The Open Network (TON)

The Open Network, commonly known as TON, is a highly performant layer 1 blockchain that has integrated with the Telegram messenger app. Telegram initially raised for TON in 2018 through an ICO where they raised 1.7 billion, however after significant legal hurdles with the SEC the project was halted in 2020 and investors were refunded. As a result of this case, Telegram withdrew from the project and allowed enthusiasts to explore the network, the network coins (GRAM/TON) were placed into smart contracts allowing anyone to participate in mining on equal terms. At the time TON was in a testnet state and the tokens had no value however after some time a thriving TON ecosystem emerged as the project moved to mainnet.  

TON now utilises a hybrid consensus mechanism of Proof-of-Stake (PoS) and Byzantine Fault Tolerance (BFT), ensuring fast transaction finality through an architecture that uses sharding for scalability. TON has some key differences to other popular blockchains such as asynchronous calls between smart contracts and the fact that blockspace is rented by smart contracts rather than eternally owned. Ultimately these design choices are put in place in order to achieve the end goal of the TON foundation. Provide a network that can scale to onboard the masses in a freedom and privacy preserving manner, in doing so however it does sacrifice on immutability. 

Today, TON sits as the 7th largest blockchain with a market capitalization of US$17 billion and is experiencing growth at a rapid rate as it taps into the large underlying user base of the Telegram application.  

 

Telegram

Telegram is a hugely popular instant messaging server that launched in 2013, originating from the VK social media platform founded by the Durov brothers. Telegram’s virality is largely due to its promises of privacy & freedom where, unlike many other social networks, they don’t sell user data and implement end to end user encryption for ‘Secret Chats’. Telegram is currently the fourth largest messaging app in the world boasting 930 million monthly active users (MAU) and 360 million MAU for mini-apps, India has the most telegram users with a user base of more than 104 million. Notably, throughout its growth Telegram has spent $0 on marketing and is still growing by almost 2.5 million users daily with only a team of 30. 

So why does the integration of TON and Telegram make sense? Unlike its competitors, TON is utilising Telegram’s already large and thriving community of users and introducing them to blockchain through seamless integration rather than building a blockchain solution and trying to build a community around it. Pantera Capital CEO, Dan Morehead, recently echoed this stating “99% of blockchain projects are a tech idea trying to create a community – from nothing. That’s a hard road for most”. Furthermore, we believe that mobile wallets will continue to become more dominant as a payment method. China has already demonstrated this with over 84% of respondents in a recent survey stating they have utilised a mobile wallet for transactions in the past year using QR-code based payments. 

Additionally the integration of TON and TON based mini apps within Telegram makes sense due to four key reasons 

• Instant Onboarding: Telegram users do not need to download any additional apps or sign-up for any additional services. They can start interacting with the TON blockchain straight away via telegram’s native self custodial wallet and mini apps.
• Cross-platform: Telegram is cross-platform allowing for the seamless use of a single web application and wallet across all platforms through QR codes.
• Crypto Notifications: Integrating DeFi through mini apps on Telegram allows users to get real-time notifications about their crypto holdings on all devices. This feature lets users receive updates about their DeFi positions, like derivatives and lending, directly through Telegram.
• Viral Mechanics: Telegram now allows users to share mini-apps with their contacts in one tap and send crypto assets to any Telegram user. This easy onboarding process creates a growth cycle for the TON ecosystem, as users share crypto with friends, who then use and share it further.

 

What Are Telegram Mini-Apps? 

Telegram mini apps are web applications that run inside the Telegram messenger using common web languages such as HTML, CSS, and JavaScript. Mini apps essentially add a new dimension to telegram bots allowing them to replace any website. This offers users a seamless way to access additional services without switching apps.  

Source: Ton Foundation

 

The TON Ecosystem

TON has seen significant growth and momentum in the last 6 months with the monthly active wallets (MAW) growing by 2816% from 180,000 to 5.25 million. Notably this figure still has potential multiples to move, if we believe that at least 10% of telegram users will start actively using wallets this figure could rise to upwards of 90 million MAW, a 17.7x increase from current levels. This could see a significant positive impact for the value of the TON token as well as the value captured by the underlying network. This possible scenario would make TON the most actively used blockchain by a decent margin with Solana currently holding the highest amount of activity with 41.65m MAW according to The Block.

 

Active users in TON ecosystem

Currently on TON the large majority of users or unique active wallets are captured by decentralised exchanges and liquid staking protocols. However there has been a growing trend towards GameFi on TON through clicker apps such as NOTcoin and Catizen which reward their users with tokens.

 

Project	Category	Unique Active Wallets (30d)
Ston.fi	DEX	692626
DeDust	DEX	116301
Tonstakers	Liquid Staking	42212
Bemo	Liquid Staking	5453
Storm Trade	Derivatives	5403
EVAA	Over Collateralized Lending	3787
DAOLama	NFT Lending	1206
TapFantasy	GameFi	268
Fanton	GameFi	125
Whales	Liquid Staking	121

 

Fees, Speed, and Scalability

TON positions itself as a highly scalable platform with a time to finality similar to Solana’s while being benchmarked at a TPS of 100,000 according to the TON foundation and Certik. However while fees on TON are still very cheap compared to the Ethereum mainnet they are still multiples more expensive than transfer fees on Solana. TON Foundation holds the belief that vertical scaling will always eventually become limited and as such have embraced a horizontal scaling strategy through chain sharding.

Chain	Transfer Cost (Fees)	Max Transactions Per Second (TPS)	Time to Finality
Ethereum	$0.455	119 TPS	13 minutes
TON	$0.039	100,000 TPS	6 seconds
Arbitrum (ETH L2)	$0.001	40,000 TPS	16 minutes
Solana	$0.0008	65,000 TPS	5 seconds

 

 

Ecosystem & DeFi 

TON has experienced considerable TVL growth within the last 6 months delivering a 4661% growth from 13.51m at the start of 2024 to 619.62m. This growth has been fueled largely by the integration of TON with the Telegram platform, the launch of Tether’s USDT on TON, and the recent popularity of clicker games such as NOTcoin which allowed users to farm its token in their game. NOTcoin has since accumulated a market capitalization of more than US$1 billion. 

 

The User Experience on Telegram

Telegram’s integration with TON has greatly improved the user experience for anyone wanting to onboard to and use crypto networks. TON achieves this by:

• Native wallet integration within the Telegram app allows every Telegram account to instantly access a wallet and use it with dApps, without needing third-party apps.
• The TON Space wallet is a non-custodial wallet within the Telegram app that can be set up in under a minute without a seed phrase, using your Telegram account and email for recovery.
• Telegram’s Mini-apps let users fully interact with DeFi applications without leaving the platform, enabling quick discovery and use without any downloads, bypassing the need for legacy app stores.
• Telegram users can instantly send USDT and other crypto assets via chats, making it easy to transfer money globally without needing bank account details or wallet addresses and without costly fees.
• Users can instantly share their mini-app experiences with friends via the Telegram app.

 

Mini App Showcase 

EVAA is the leading lending protocol on TON. Evaa allows users to loan crypto assets in order to earn interest as well as borrow crypto assets through over collateralized loans.  Notably high yields can currently be earned through lending on the Evaa platform.

Storm Trade is the first decentralised derivatives protocol on TON, the Storm Trade mini app allows users to open and manage trading positions through their phone in a centralised exchange like experience. 

DeDust is one of the leading decentralised exchanges on TON. The DeDust mini app allows users to swap crypto assets as well as provide liquidity to the swap pools. Additionally the platform allows you to stake their token SKALE as well as bridge funds directly from an Ethereum wallet to a TON wallet.

 

The Future of TON

TON is still in its early stages and we will watch eagerly as more Telegram users start to adopt TON as a blockchain. Telegram has proven itself to be deeply aligned with the ethos of crypto, focusing on freedom and privacy for users positioning itself as one of the leading networks to put “web3 in the pockets of billions” through its user centric approach.

 

Disclaimer: TON is a portfolio holding of Apollo Crypto