What is TON Blockchain?

TON (The Open Network) is a decentralized blockchain platform originally developed by the Telegram team, but has since become a community-driven ecosystem led by the TON Foundation.

Telegram and TON Chain - the Past and the Present

TON chain was originally named Telegram Open network and was developed by the Telegram team. It is a Layer 1 blockchain, the native token was originally named $GRAM. Telegram raised $1.7 billion through token sales in 2018, however, the ICO was later stopped by SEC and was deemed as an illegal securities offering.

By the SEC ruling, Telegram returned all raised funds to investors and dropped the project in May 2020. The blockchain was then handed over to the community developers and rebranded as The Open Network, the native token was renamed as $TON.

The TON blockchain has seen remarkable growth and performance in recent months. Its total value locked (TVL) has surged to over $700 million, indicating growing investor confidence and adoption of the TON ecosystem according to data from Defillama.

By integrating with the Telegram messaging app, which has over 900 million users, TON gains access to a massive potential user base. This integration lowers the barriers for Telegram users to engage with blockchain technology and cryptocurrencies, driving wider adoption of TON.

Tokenomics of TON token

Like all Proof-of-Stake Layer 1 blockchains, the native token $TON is used as transaction fees and in staking and validating transactions, and new $TON tokens will be minted to reward validators.

$TON has an initial supply of 5 billion, the token is inflationary with no maximum cap, the inflation rate is set at 0.6% per year, and the current total supply is around 5.1 billion. If a validator is caught misbehaving when validating blocks, a part or all of its stake will be taken away as a punishment, and a large portion of it will be burned, thus reducing the total supply of $TON tokens.

TON Chain x Telegram Integration

During 2023-2024, Telegram and TON have implemented a series of integrations to reduce frictions and onboard non-Web3 users into Telegram x TON ecosystem.

Advertising with Toncoin on Telegram Channel: Telegram lets users purchase in-platform advertisements with Toncoin. Users can promote their channels by paying Toncoins and have the authority to choose the exact channels to place their TON-powered ads. Channel owners are able to withdraw their rewards without fees.

Advertising with Toncoin on Telegram Mini-app: The TON Community recently introduced Adsgram, a new third-party platform on Telegram that enables developers to connect their mini-apps — or bots — to an advertising system and earn Toincoin TON by displaying ads. Adsgram offers a variety of ad formats, including 15-second video ads, static banners, and the upcoming feature of channel subscriptions.

Telegram Mini-app integrated with Ton Chain: Telegram Mini Apps are a powerful feature that allows developers to create interactive web applications that run directly within the Telegram messaging platform. Mini Apps can incorporate blockchain technologies, allowing for crypto transactions and other Web3 functionalities. Telegram Mini Apps have emerged as a powerful platform for integrating crypto games and blockchain-based applications directly into the Telegram messaging ecosystem.

USDT on Ton chain and Telegram: USDT was launched on the TON blockchain in April 2024, and is seamlessly integrated with Telegram, allowing its 900 million users to send and receive USDT directly through the messaging app. TON's development team has optimized Tether's smart contract to make transactions significantly cheaper. A transaction between two USDT users on TON costs only 0.0145 TON (approximately $0.10), which is 66% less expensive than other tokens on the network.

Telegram Web 3 Wallet: Telegram launched a significant Web3 initiative by introducing a self-custodial cryptocurrency wallet called TON Space, integrated directly into the Telegram messaging app. The goal is to create a TON-centric Web3 ecosystem within Telegram, transforming the integrated wallet into an all-in-one platform.

TON DeFi Ecosystem

While TON chain has emphasized its development on Web3 applications and its cooperation with Telegram to onboard web2 users, it has also developed a DeFi ecosystem including DEX, Lending protocol, and liquid staking protocol. Some DeFi applications have already integrated with Telegram, users can seamlessly interact with them through the Telegram Mini app.

DEX

DeDust - The Largest DEX

DeDust is the largest AMM decentralized exchange (DEX) built natively on the TON Blockchain with over $370M in TVL. The platform introduces several distinctive features to DeFi on the TON Blockchain that enhance functionality and user experience. One of its key innovations is the use of an abstraction layer, which enables seamless integration and swapping of various asset types, including native coins and tokens from other chains.

STON.fi - 2nd Largest DEX

STON.fi is another AMM DEX on TON chain with over $300M in TVL. STON.fi primarily functions as a decentralized automated market maker (AMM) on the TON blockchain, but for cross-chain trasaction, STON.fi utilizes an RFQ-based protocol.

Traders who want to swap a certain amount of one asset from one chain to another submit a request specifying the specific tokens and the amount they wish to swap.Upon receiving each request, the RFQ system queries various professional market-makers, who respond with quotes. The protocol chooses the best quote based on specific criteria and submits that to the user for execution.

Liquid Staking

Tonstakers is a liquid staking protocol for the TON (The Open Network) blockchain that allows users to earn rewards on their TON coins while maintaining flexibility and control over their assets. Users can stake their TON coins and receive tsTON tokens in return, which represent their share in the staking pool. Current TVL of Tonstaker is $285M.

Lending Protocol

EVAA protocol is the first decentralized lending platform on the TON (The Open Network) blockchain. EVAA is designed to work seamlessly with Telegram through mini apps, allowing users to manage their assets within the familiar Telegram interface.

Final Thoughts

A significant bottleneck for Web3 development is the lack of genuine user engagement. While there are numerous users involved in DeFi, staking, and liquid staking, the demand for these crypto use cases is primarily driven by financial incentives. Conversely, real user engagement is driven by the intrinsic value of the services themselves, whether they are games, social applications, or other utilities.

By leveraging Telegram, Ton Chain has the potential to serve as a crucial entry point for onboarding Web2 users into the Web3 ecosystem. This can be achieved without requiring users to abandon their familiar Web2 application interface, thanks to Telegram's Mini-app functionality. This integration allows users to experience and utilize Web3 services seamlessly within a platform they already know and trust.