TON Rebirth: Technical Advancements and Future Prospects of Telegram Open Network

Original Author: Cynic Shigeru

Compiled by: CGV Research

TL ; DR

• The history of TON: Telegram was founded by the Durov brothers, who began developing their own blockchain - Telegram Open Network (TON) - in 2018 to meet the needs of its hundreds of millions of users. Through its token $Grams' ICO, TON raised over $1.7 billion. However, in 2019, due to a lawsuit from the U.S. Securities and Exchange Commission (SEC), Telegram abandoned further development of TON. Nevertheless, between 2020 and 2021, the New TON team restarted the development of TON based on open-source materials and successfully renamed it The Open Network.
• Technical features of TON: TON is designed for large user groups. Its hallmark is the use of sharding technology, which allows multiple chains to process transactions in parallel, referred to as the "blockchain of blockchains." The architecture of TON is divided into three layers: masterchain, workchain, and shardchain. The masterchain serves as the coordinating hub, while actual transaction processing is handled by various workchains and shardchains. Additionally, TON's sharding is dynamic, allowing it to combine into larger shardchains based on interactions between accounts.
• Network structure of TON: TON nodes communicate using the Abstract Datagram Network Layer (ADNL), which provides the foundation for interactions between different shardchains. By utilizing the Kademlia Distributed Hash Table (DHT) to locate other nodes in the network, TON also creates specific overlay sub-networks for each shardchain to ensure effective communication.
• Applications and prospects of TON: TON is not just about raising funds but aims to build a decentralized, secure, and reliable internet. Features like TON eSIM, TON domain names, and TON storage are all designed to enhance user privacy and data security. Although the current demand for decentralization may not seem high, TON has established a substantial fund for its ecosystem and, leveraging its large user base, is expected to gain attention and growth in the future.
• Although TON faced challenges upon its initial launch, its innovative technology and vision for a future decentralized network continue to attract attention in the blockchain space. Its strong financial backing and large user base also lay a solid foundation for its future development.

The History of TON

In 2018, Telegram founders Durov brothers began exploring blockchain solutions suitable for Telegram. At that time, no blockchain could support Telegram's hundreds of millions of users, so they decided to design their own Layer 1 chain, named Telegram Open Network, abbreviated as TON.

Months later, through the ICO of TON's native token $Grams, TON raised over $1.7 billion. In 2019, the Telegram team released related documents and launched two testnets.

In October 2019, the U.S. Securities and Exchange Commission (SEC) sued Telegram, accusing it of conducting an unregistered securities offering. The Telegram team suspended the mainnet launch of TON and ultimately chose to abandon the project in its struggle with the SEC, stopping the development of TON and refunding the ICO funds to investors.

Between 2020 and 2021, the New TON team restarted the development of TON based on open-source materials. In May 2021, the community voted to rename the long-stable testnet 2 to Mainnet. The New TON team also rebranded as the TON Foundation, a non-profit community to support and develop TON.

This is the TON we are familiar with today, officially known as The Open Network.

Of the Network

From the very beginning, TON was built for social networks with a large user base; the TON Blockchain is Telegram's blockchain. At that time, under outdated technological systems, mainstream blockchains could not effectively increase their TPS, so how could they support Telegram's hundreds of millions of users and the potential millions of transactions per second?

The TON team's idea was that a single blockchain's TPS could only reach a few dozen per second, so why not build several chains? TON uses sharding technology to horizontally distribute the work of processing transactions across multiple chains, creating a blockchain network composed of multiple blockchains, referred to as the blockchain of blockchains.

Specifically, the TON Blockchain adopts a pyramid-like three-layer architecture, with each layer accommodating a type of blockchain: masterchain, workchain, and shardchain.

The masterchain is the central hub coordinating the work of the TON Blockchain, and there is only one. This chain contains the protocol parameters, the set of Validators, and the corresponding shares, as well as the current working Workchains and subordinate Shardchains. The lower chains submit their latest block hashes to the masterchain, so when the lower chains need to read cross-chain messages, they can determine the latest state.

The masterchain serves a coordinating and anchoring role, while the actual work is done by individual Workchains, with the system capable of accommodating up to 2^32 Workchains. Each Workchain can flexibly customize rules, such as address formats, transaction types, native tokens, and smart contract virtual machines, as long as they meet interoperability standards. It is worth noting that a Workchain is merely a virtual concept; it exists as a collection of Shardchains and does not have a physical entity.

To improve processing efficiency, each Workchain can be further divided into shardchains, with a maximum of 2^60. Shardchains adhere to the rules set by their Workchain, distributing the workload across all Shardchains, with each Shardchain serving only a portion of the entire account set.

For typical sharding, the sharding is top-down, with the division criteria often being the prefix of account addresses. For example, if a Workchain is evenly divided into 256 shards, accounts with address prefixes of 0x00, 0x01, …, 0xFE, 0xFF will be allocated to different Shardchains. In TON's sharding mechanism, however, sharding is a bottom-up dynamic process; a more appropriate visualization is to first treat each account as a Shardchain and then combine them into larger Shardchains based on their relationships to ensure that each Shardchain has a sufficient number of transactions.

Now, if we revisit the architecture diagram of the TON Blockchain, does it seem to have some similarities with network architecture? We have reason to believe that the Durov brothers, with their background in networking, were inspired by network architecture when designing TON. In the initial scenario, each network device operates independently (each account as a Shardchain), and since some network devices communicate frequently, they are combined into a local area network (from single-point Shardchains to larger Shardchains), with different local area networks communicating through upper-layer nodes (Shardchains interoperate via the Masterchain).

The TON Blockchain is, in fact, another form of a network, which is TON of the network.

By the Network

As a distributed system, blockchain nodes need to communicate through a P2P network and cannot rely on centralized servers or CS architecture. For single blockchains like Bitcoin and Ethereum, propagating blocks and transactions through gossip protocols can meet their needs, but for TON, the multi-chain architecture imposes higher requirements on network protocols.

TON nodes use the Abstract Datagram Network Layer (ADNL) for data transmission, abstracting the network layer of the traditional TCP/IP layered architecture. To facilitate identity recognition, nodes do not need to consider IP addresses but instead communicate using abstract network addresses (Abstract Network Address). This address is a 256-bit integer, a hash value based on ECC public keys and other parameters, facilitating encryption and decryption of communication between nodes, providing the basis for the separation between different Shardchains.

TON uses the Kademlia Distributed Hash Table (DHT) to locate other nodes in the network. When a client needs to submit a transaction to a Validator of a certain Shardchain, it can look up the Validator's location in the DHT using a key.

The most critical part is the Overlay network. Since different Shardchains operate independently and do not care about or have the ability to process transactions on other Shardchains, it is necessary to build an Overlay sub-network for each Shardchain within the TON Network, open to nodes wishing to participate in communication. The Overlay network communicates internally using a gossip protocol based on ADNL.

With its unique network protocol design, addressing, transmission, and applications are finalized, allowing TON to achieve an infinite sharding solution and attain ultra-high TPS, which is TON by the network.

For the Network

In today's era of "thousands of chains emerging," a public chain must stand out by leveraging its strengths and avoiding weaknesses. Ethereum's advantage lies in its TVL and application ecosystem, Solana's advantage is its large developer ecosystem, and Arbitrum's advantage is its technical reliability and operational capabilities. The TON blockchain is currently in a relatively new but rapidly rising position in the blockchain market, needing to distinguish itself with its unique multi-chain architecture and high scalability.

Firstly, its technical foundation enables it to be a highly flexible and scalable platform. Due to its innovative multi-chain architecture, it can easily handle a large number of transactions, addressing many scalability issues faced by other blockchains.

Secondly, TON's close integration with Telegram also gives it a foothold in the competition. Telegram's vast user base provides TON with a large potential user group, which many emerging blockchains lack.

However, it also faces some challenges. Other blockchain projects have already established large communities and ecosystems, so TON needs to continually work to attract developers and users. Additionally, it must compete with other blockchain projects that have strong functionalities and innovative solutions, meaning it must constantly innovate to maintain its competitive edge.

In competing with other mainstream blockchains, TON must prove its technical advantages and practicality, which will be key to its future development. By demonstrating the security, speed, and efficiency of its system, it may attract more enterprise and individual users.

Overall, the TON blockchain is in a highly competitive and dynamic market environment. While it has some significant advantages, it still needs to prove its value, especially in a market where many mature and successful projects already exist.

So what are TON's advantages? In a time when various scaling solutions have matured and "high performance" is no longer the key factor determining a chain's success, how can TON maintain the activity of its ecosystem?

CGV Research believes there are two directions: one is social networking, and the other is network services.

From the perspective of social networking, we only need to consider what needs users have while using Telegram. There is a significant amount of import and export trade on Telegram, leading to the creation of TON payment, with the built-in wallet in Telegram further lowering the usage threshold; users have a need to showcase artistic aesthetics, and TON NFT serves as a great social tool; playing games with friends is the most enjoyable thing, so GameFi can rapidly proliferate through social networks.

Network services are also TON's traditional domain, as everything in traditional networking has been reimagined by TON, referred to as the future of the internet. Anonymous eSIM realizes the ideal of a privacy-protecting social network envisioned by Telegram's founders; TON domain names enhance readability, making it easier for users to find each other on the TON network; TON URLs, TON proxies, and TON WWW aim to provide a decentralized, secure, and reliable internet for everyone; TON storage is an upgraded version of Torrent, ensuring user data security through decentralized storage.

TON uses blockchain technology not just to raise funds but hopes to leverage blockchain to build a more decentralized, secure, and reliable internet, which is TON for the network.

Conclusion

Unfortunately, based on the current level of activity in the TON ecosystem, it seems that there are not many users who need a more decentralized, secure, and reliable internet. This is also a problem faced by all current blockchain projects; most people enter the blockchain ecosystem to make money rather than genuinely needing decentralized services. Without a wealth-generating effect, projects find it challenging to maintain sustained attention.

Fortunately, the TON ecosystem is not short on funds; TON has established an ecological fund of several hundred million dollars to invest in and incubate projects within the TON ecosystem. With the largest monthly active user base in the entire Web3 world, we have reason to believe that the TON ecosystem will experience an explosion in the future, warranting continued attention.