TON and its history
TON’s history traces back to the ICO boom of 2017. Telegram raised $1.7B in a private sale of TON tokens (then called Grams). However, its development was halted due to SEC sanctions amidst a rapidly deflating market bubble. The project was later revived by the community, evolving into the current iteration of TON after numerous challenges.
TON’s resurgence began with the announcement of a partnership with Telegram during token2049 in 2023. They unveiled an in-app wallet called Wallet and TON Space, a non-custodial wallet, expressing their intention to focus on users and applications rather than technology and narratives. With its closed integration with Telegram, TON Foundation aims to onboard 500M active Telegram users on the TON blockchain.
Why the Traction?
TON stands out due to its seamless integration with Telegram, one of the most widely used platforms among crypto users. Alongside X (formerly Twitter), Telegram serves as a go-to platform for crypto projects to build and nurture communities. TON leverages this connection, aiming to onboard Telegram’s massive user base into its blockchain ecosystem.
Telegram’s Ecosystem and TON
The synergy between Telegram and TON is evident. The introduction of Telegram Mini-Apps has enabled developers to create a variety of applications, including gaming, content-sharing platforms, productivity tools, and more. These mini-apps enhance Telegram’s capabilities beyond its core functionality as a messaging app.
The Role of Mini-Apps and T2E
Mini-apps and the Tap-to-Earn (T2E) narrative acted as catalysts for the explosive growth of the TON blockchain. By enabling innovative use cases and engaging users with incentivized models, Telegram and TON together have created a unique ecosystem that blends Web2 accessibility with Web3 innovation.
The Notcoin & Hamster Phenomenon
In November of 2023, Notcoin came into the scene , with a mysterious and curious tagline “Probably Nothing”. It was a simple Tap to Earn Game which gained huge traction from the user in the hope of farming a potential Airdrop.
During the whole Notcoin Phenomenon, 50M people joined the NOTCOIN and the platform distributed $2.5 bn worth of Airdrop to the community. The success of NOTCOIN lies in how the whole engagement was designed, moreover the tokenomics part where the community was the priority, not VCs, OTC buyers or Presale Buyer. Pure level playing field.
Notcoins success proved the power of mini-apps in the adoption of TON blockchain and how Telegram can manifest its dream of onboarding 500M users into a reality. Hamster was another player who proved this too. It onboarded more than 200M users on the platform, an impressive feat for any platform. The tap 2 Earn narrative highly complimented the Telegram and TON Blockchain, during the height of the narrative, the number of downloads on TON Keeper jumped up by 375%, growing from 3.6M to 19M users in June. This most likely means that at least 15 million people came to Telegram for Hamster Kombat specifically! Yes, some of them were bots, since many abused the system and even created mobile farms to maximize their profit, but still.
Technical Outlook of TON Blockchain:
Basics of TON:
- Everything is a smart contract (your wallet is a smart contract too, not just a pair of keys). Account = Smart contract.
So any interaction with the blockchain is governed by the logic encoded in smart contracts. - TON is not compatible with EVM/Ethereum and operates on its own framework of Turing-complete smart contracts. Developers must use specific languages such as FunC, Tact, or Fift, and the architecture of these contracts differs fundamentally from EVM-based designs.
- The network employs a Proof-of-Stake (PoS) consensus mechanism, where validators are chosen based on the TON tokens they stake. These validators are responsible for producing blocks and ensuring network security.
- TON operates as a ledger of state transitions rather than transactions, focusing on the data and updates of smart contracts, including account balances, smart contract codes, and other associated information.
- TON and Telegram are highly coupled with each other and Telegram uses only TON Blockchain for its payment processing.
Types of Ton-Blockchains:
The TON Blockchain is a collection of Blockchains or we can say blockchains of blockchains. TON aims to process millions of transactions and is developed to cater to the needs of a large user base of billions of people.
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MasterChain
- The master chain is the main blockchain of the TON network and is responsible for maintaining the network’s overall security, stability, and consensus. It acts as the central source of truth and connects all other blockchains within the network.
- Masterchain or master blockchain holds the information about the protocol and current values of its parameters, validator set and their stake, set to active workchains and their “shards”. It contains the hashes of the most recent blocks of all workchains and shardchains.
- The master chain handles global tasks, such as:
- Validation and finalization of blocks in other chains (including base chains)
- Storing the global configuration of the entire TON network
- Managing the validator pool and distributing validator roles among the base chains
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Workchains
- Working blockchains or work chains are independent blockchains in the TON network that run parallel to the master chain. These are the ones containing the value-transfer and smart contract transactions. One can define its own work chain with a custom set of rules for the shard chains given its adherence to the interoperability criteria to make interactions between different work chains.
- There can be up to 2^32 workchains.
- At the moment there is only 1 work chain i.e Basechain
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ShardChains
- Sharding is a concept taken from database design whereby a single data set is splitted and distributed across multiple databases. Sharding allows horizontal scaling and parallel processing. It’s the key to big data.
- A sequence of transactions of a single account (e.g. Tx1 -> Tx2 -> Tx3 -> …) is called an account transaction chain or AccountChain. This emphasizes that it is a sequence of transactions associated with a single account. Several such AccountChains combined within a single shard form a ShardChain. The main idea of sharding in TON is that when account A sends a message to account B and account C sends a message to account D both of these operations can be performed asynchronously.
- Each workchain can be divided into 2^60 shard chains.
- When the number of transactions increases to a critical level, the blockchain is automatically split into two separate shard chains. If the load on one of the parts continues to grow, it is split in half again, and this process continues as needed. If the number of transactions decreases, the shards can merge again. This adaptive model allows for the creation of as many shards as needed at a given time.
Messages:
A message is a packet of data exchanged between actors (users, applications, or smart contracts). It typically contains information instructing the receiver on what action to perform, such as updating storage or sending a new message.
Types of Messages:
There are 3 types of messages in the TON Blockchain.
- External: messages sent from outside of the blockchain to a smart contract inside the blockchain. The messages are sent to the smart contract to trigger the execution of certain actions. A trivial example of this can be the interaction with the wallet, where you send such a message to your wallet contract every time you perform an operation in the wallet app (sending $TON, interacting with Dapp). The messages to your wallet contain orders to send internal messages from it.
- Internal: messages sent from one blockchain entity to another. Such messages, in contrast to external ones, may carry some TON and pay for themselves. When an internal message reaches its intended destination it is processed as specified by the code and the current data of this account (smart contract). Internal messages are handled by the recv_internal() function in FunC smart contracts.
- Logs: messages sent from a blockchain entity to the outer world. Generally, there is no mechanism for sending such messages out of the blockchain. In fact, while all nodes in the network have a consensus on whether a message was created or not, there are no rules on how to process it. Logs may be directly sent to /dev/null, logged to disk, saved in an indexed database, or even sent by non-blockchain means (email/telegram/sms), all of these are at the sole discretion of the given node.
Transactions:
The act of an account receiving a message from another account, processing it, updating its own state, and sending outgoing messages (optional) is called a transaction.
In TON there are 5 phases of a transaction.
- Storage Phase: Deducts storage fees based on bytes stored by the contract since the last transaction. If there are insufficient funds, the contract transitions to a frozen state, preserving its state for a limited time. In TON everything is an account/SC, your wallet too. You will notice if you make a tx after a long time, you will need to pay higher fees, that the fee accrued over the period of time for the account.
- Credit Phase: This is where the coins attached to the incoming message get credited to the contract.
- Computation Phase: This is where your program comes to life. The TVM executes the code verifies each operation and also keeps track of gas usage.
- Action Phase: The most important action in this phase is the new state of a contract. Your contract may at the end of the execution or at any intermediate step create a new state and new storage for itself and this will be recorded after the successful execution of a contract. There are other actions in the list and those actions are outgoing messages.
- Bounce Phase: This happens if the contract fails and the incoming message has a flag saying I’m a bounceable message. It means that at this phase if there is any failure and there’s any money left from the incoming message, then the contract would create the outgoing message back to the sender to bounce the money back. This is a safety feature that allows people to get the most of the funds back in case there is any error or failure inside the contract.
Onchain Reality:
The TON ecosystem experienced significant growth during the Tap-to-Earn narrative in mid-2024, fueled by the announcement of USDT integration on the blockchain. This move attracted a substantial audience to TON via Telegram. Below, we explore some key on-chain metrics of the TON blockchain:
TVL (Total Value Locked):
In July 2024, TON achieved an impressive TVL of approximately $800M. However, a sharp decline followed the arrest of Telegram’s CEO, Pavel Durov, in France (he was later released). Currently, TON’s TVL has dropped to $287M, indicating a significant reduction in locked value over the past year.
Stablecoins:
USDT’s integration is notable, particularly its utility for transactions via Telegram.
Users can bridge USDT to the TON network using platforms like Symbiosis and Layerswap, facilitating the use of stablecoins within the TON ecosystem.
Market Capitalization:
Stablecoins on TON currently hold a market cap of $1.4 billion, with USDT being the only stablecoin available.
Activity:
The Monthly Active Users (MAU) of stablecoins on TON is declining, suggesting fewer users are leveraging the blockchain for stablecoin transfers.
User Adoption:
On-Chain Wallets: Over the past six months, there has been an increase in on-chain activated wallets. An “on-chain wallet” refers to a smart contract of the “wallet” type. A wallet is considered “activated” when it successfully sends at least one outgoing transaction.
Daily Active Addresses (DAA): Over the last three months, DAA on TON has experienced fluctuations, with a significant spike on December 11, 2024, following OKX Ventures’ investment announcement. Currently, DAA stands at 260K.
Weekly Active Addresses (WAA): While WAA has shown volatility over the past three months, recent weeks have demonstrated growth, rising from 1.2M to 1.8M. This trend highlights increasing user activity despite earlier declines.
TON’s on-chain metrics reveal a mixed landscape of challenges and opportunities, with signs of recovery in user activity and adoption despite earlier setbacks.
What’s Ahead For TON?
The TON blockchain boasts an impressive technical infrastructure, underpinned by its advanced sharding capabilities, enabling it to handle substantial network loads with ease. Much of its remarkable growth can be attributed to the “T2E” (Token-to-Earn) trend, showcasing the potential of gaming narratives within the TON ecosystem. Additionally, TON’s close integration with Telegram creates a seamless pathway for onboarding Web2 users into the Web3 landscape.
With Telegram evolving beyond a messaging app into a comprehensive ecosystem, the synergy between the two platforms is clear. Telegram’s revenue-sharing model, powered by TON, provides creators with ad revenue directly in TON tokens. This marks a shift from traditional social media practices, enabling fairer financial distribution and empowering content creators. Not only does this model reward creators, but it also strengthens user engagement and loyalty to the platform.
In comparison to platforms like WeChat, Telegram positions itself as a leading gateway for Web2 users transitioning into Web3. With approximately 900 million monthly active users (MAU), Telegram represents one of the largest pools of “Web2.5 users,” making it a key distribution channel for global crypto adoption.
TON’s vibrant community and growth-focused initiatives—including grants, technical support, and marketing assistance—have accelerated the onboarding of new projects and teams into the ecosystem.
These efforts, combined with a pro-crypto stance from the US government, signal TON’s intent to expand its presence in the United States. To drive this expansion, TON recently appointed Manuel Stotz as its new president, reflecting its commitment to growth in key markets.
BlockApex Take:
At BlockApex, we believe that TON has established a robust infrastructure capable of delivering impressive transactions per second (TPS). Telegram’s mini-apps and bots provide a foundation for creating innovative solutions within the Telegram ecosystem. When combined with TON, they can be leveraged as a payment infrastructure, unlocking new possibilities for seamless integrations.
TON also offers the flexibility to create workchains tailored to specific requirements. Currently, the network operates with a single basechain; however, there is significant potential for expanding this framework. For instance, the development of EVM-compatible basechains could open doors for broader adoption and interoperability, catering to diverse needs within the blockchain ecosystem.
BlockApex is at the forefront of secure development of evm and non-evm based blockchain applications. We dive into the depth to provide secure development covering the both technical and economic aspects of the application. Reach out to us to discuss more.
