Introduction

Yesterday, according to the latest news from Coindesk, a new project called the TON Application Chain (TAC) is building an L2 network for the TON blockchain ecosystem. The TON ecosystem is known for its association with the popular messaging application Telegram. The project is supported by The Open Platform, an investor focused on the TON blockchain ecosystem, and will rely on Polygon technology, which focuses on Ethereum Layer 2 development. The team announced this news at the Ethereum Community Conference (EthCC) held in Brussels, Belgium, on Tuesday.

This development raises many questions: why choose to develop an L2 network when the current development of the TON chain itself has not met expectations? Is this a forced move or a deliberate choice? In recent years, the TON chain (The Open Network) has rapidly risen in the blockchain world, attracting a large number of users and developers with its high performance and low fees. However, beneath this prosperous surface, the TON chain's ecosystem is actually filled with bubbles and faces many challenges. Despite the significant technical advantages of the TON chain, its development is limited by a major issue: there is almost no VC funding for TON chain projects. This article will delve into the reasons for this phenomenon from two aspects: the current status of TON chain users and the state of the ecosystem, and propose solutions to help the TON chain achieve true sustainable development.

1. User Status

User Stickiness Overestimated

As shown in Figure 1.1, the number of daily active addresses on the TON chain has shown significant fluctuations over the past six months, steadily rising from about 150,000 in the early stages to a peak of about 450,000 in March, followed by a decline and fluctuations until it reached another peak in May before gradually decreasing to about 367,613; the monthly active address count shows an overall upward trend, gradually increasing from a low level, peaking at about 3,495,180 in June before slightly retreating.

Generally, we calculate user stickiness by dividing the daily active users (DAU) by the monthly active users (MAU). User stickiness is typically used to measure the degree of user dependence on the platform and usage frequency. Higher user stickiness means users frequently use the platform, demonstrating higher loyalty and dependence, while lower user stickiness may indicate that users do not use the platform frequently enough, resulting in lower attractiveness.

The user stickiness of the TON chain is 0.105, indicating a low penetration rate in the market. The relatively low user stickiness means that although the monthly active user count of the TON chain has significantly increased, the proportion of daily active users is low, suggesting that the actual profitable user base is lower than market expectations. This low user stickiness also reflects a low level of daily dependence on the platform, impacting long-term user retention and the stable development of the ecosystem.

Source: Tonstat Figure 1.1

2. Ecosystem Status

Lack of "Paid" Interaction Data

Many popular projects on TON face a common problem: although user numbers, daily active users (DAU), retention rates, and other data perform very well, they lack actual profitability. As shown in Figure 2.1, GameFi projects like Hamster Kombat, Pixelverse, and Yescoin are almost all zero-play games, which excel in attracting users and maintaining user activity, seemingly thriving on the surface. However, these projects have no actual revenue, making it difficult to match user data, which raises questions about the sustainability of the projects.

One major reason is that many key actions occur in Telegram mini-programs, which are essentially web2 products, meaning they cannot be verified through on-chain data. This situation leads to two main problems. First, due to the inability to track on-chain transactions and user behavior, the true activity and user engagement of the projects are difficult to assess accurately. Second, off-chain behavior makes revenue flow and monetization models opaque, preventing investors and other stakeholders from clearly understanding the actual profitability and cash flow of the projects.

In this context, although the surface user data of the projects looks impressive, investors and VCs are concerned about their actual value and investment returns. The lack of a clear profit model and verifiable revenue data makes it difficult for these projects to attract long-term capital investment.

Source: Telegram Figure 2.1

Insufficient Ecosystem Diversity, GameFi Dominates

Currently, although the TON blockchain ecosystem has achieved significant growth in infrastructure and project numbers, it does not exhibit the same level of ecosystem diversity as ETH or SOL. As shown in Figure 2.2, according to Ton.app data, there are 938 projects in the TON ecosystem, with 60% of them emerging in the past eight months. However, nearly 20% of these are game projects.

However, most VCs are concerned about the short lifecycle and uncertain investment returns of these small games. Many of the mini-games in the TON ecosystem are similar to WeChat mini-programs, with short lifecycles that quickly monetize and then disappear, making it difficult for VCs to achieve positive investment returns.

Source: Ton.app Figure 2.2

Main Reasons: Incompatibility with EVM, Limited Programming Languages Available

The TON ecosystem team faces the challenge of lacking EVM compatibility. The TON Virtual Machine (TVM) is not compatible with the Ethereum Virtual Machine (EVM) because TON adopts a completely different architecture (TON is asynchronous, while Ethereum is synchronous). Therefore, the TON ecosystem does not support development in Ethereum's Solidity programming language. According to a 2023 developer survey report (with over 90,000 developers participating), Rust is the most favored language, with over 80% of developers wishing to continue using it. 46.4% of developers expect to use Solidity.

The three programming languages available on TON are Fift, FunC, and Tact. FunC is a low-level language similar to Lisp and serves as the primary programming language for TON smart contracts, focusing on efficiency and flexibility. This low-level programming language allows developers to manipulate memory directly and manage resources finely. However, due to the low-level nature of FunC, developers need to manage memory manually and handle low-level operations, which places high demands on their programming skills and security awareness. A slight mistake could lead to issues like memory leaks and buffer overflows, resulting in potential security vulnerabilities in smart contracts.

Tact is a higher-level language but has considerable complexity and difficulty in programming. Fift is merely a low-level assembly and debugging language, suitable for low-level debugging and testing of smart contracts, but it is still in its early stages, with tools and documentation not yet complete.

Overall, the development difficulty of the TON chain is very high; typically, three people writing EVM code can accomplish the work of one person on the TON chain, and the development cycle is slow and long. In a blockchain environment where time is measured in seconds, this leads many developers on the TON chain to be reluctant to settle down and solidly develop products.

3. Solutions

1. TON Chain's L2------TVM

In the past year, the cryptocurrency field has witnessed a rapid development of a series of Layer-2 solutions. In August, the cryptocurrency exchange Coinbase launched the "Base" blockchain, integrating Optimism's OP Stack on Ethereum, leading this trend. Subsequently, protocols like Celo and Worldcoin also announced their plans to launch Layer-2 Rollups with OP Stack on Ethereum. The cryptocurrency exchange OKX also launched an Ethereum Layer-2 called "X Layer" in April, utilizing Polygon's CDK.

In contrast, if the TON chain can launch its own Layer-2 solution—TVM—and be compatible with Ethereum's EVM, this compatibility would provide great convenience for developers, lowering the difficulty of writing code and allowing them to easily migrate smart contracts and applications from the Ethereum ecosystem to the TON chain. This not only simplifies the development process but also significantly reduces development costs and time. At the same time, the high performance and low fee characteristics of the TON chain further enhance its attractiveness, providing developers with a more efficient and economical development platform.

By being EVM-compatible, the TON chain can not only leverage existing Ethereum development tools and infrastructure but also attract more Ethereum developers into the TON ecosystem. This strategy not only helps expand the ecosystem diversity of the TON chain but also promotes the birth of more innovative projects, laying a solid foundation for the continuous development of the TON chain.

2. Shift Focus to Infrastructure Development

Developers of the TON chain should focus on infrastructure projects within the TON ecosystem. Although the market has high expectations for the TON ecosystem, unless more projects capable of creating turning points emerge, the TON ecosystem may struggle to continuously attract investors like other fleeting projects.

Infrastructure projects are the core of any blockchain ecosystem, providing solid technical support for the entire ecosystem. Strengthening infrastructure development can not only enhance the overall performance and reliability of the TON chain but also provide developers with a better development environment. For example, developing more powerful node software, optimizing consensus algorithms, improving network throughput, and reducing latency will directly enhance the competitiveness of the TON chain.

Moreover, focusing on infrastructure projects helps attract more investors. Investors are typically more interested in projects with long-term development potential, and solid infrastructure is a key guarantee for the long-term development of projects. By enhancing infrastructure development, the TON chain can demonstrate stronger technical strength and development potential, thereby gaining the trust and financial support of more investors.

4. Conclusion

The development of the TON chain in the blockchain ecosystem is filled with opportunities but also faces many challenges. Although significant growth has been achieved in infrastructure and project numbers, the TON ecosystem still shows obvious deficiencies in user stickiness, profitability, and ecosystem diversity. Low user stickiness, lack of actual revenue, and the opacity of off-chain behavior make it difficult for the TON chain to continuously attract long-term investors.

At the same time, the types of projects in the TON ecosystem are singular, mainly concentrated in the GameFi field, with short lifecycles and uncertain investment returns. The main reasons behind these issues are the incompatibility of the TON chain with EVM and the complexity of existing programming languages, leading to high development costs and long cycles, further restricting the diversity and innovation capability of the ecosystem.

To break through these dilemmas, the upcoming launch of the EVM-compatible Layer-2 TVM by the TON chain is a feasible solution that simplifies the development process and attracts more Ethereum developers. At the same time, developers should shift their focus to infrastructure projects, enhancing the overall competitiveness and attractiveness of the TON chain through improved technical strength and development environment. Only through these strategic adjustments can the TON chain achieve true sustainable development and avoid becoming a fleeting project.