Overview of TON Ecosystem DeFi Status in Q1 2024

Original Title: The State of TON DeFi Q1 2024

Original Author: The Open Platform

Original Compiler: Ismay, BlockBeats

Memecoin speculation is the central theme of the TON DeFi space and the overall cryptocurrency landscape in Q1 2024, which has at least partially contributed to the surge in on-chain activity and DeFi metrics:

Source: TonStat, DeFillama, CoinMarketCap

One of the main highlights of this quarter is that TVL has increased sevenfold, primarily driven by the rise in DEX activity and the market dominance of the liquid staking protocol Tonstakers.

Another key theme is the launch of the Open League. This program rewards users who interact with TON projects and features a Toncoin prize pool competition that rewards the top-performing TON-based projects each season. A key element of the program is the enhanced APY farming pools. The introduction of these farming pools, along with the surge in memecoin trading volume, has made DEX the best-performing DeFi sector on TON based on TVL:

In the following sections, we will explore in more detail the patterns behind the soaring performance of TON-based DEX.

DEX: Open League Meets Memecoin Speculation

The popularity of tokens (also known as jettons) on the TON blockchain surged dramatically in the last quarter of 2023, a trend that has continued to this day. Memecoins have largely driven the increase in trading activity.

Chronologically, this rebound followed the launch of Notcoin, a meme coin that was previously non-tradable, which anyone could "mine" by clicking a button in the Notcoin mini-app on Telegram. Within just a few months of its launch, Notcoin attracted 35 million active users. Notcoin is now listed on multiple DEXs and CEXs, inspiring a variety of meme jettons with similar mechanisms. The surge in jettons is one of the main drivers behind the spike in DEX trading volume based on TON.

The memecoin speculation has drawn significant attention to DeDust and S TON . fi, both of which listed large shares of these tokens. According to data from Tonalytica, the total trading volume on TON DEX reached $4.2 million, setting a 90-day historical high. The second quarter has set another historical high, now exceeding $60 million:

Below is a screenshot from our internal analysis tool showing the trading volume on the two DEXs. This pattern closely matches the one on the Tonalytica chart:

S TON . fi and DeDust are the main venues for enhancing liquidity pools, which is an incentive initiative of the Open League. This has led to a more than ninefold increase in TVL on TON, with both DEXs making significant contributions in the first three seasons of the program. The third season has already begun, and readers can check the available enhanced pools on S TON . fi and DeDust, as well as access the Open League Pools bot.

STON . fi ranked first in the DeFi competition held during the pilot season of the Open League, followed by DeDust. This ranking is based on changes in TVL and the protocol fees earned during the pilot season. The final rankings can be viewed here.

One of the themes of Q1 2024 is that the two major DEXs launched Telegram Mini Apps. DeDust and STON . fi now have their own mini-apps, which will diversify the trading experience and allow users to execute trades directly within Telegram. This could be particularly convenient for traders using Telegram-based token research tools and news channels.

Additionally, Storm Trade (currently the leading derivatives exchange on TON) now allows traders to use Toncoin as collateral for trading futures. This update eliminates the need to convert TON to jUSDT to place collateral, simplifying the onboarding process for users and allocating additional utility to Toncoin within the ecosystem. Furthermore, as part of the Open League, Storm Trade has also completed its largest reward program ever, with a prize pool of approximately $130,000. Rewards will be distributed to the best traders based on trading volume, profit and loss rankings, and liquidity performance in designated trading pairs.

Liquid Stake Propels TON into the Top 20 Chains by TVL

In terms of TVL, liquid staking remains the dominant sector for TON. According to DefiLlama data, as of this report, TON ranks 17th by TVL when considering the value of Stake and Liquid Stake.

Tonstakers won the liquid staking competition in The Open League pilot season, followed by bemo and the new liquid staking protocol Stakee, maintaining a leading position in TVL market dominance. Similar to the DeFi competition, the ranking is based on changes in TVL; another metric used is the number of new users joining the protocol during the corresponding period.

Stakee (Stakee Bot) is a new liquid staking protocol on TON. Stakee combines simplicity, reliability, and high APY to attract Toncoin holders looking to increase their yields with minimal fees. The platform ensures secure and transparent transactions by running the official smart contracts developed by the TON Foundation.

Additionally, TON Whales launched Whale Liquid, a new liquid staking pool. This protocol allows Toncoin holders to earn ws TON (which can be exchanged on DeDust) as well as access lending protocols on TON. The project is currently in the testing phase, with total equity of 848K Toncoin (over $5 million).

Lending: EVAA Protocol Launches on TON

The Evaa protocol has launched on the TON mainnet. As of this report, Evaa's total supply is $26.1 million, with total borrowings of $12.03 million.

The EVAA Protocol hosted supply and lending activities as part of the Open League. This event provided users with a unique opportunity to lend or borrow tokens such as TON, st TON, ts TON, jUSDC, and jUSDT through EvaaAppBot or app.evaa.finance. Participants earn weekly airdrops, interest rewards from supply and lending activities, and EVAA XP points, which can be redeemed for EVAA DAO tokens in the future.

Although the event has officially ended, reward pools with attractive APYs are still available in the app:

Similarly, DAOLama hosted a farm season event and launched Reward Points (RP), an internal token designed to incentivize users through in-app activities. Each loan issued earns RP, which can be exchanged for $LLAMA. The promotional period ended on March 30, and users can now trade tokens on STON . fi and DeDust.

RedStone is the First Oracle Solution on TON

Oracles are a crucial component of blockchain technology as they serve as a bridge connecting blockchains with the external world. They provide a reliable way to input external data (such as token or stock prices) into the blockchain. This functionality is essential for enabling smart contracts (automated contracts with terms directly written into code) to interact with and respond to external events.

RedStone has become the first available oracle on TON, marking a significant milestone for the integrity of DeFi data based on TON.

RedStone emphasizes that TON's asynchronous and fully decentralized nature requires a significant shift in the usual integration methods, involving more complex inter-contract messaging rather than the direct contract interactions common in other blockchains. Looking ahead, RedStone aims to support TON's DeFi ecosystem through a new relay system to enable consistent price updates, more easily integrated smart contract templates, and advanced data sources to meet the growing demands of DeFi based on TON. Learn more about the integration here.

Future Outlook

Jettons on the TON blockchain are opening up a unique niche market, representing various digital assets that go beyond traditional utility. While some of these jettons may not yet have clearly defined practical applications, they still hold significant positions within the broader ecosystem.

The surge in interest in these diverse assets may be the starting point of a larger process: the increasing demand for DeFi infrastructure to meet the capital efficiency requirements of token holders. The success of incentive activities as part of the Open League already provides evidence of this trend.