2024 Launch: Core Reasons for the TON Ecosystem Explosion and Future Trend Outlook

Author: Shigeru, CGV FOF

As we enter each day of June 2024, the records created by TON, whether in terms of users, transaction volume, or TVL, are being continuously refreshed:

• The daily active addresses on TON have exceeded $ETH for several consecutive days;
• The total value locked (TVL) in TON has surpassed $600 million, growing 1000 times since 2024;
• In just 47 days, $450 million of $USDT was issued on TON;
• Steve, the chairman of the TON Foundation, proposed that a hallmark of mass adoption in crypto is the birth of the first TON mini-application with 100 million Telegram users; Hamster Kombat achieved this the very next day.

The CGV Research team believes that the arrival of TON summer 2024 is attributed to the dual benefits from both "within TON" and "outside TON."

Internal Drivers of TON

------Wallet Innovation: In July 2023, TON launched a new wallet payment feature, allowing users to conduct various transactions and payments through the TON wallet, enhancing user experience. Subsequently, in September, TON introduced TONSpace, a self-custody wallet that enables users to manage their private keys and assets independently. By December, a secondary entry for the wallet was added within the Telegram app, making it more convenient for users to utilize the TON wallet.

------Token Locking Strategy: At the beginning of 2023, the TON community and validators decided through on-chain voting to freeze the wallets of inactive miners, which accounted for about 21% of the total supply, and these wallets will be locked until February 2027. By October, the community launched the TON Believers Fund, a five-year locking plan where users could choose to donate or deposit their tokens into a smart contract. This move locked 26% of the supply, totaling approximately 47% of TON tokens locked for three to five years, effectively reducing the circulating supply in the market and benefiting token price stability.

------Deployment of Native USDT on TON: In April 2024, Tether announced the introduction of USDT to the TON network, adding trading and financial activities related to USDT to TON and providing strong support for DeFi applications. The issuance of USDT on TON quickly surpassed that of Cosmos and Near, becoming the network next to Tron, Ethereum, Solana, and Avalanche.

------Breakthrough in Blockchain Performance: On October 31, 2023, TON achieved a peak performance of 104,715 transactions per second during a public performance live test, processing a total of 107,652,545 transactions. This performance was verified by Certik, marking TON as one of the fastest and most scalable blockchains in the world.

------Market Promotion: In the spring of 2024, by launching the #OpenLeague Super League with a total prize pool of $150 million, TON attracted a large number of users and market attention. Additionally, the revenue-sharing strategy implemented by the TON Foundation in collaboration with Telegram, along with the listing of Notcoin on several major exchanges, significantly enhanced its market performance and brand influence.

External Factors for TON

------Large Investment from Pantera: In May 2024, Pantera made the largest single investment in history into the TON network, which not only validated the recognition of TON's technology and market potential but also potentially attracted more capital attention, enhancing market confidence in the TON ecosystem.

------Global Competitive Environment and Market Demand: With Musk's X application plan launching crypto payment features in mid-2024, TON faces pressure from global competitors. Furthermore, the entire crypto market is in urgent need of new narratives and development directions, and the TON ecosystem injects new vitality into the market with its innovative technology and applications.

------Demand for New Narratives: The crypto industry requires new narratives and directions, and the growth in users and transaction volume brought by the social fission and flywheel effect of the TON ecosystem provides new vitality to the market.

In summary, the CGV Research team believes that the TON ecosystem may exhibit four major development trends in the future. These trends will shape the unique position of the TON ecosystem and may have a profound impact on the entire crypto industry.

Trend 1: The Black Hole Effect from Telegram's Full Ecosystem Expansion

Originally a messaging tool, Telegram has now evolved into a multifunctional platform integrating social, payment, service subscriptions, and mini-programs. With the addition of TON, Telegram is rapidly advancing along a similar development trajectory.

Upstream (Infrastructure and Development Platform): TON provides robust infrastructure and software development kits (SDKs), attracting developers to build and deploy decentralized applications (DApps), which may weaken the development resources of other blockchain platforms.

Midstream (Application Layer and Services): Customized stablecoin solutions, micropayment systems, and the ability to seamlessly access mainstream crypto assets through the official cross-chain bridge in the TON ecosystem provide users with a one-stop asset management and trading platform.

Downstream (User Adoption and Market Expansion): Telegram's vast user base provides a market access point for TON, enabling it to integrate crypto technology into broader economic activities through partnerships with financial institutions, media companies, and retailers.

Trend 2: No Regulatory Barriers + Fastest Public Chain + Flywheel Effect, Allowing the TON Ecosystem to Have No Ceiling

TON's global service capability is not restricted by financial regulations in specific countries or regions, combined with its high performance and user growth flywheel effect, indicating that the potential of the TON ecosystem may be limitless.

Monetization of Traffic: Telegram's traffic advantage will bring significant monetization potential to TON, especially in decentralized markets like Fragment, which has already facilitated substantial trading volume.

NFT Market: Telegram's stickers converted into NFTs and traded through the TON blockchain signal a massive emerging market.

Revenue Realization of Web3 Projects: Mini apps on TON are expected to become high-revenue Web3 projects, leveraging its large daily active user base.

Trend 3: Entry of Global Financial Giants: Mainstream Recognition of the TON Ecosystem

As the TON platform matures and cross-chain functionality is realized, it may attract the attention of traditional financial institutions, prompting them to explore blockchain technology and collaborate with TON.

Innovation in Financial Services: Financial institutions may migrate their services to TON or collaborate with TON, leveraging its low-cost and high-efficiency advantages.

Stablecoins and Financial Products: Financial institutions may develop new loan, insurance, and investment products on TON, or even create stablecoins pegged to specific assets.

Trend 4: Shift in Investment Logic: Non-Essentiality of Token Economics

The maturation of the TON ecosystem may change the investment logic in the primary market, making tokens no longer a necessary option for crypto projects.

Technology and Business Models: Projects may rely on more mature technologies and business models to attract users and investors, rather than solely depending on token economics.

Regulatory Adaptability: Projects that do not issue tokens may find it easier to adapt to regulatory environments, avoiding potential legal risks.

Investment Analysis: Future assessments of TON ecosystem projects may focus more on actual user data and business performance, such as daily active users (DAU), user retention, and average revenue per user (ARPU), rather than merely on token unlocking and distribution.

These trends indicate that the TON ecosystem will not only solidify its position in the crypto space but may also attract a broader user base and participation from traditional financial institutions, ushering in a new phase of development.

Conclusion

The rise of the TON ecosystem signals the future development direction of cryptocurrencies and blockchain technology. With the deep integration of Telegram and the innovative drive of TON, we foresee the formation of a brand new ecosystem that will not only change our understanding of financial services, social interactions, and digital assets but also bring unprecedented convenience and opportunities to global users.