Introduction

The Open Network (TON) is a decentralized layer 1 network built by TON foundation for a variety of financial and consumer applications. Embedded with smart contracts, TON supports both fungible and nonfungible tokens, as well as complex applications running on its network.

TON was born as a Proof of Work (PoW) blockchain and later switched to Proof of Stake (PoS) consensus, which, as a result, makes it focus on scalability and flexibility for diverse end users. The PoS design facilitates the onboarding of millions of new users without suffering network overload or significant efficiency loss.

Moreover, TON is developed with sharding technology, which will also be implemented in ETH 2.0 upgrade. Compared with linear computation in most existing blockchains, sharding enables parallel workloads, thus improving blockchain scalability. In the TON network, the workchains serve as multiple shards to boost network efficiency.

The TON Virtual Machine (TVM) in the TON network plays a similar role to the EVM on Ethereum and EVM networks. Acting akin to a vending machine, the TVM reacts to external variables and modifies the on-chain state accordingly. The TVM empowers developers to effortlessly construct a variety of programs and applications that execute automatically, encompassing tasks such as token transfers, NFT minting, and loan repayments within the network.

The above features make TON one of the high-performance blockchains. In fact, in comparison with Ethereum and Solana, TON stands out as one of the few truly scalable blockchain projects, which are able to handle millions, and potentially tens of millions, of true Turing-complete smart contract transactions per second.

Source: https://ton.org/en/analysis

TON Metrics

Unlike Ethereum, the TON network is still in its early days, but it has demonstrated the growth potential in the past few years.

In the three years of 2019-2022, accounts on TON increased from 20k to 1.5m. With the catalyst of new space wallet integration and notable partnerships, TON experienced a significant surge in account amount. To date, there are over 15m accounts created on the network. Similar growth is also witnessed in onchain-activated wallets.

Source: https://www.tonstat.com/

Transaction and storage fees are also regarded as one of the most important metrics to evaluate network engagement. In general, fees on TON are in a steady uptrend. But robust growth was ignited in March 2024, due to the great price performance of $TON, as well as more milestones achieved. Significantly, as more users flood in, weekly fees hit a new record of $1.8m in early April 2024.

Source: https://tokenterminal.com/terminal/projects/the-open-network

The liquid staking market on TON is also experiencing a fast growth. There are five major liquid staking protocols on the TON network, such as Tonstakers, Bemo, Hipo, Stakee and Whales. Among them, Tonstakers has a lion's share of over 60%. Since mid 2023, over 47m $TON in total has been staked to 319 validators across 30 countries, making TON one of the most decentralized networks in the world.

Source: https://www.tonstat.com/

TON’s Advantages

TON's success achieved so far is not a coincidence. A few key advantages pave the way for TON's growth hack. Firstly, TON has technical advances compared with other legacy layer 1s. The PoS consensus makes TON more flexible and environmentally friendly when it gets adopted. Both sharding and TVM promise high efficiency and usability of the network, thus making user-blockchain interaction seamless.

Secondly, TON is maintained by a group of devoted pioneers and developers. According to Electric capital's report, TON has seen explosive developer growth over the last few years, with monthly active developers increasing by more than 1000%.

Source: https://www.developerreport.com/ecosystems/ton

Most importantly, TON's integration with Telegram is a powerful combination. Telegram becomes the gateway for massive user onboarding on the TON network. Given Telegram has more than 900 million monthly active users, even if only 10% of Telegram users are onboarded on TON, it will make TON one of the most popular blockchains in the world. As more in-depth integrations are accomplished, it's not unrealistic that we can expect the next million of adoptions on the TON network.

Recent Milestones

Space Wallet

The recent milestones in 2023-2024 are vital for the acceleration of TON adoption. The Telegram space wallet is one of the historical moments for TON users, where users can easily and frictionlessly access the TON network on any Telegram client.

Source: https://finance.yahoo.com/news/introducing-ton-space-self-custody-171553245.html

Advertisement Revenue-Sharing Program

Another decisive moment for TON is the advertisement revenue-sharing program for channel owners. To put simply, Telegram plans to allow users to buy advertisements using the $TON token, in order to implement a revenue-sharing initiative that will compensate channel owners. It is the first time that channel owners can benefit directly from the prosperity of the Telegram ecosystem with the help of Web3 technology.

Source: https://t.me/durov/247

Native $USDT Issuance

The latest milestone for TON is the partnership with Tether to issue $USDT natively on the TON network. In fact, Tether (USDT) has already issued $60m worth of $USDT on TON since integrating with the blockchain on April 19. This development places TON as the 11th-largest blockchain for Tether out of 16 supported platforms. As we know, stablecoin is one of the key infras to blockchain networks and now TON users can natively use $USDT as value transfer media. The onboarding of $USDT also makes it possible for various network use cases, such as onchain payments, value storage and more sophisticated financial legos etc.

Source: https://tether.to/en/transparency/?tab=usdt

Without a doubt, these milestones have significantly contributed to the expansion of the TON network during 2023-2024, marking a period of exponential growth within the TON ecosystem.

Notable Projects

Unlike other layer 1 blockchains, TON is relatively less financialized. According to Defillama, total value locked on TON is only $160m. However, some interesting projects and applications emerge in the TON ecosystem.

Source: https://defillama.com/chain/TON

Notcoin

Notcoin is a new phenomenon in the play-to-earn space on TON. Till now, Notcoin has attracted 35M+ people and 53782 squads to mine Notcoin or become voucher holders with over 8887b total taps in the app. Basically, Notcoin is a mini-app within Telegram for crypto mining. The major allure of Notcoin is to let users "mine" or earn cryptocurrency in a straightforward, understandable and cost-free method. In fact, anyone can play the Notcoin game in a minute without any complex knowledge about crypto.

Source: https://t.me/notcoin_bot

Though Notcoin is still not on the TON network and the in-game coin lacks real value, Notcoin demonstrates how popular a crypto project can be on TON and redefines how the mass can interact with crypto projects.

Fragment

Fragment is a decentralized Telegram domain and advertisement service platform built on the TON network. Fragment allows users to trade usernames and numbers in the Telegram ecosystem with exposure to over 900 million users. Users can secure their name with blockchain technology and assign it as a link to their personal account, channel, or group. Fragment also provides services for Telegram premium and advertisement. For example, advertisers can seed their campaigns using $TON and content creators can harvest $TON for their contribution. The advertisement revenue sharing mechanism and integration of $TON drives adoption and adds a strong utility to the $TON token and the whole ecosystem.

Source: https://fragment.com/

Universal Phone

The Universal Phone plan is powered by the TON blockchain and aims to bridge the digital divide, championing a digital economy where access and opportunity are universal rights. Universal Phone shifts the legacy digital economy, but empowers users to own their data and earn from it.

The Universal Phone did well in their first preorder program. 12,000 founding series phones were sold just three days after the official announcement. Given the great success of the Solana Saga phone project, it's reasonable to expect what Universal Phone will bring to the TON ecosystem.

Source: https://twitter.com/oysterecosystem

Challenges and Opportunities

The past two years have witnessed the rapid growth of the TON ecosystem and TON has successfully onboarded over 3m onchain activated users to the blockchain space. However, several challenges still remain unsolved and hinder the TON’s adoption.

Firstly, there is a lack of blockchain infrastructure and developer toolkits. People cannot swap tokens, make a loan or sign an onchain contract as easily as its Web2 peers on the TON network. As TON uses its own coding language, it's not easy for outside developers to build applications from the ground.

Fiat onramp and offramp is another issue with Telegram user conversion to TON users. People have the cold start problem as they don’t have the crypto in their wallets to carry out transactions, while when they want to cash out their crypto assets, they don't have reliable offramp channels either. Besides, regulatory and compliance issues, as well as security concerns are not addressed. New users are heavily exposed to regulatory and security risks in the dark forest of blockchain.

But as the saying goes, one coin has two sides. The TON network also faces unprecedented opportunities at the moment. The 900m user cluster (which is still growing) of Telegram is its biggest advantage over other blockchains. Actually, TON foundation has already done great work to capture these potential users. The advertisement revenue sharing program is a big step to bridge web2 economy to web3 technology, thus onboarding new users in the TON ecosystem. People are now financially motivated to join the onchain party and share the benefits of ecosystem prosperity.

Ending

Rome was not built in one day, neither is the TON network. Native $USDT issuance and advertisement revenue sharing are the first steps towards the holy grail of blockchain massive adoption. More efforts should be made to abstract the blockchain tech stacks and open a frictionless gateway to the public. Let's look forward to how it happens in the future.