and flexibility, but also increasing the complexity of development and maintenance. - Public chain ICP - Internet Computer also has a similar design, with the project paying gas for users and adopting an asynchronous architecture for performance.Its technical characteristics are similar to ICP. It is not a global consensus reached by all nodes like ETH, but a "local consensus" that prioritizes performance and experience with a semi-centralized visual experience. Therefore, whether it is the technical architecture or the user portrait, it is believed that Ton's rise is unlikely to rely on traditional Dex, lending and other Defi suites, and it should be more from payment, Bot, Social, Game and other tracks. - This is actually understandable, but asynchrony will make the development of DeFi on the public chain difficult and slow, which is also the biggest point of contention in the ICP community. After all, when we measure the value of the public chain now, we will use TVL to measure it. A public chain lacks DeFi and TVL in the early stage, so it is destined to have no wealth effect, and it is difficult to attract the attention of the public. This is why most people don’t understand this behemoth with a market value of up to 6 billion US dollars.
2.4 Validator and Staking
As the network continues to grow, new $TON is created as a reward for validators’ work. Approximately 0.6% of the total $TON supply is created each year.
Anyone can become a validator, all they need is a powerful server and a large amount of Toncoin staked.
TON is a public chain based on PoS, so the scale of verification nodes can ensure its decentralized, stable and secure operation. TON currently has 366 verification nodes, with a pledged amount of 530 million TON, accounting for more than 10%.
Data source: https://www.tonstat.com/
There are 205 active ones with an APY of 4.56%.
Data source: https://www.tonstake.com/#/
The conditions for becoming a Validation Node are as follows:
Stake at least 300k TON tokens
Meeting the hardware conditions As for the Slash mechanism, TON is still being optimized. Currently, validators can obtain block rewards and user transaction fees (Gas), but if the validator behaves improperly, some or all of their shares will be cut and an equal amount of TON tokens will be destroyed. The TON ecosystem has nominators, which allow stakers to lend tokens to validators for staking and share 60% of the income. The advantage of this is that it reduces the risk of validators, who only need to provide 1/10 of the original 300,000 tokens to serve as validators. Currently, 30m TON is staked as a provider.
3. YOUR Corner
3.1 Market share
Market capitalization ranking: 10
MC：$ 6, 913, 948, 536
VAT：$10,210,645,108
Circulation: 3, 450, 495, 163
High ranking without sufficient ecology
3.2 Token holdings
Starting in June 2020, all circulating Toncoin tokens (98.55% of the total supply) are open for mining. These tokens are placed in a special Giver smart contract, and anyone can participate in mining - as of June 28, 2022, users are mining about 200,000 TON per day. So what is very different from other projects is that Holders are mainly miners (and who are the miners behind them? There should be many different groups behind the miners, using POW to hide the identity of the real holder).
The initial total amount of TON is 5 billion. In terms of token distribution, the team owns 1.45% of the tokens, and the remaining 98.55% were mined by POW in the early days. At present, the network consensus has shifted from POW to POS. The total amount of TON is inflated at a rate of approximately 0.6% per year to reward POS miners.
Data source: https://www.tonstat.com/
In February 2023, TON VOTE passed a "TON Token Economic Model Optimization Proposal", which proposed a temporary freeze for 48 months of inactive mining wallets that have never been activated and have no outgoing transfers in their history. There are currently 171 inactive mining wallets, which hold a total of more than 1.081 billion TONs, accounting for about 21% of the total TON supply at the time.
The TOP 100 holders account for more than 90% of the total token allocation.
Data source: https://www.coincarp.com/currencies/toncoin/richlist/
3.3 $TON Application Scenarios
TON can be understood as the universal currency of the Telegram ecosystem. Basically all services on Telegram can be paid directly with TON.
The number of weekly transactions remained at around 16k, a slight decrease compared to the previous period; the number of new users per day was 1,404.
Data source: https://www.tonstat.com/
Project smart contract payment
Decentralized service expenditures, e.g. TON proxy, storage
Expenditure on TON/Telegram ecosystem applications, such as traditional NFT, DNS, game props NFT, etc.
TON Ecosystem Defi, for example: lending to earn interest, node staking, validator/nominee staking
Governance
Gas fee
Web2 part, such as TG's value-added membership, mobile phone number, domain name, advertising and other products. And in the future, it can be expanded to more areas, such as a series of paid communities
4. Telegram application ecosystem
Judging from the application ecology of Telegram and TON, Telegram is building the "WeChat" of the encrypted world, and TON exists as the RMB.
The Web 3 part of the TON App ecosystem has expanded to Wallet, Game, Social, NFT, DeFi and other directions. The TON ecosystem is accelerating its development, but currently it is mainly some wallets and DeFi projects:
Data source: https://ton.app/categories
4.1 Telegram Bots and built-in applets
Telegram Bots have nothing to do with TON in essence, but are a combination of Crypto and Telegram. However, Paradigm believes that the Bot track, including the Social and Game tracks, will also have more easy-to-understand products based on the design logic of Intent Centric. At the same time, TON and TG officials will limit the flow of mini-programs or bots that are not developed on TON but released on TG in the future.
TON’s growth in recent months is mainly due to a new wave of narratives brought by Telegram Trading Bots and subsequent Bot tracks. However, at this stage, the user profile of Bot is still aimed at Web3’s Crypto Degen. Alpha Seeker and contract players, who have high user stickiness and high payment rates.
The business logic is a bit like some new public chains generally hype Meme coins first, and then develop serious projects as an early marketing/out-of-circle means.
Among this group of people, the number of active users who have demand for Bot remains at around 6k.
Data source: https://dune.com/whale_hunter/dex-trading-bot-wars
Telegram Bots is a new way of interacting with blockchains. It is implemented by integrating multiple functions on Telegram with the help of Bots modules, allowing users to execute these functions by sending instructions to Bots. Currently, it is mainly related to transactions. Bots projects here generally refer to projects that connect to non-TON chains such as Ethereum.
Bot interaction methods:
App interaction method (the first one is option agreement, the second one is gamefi):
Option Agreement Moon Shark
The first IDO on TON - Gamefi-Tap Fantasy
To put it simply, the current differences between Bots projects and TON App are: 1. Bots have limited response speed, a single interaction method, and poor multi-interaction parallel capabilities; but TON App can better solve this problem. Bots find it difficult to solve payment and deposit and withdrawal problems for users, but TON ecological applications can seamlessly connect to the corresponding infrastructure. 2. Bots will charge a handling fee on DeFi, while TON DeFi applications only have a lower fee. 3. APP has more room for thinking. As summarized in the previous article, both Telegram Bots and projects on TON can better face users, but the interaction form of Telegram Bots is more like a monotonous proxy page, while the project on TON is an APP with more interactive functions and stronger composability, and projects on the APP Center can be connected by @Wallet (a collection of multiple wallets on TON and Fiat-to-Crypto), so the depth of TON and Telegram Bots projects is very different.
The development of the Bots project actually provides TON with a larger narrative space, that is, while increasing the traffic around Telegram, it can also seek to convert existing crypto users. Therefore, in the future, we are not sure whether these non-TON chain Bots are at risk of being blocked, but the TON Foundation is fully motivated to extend an olive branch to good Bots projects and try to convert them to TON.
4.2 Wallet
There are currently many To C wallet projects, but the advantage is that they are all integrated with TONSpace in terms of usage. In the future, there is a possibility that other leading wallet projects such as Metamask will join the market.
Telegram Wallet (@Wallet)
Telegram Wallet is a centralized custodial wallet native to Telegram, where users can currently exchange TON, BTC, and USDT. Through the attachment menu bar of the dialog box, users can send and receive these cryptocurrencies with contacts.
@Wallet supports the remittance of legal tender through bank cards or P2P markets. Users can choose the type of payment currency, and it also supports depositing Cryptocurrencies from other wallets. As of June this year, Telegram Wallet has more than 2.5 million registered users, and the number of users is currently growing rapidly.
TON Space
Ton’s official wallet has actually been online for a year, but it was previously a “custodial” model, and this time Ton Space has become self-custodial. In other words, the built-in wallet has only become more decentralized, rather than a process from scratch as many people believe.
TONSpace is a non-custodial wallet embedded in @Wallet. In Tonspace, you can use mnemonics to import existing TON blockchain wallets or create new TON blockchain wallets through mnemonics. Users can also save corresponding private keys using Telegram accounts and emails. Currently, in addition to on-chain token transfers, TONSpace also supports NFT-related operations.
In the future, users will be able to directly use some TON on-chain facilities and applications through TONSpace, such as interacting with DeFi. The Beta version of this product was first announced on Token 2049, and the official mainnet version will be launched in November this year.
Currently, Telegram users can access TON Space through Wallet in the settings interface.
According to the team, all TON Space users can seamlessly connect their Telegram accounts to various TON-based Web3 applications. TON Space will act as a blockchain account and fully support the TON ecosystem including Toncoin, Jettons and Collectibles. Currently, users can connect to TON Space directly from TON-based dApps.
TON Space will be enabled by default for all users, and users can set up new TON wallets or import existing accounts from Tonkeeper, Tonhub, or any other non-custodial wallet. TON Space also provides users with an account recovery option that allows users to regain access to TON Space using email and Telegram accounts.
According to the team, the official version of TON Space is expected to be launched in November in regions other than the United States, and will support staking and exchange in applications in the TON ecosystem. In the future, it is planned to support the integration of multiple addresses into TON Space so that users can manage multiple accounts at the same time; in addition, TON is also exploring the transfer of collectibles directly to contacts via Telegram usernames to provide a user-friendly and smooth experience.
TON Space accounts provide self-custody services, and third parties cannot access users' assets, which can ensure a certain degree of security. After TON Space goes online, it is built into the Wallet. The built-in non-custodial wallet does not need to introduce a third-party payment settlement platform. While avoiding the risk of jumping to other platforms for transactions, it also enhances the crypto-financial attributes of the Telegram platform itself.
Tonkeeper
The TON blockchain wallet that currently supports the largest number of platforms is Tonkeeper, which supports web and mobile terminals. Users can also view NFTs on the TON chain on the mobile terminal. It is worth noting that TON's wallet is a smart contract wallet, which not only enables more sharding of the TON network, but also provides the wallet with the possibility of realizing more complex applications.
Official website: https://tonkeeper.com/
Micropayments
WeChat red envelopes and WeChat transfers refer to the concept of Lightning Network.
Source: https://ton.org/zh/roadmap?filterBy=ton_payment
Regarding small amount payment, I attended TON offline event on October 16. When we first entered, the host asked us to scan the code to receive the red envelope. Most people were annoyed because they gave 0.0001 TON, but they ignored the fact that TON payment can scan the code to transfer money just like WeChat and Alipay.
The video also shows how to complete a 10 u payment very quickly in the chat box between friends, just like WeChat.
4.3 Defi
In fact, if you think about it from another angle, TON does not need too fancy Defi products. As long as it can transfer money, buy coins, and do appropriate mining and financial management, it will be fine, because it still hopes to create a self-circulating ecosystem.
Due to the particularity of the technology, the development of Defi on Ton completely needs to be driven by the narrative of TON+Telegram. It is only possible to drive it if the liquidity of TON is large enough.
Defi projects currently seem to be homogeneous projects, imitations of traditional projects such as Uniswap and Lido. If LayerZero or CCIP like Chainlink can do cross-chain well, then these mainstream Defi imitations will not be competitive enough.
TON TVL is only $10.57 M, compared to Base which has recently become popular due to Friend Tech and has $350 M+.
Data source: https://defillama.com/chain/TON
Data source: https://defillama.com/chain/TON
4.4 TON Domain Name
Exactly the same as ENS.
.ton Domains Are NFTs
The domain area of TON DNS is called ".ton". Users will register their own domain names like this: "alice.ton", ".ton" domain names are all NFTs.
This means that once you acquire a domain, you can store, give away, or sell it — just like you would a regular NFT.
Domain names will be stored in the wallet and can also be sold on NFT market places such as Getgems or Disintar.
Diagram: Domain names for sale on the NFT marketplace Getgems.
.ton Domain Name Rules
A .ton domain name must be at least 4 characters and no more than 126 characters. Domain names with less than 4 characters cannot be registered to avoid confusion with well-known Internet domain names such as "com", "org", "gov", etc. Domain names must contain English letters, numbers, and hyphens. Once a year, a domain owner must send 0.015 TON to the domain's smart contract to extend the domain for another year. If the owner fails to extend their domain, it will be auctioned off. This is to prevent the domain owner from losing the domain forever if they lose access.
Auction Rules
For domains without an owner, the auction lasts only one hour. However, for expired domains, the auction lasts for one week.
All users can bid in Toncoin to win a domain name.
If a bid is made with less than one hour left in the auction, the auction will be extended by one hour to allow other users to make counter-offers.
Each new bid must be at least 5% higher than the previous bid.
After the auction ends, the highest bidder will receive the domain name.
Data shows that the number of DNS sold is not as much as expected, mainly because the average price of one DNS is more than $300.
Data source: https://www.tonstat.com/
4.5 Others
Gamefi
Gamefi may be a way to attract users to the early TON ecosystem. In addition to the traditional P2E game tokens, players will also receive TON token subsidies. In addition, the first LaunchPad project was also a Gamefi project. The project promoted a TON version of the game and issued $200,000 worth of game tokens, which were sold out within 5 minutes.
storage
There is not enough demand for it yet.
Source: https://ton.org/zh/roadmap?filterBy=ton_storage
5. Risks
There are basically some case references for the current problems of TON, but no effective solutions have emerged.
It is necessary to create a new paradigm, a public chain that is not centered on TVL:
The token has a high volatility risk: the token market value has already reached the top 15 before the ecosystem explodes. The main holders of the token are miners. Like Filcoin tokens, it is difficult to predict the volatility of direct investment in tokens.
Compliance and regulatory risks: Telegram is a bit too free. If it wants to be popular in some countries such as the United States, it may need to enforce KYC/real-name authentication.
The drainage effect in November has not yet been determined
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