Author: Shigeru, CGV FOF

Entering every day of June 2024, the records created by TON are continuously being refreshed, whether it's the number of users, trading volume, or TVL:

• The number of daily active addresses of TON has exceeded $ETH for multiple consecutive days;
• The total value locked (TVL) of TON has surpassed 600 million USD, increasing 1000 times since 2024;
• Within 47 days, TON has issued 450 million USD worth of $USDT;
• Steve, the chairman of TON Foundation, proposed that the sign of large-scale adoption of encryption is the birth of the first TON mini application with 100 million Telegram users; Hamster Kombat achieved this the next day.

The CGV Research team believes that the arrival of TON summer 2024 is due to the dual benefits of "TON internal" and "TON external".

Internal Drivers of TON

• Wallet innovation: In July 2023, TON introduced new wallet payment functionality, allowing users to conduct various transactions and payments through the TON wallet, enhancing user experience. Subsequently, in September, TON launched TONSpace, a self-managed wallet that allows users to manage their private keys and assets independently. In December, a secondary entrance for wallets was added to the Telegram application, allowing users to use the TON wallet more conveniently within Telegram.

• Token locking strategy: In early 2023, the TON community and validators voted to freeze the wallets of inactive miners, which accounted for approximately 21% of the total supply, and these wallets will be locked until February 2027. In October, the community initiated the TON Believers Fund, a five-year locking plan where users can choose to donate or deposit their tokens into smart contracts. This action locked 26% of the supply, totaling approximately 47% of TON tokens being locked for three to five years, effectively reducing the circulating supply in the market, which is beneficial for the stability of token prices.

• Deployment of TON native USDT: In April 2024, Tether announced the introduction of USDT to the TON network, which added USDT-related trading and financial activities to TON, providing strong support for DeFi applications. The issuance of USDT on TON quickly surpassed Cosmos and Near, becoming the network with the third-highest USDT issuance, following Tron, Ethereum, Solana, and Avalanche.

• Breakthrough in blockchain performance: On October 31, 2023, TON achieved a peak of 104,715 transactions per second in a public performance live test, processing a total of 107,652,545 transactions. This performance, verified by Certik, marked TON as one of the fastest and most scalable blockchains globally.

• Market promotion: In the spring of 2024, by launching the #OpenLeague super league with a total prize pool of 150 million USD, TON attracted a large number of users and market attention. In addition, the profit-sharing strategy implemented jointly by the TON Foundation and Telegram, as well as the listing of Notcoin on several major exchanges, greatly enhanced its market performance and brand influence.

External Factors of TON

• Pantera's large investment: In May 2024, Pantera made the largest single investment in the history of TON network, which not only demonstrates recognition of TON's technology and market potential but may also attract more attention from capital, strengthening market confidence in the TON ecosystem.

• Global competitive environment and market demand: With Musk's X application plan to launch encrypted payment functionality in mid-2024, TON faces pressure from global competitors. In addition, the entire crypto market urgently needs new market narratives and development directions, and the innovative technology and applications of the TON ecosystem inject new vitality into the market.

• New narrative demand: The crypto industry needs new narratives and directions, and the growth in users and trading volume brought by the social fission and flywheel effect of the TON ecosystem provides new vitality to the market.

In conclusion, the CGV Research team believes that the TON ecosystem may demonstrate 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 One: The black hole effect brought by the full ecological expansion of Telegram

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

Upstream (infrastructure and development platform): TON provides powerful 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): Custom stablecoin solutions and micro-payment systems in the TON ecosystem, as well as the ability to seamlessly access mainstream crypto assets through the official cross-chain bridge, provide users with a one-stop asset management and trading platform.

Downstream (user adoption and market expansion): Telegram's massive user base provides TON with market access points, and through partnerships with financial institutions, media companies, and retailers, Telegram can integrate crypto technology into a wider range of economic activities.

Trend Two: Unregulated barriers + fastest public chain + flywheel effect, making the TON ecosystem limitless

TON's global service capability, unrestricted by specific country or regional financial regulations, combined with its high performance and the flywheel effect of user growth, indicates that the potential of the TON ecosystem may be limitless.

Traffic monetization: Telegram's traffic advantage will bring huge monetization potential to TON, especially in decentralized markets such as Fragment, which has already led to significant trading volume.

NFT market: The conversion of Telegram stickers into NFTs, traded on the TON blockchain, heralds a huge emerging market.

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

Trend Three: Involvement of global financial giants: Mainstream recognition of the TON ecosystem

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

Financial service innovation: Financial institutions may migrate their services to TON or cooperate 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 Four: Shift in investment logic: Non-necessity of token economy

The maturity of the TON ecosystem may change the investment logic of the primary market, making tokens no longer a necessity for crypto projects.

Technology and business models: Projects may rely on more mature technology and business models to attract users and investors, rather than solely relying on token economics.

Regulatory adaptability: Projects that do not issue tokens may be more adaptable to regulatory environments, avoiding potential legal risks.

Investment analysis: Future evaluations 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 just focusing on token unlocking and distribution.

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

Conclusion

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

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