Following the launch, users can buy, hold, and transfer tokenized versions of blue-chip stocks, including Tesla (TSLAx) and Nvidia (NVDAx), across the TON Ecosystem.
The Kraken-owned tokenized equities framework, xStocks, is expanding its reach to the Open Network (TON) ecosystem. The platform has announced it will launch tokenized U.S. equities on the TON blockchain, supported by integration with Telegram’s non-custodial wallet, Wallet.
According to a press release sent to CryptoPotato, the launch will give Telegram users on-chain, self-custodial access to U.S. equities alongside hundreds of cryptocurrencies, all directly within the app.
xStocks to Launch on TON Blockchain
Following the launch, users can buy, hold, and transfer tokenized versions of blue-chip stocks, including Tesla (TSLAx) and Nvidia (NVDAx), across the TON Ecosystem. xStocks will expand directly into TON Wallets as well, extending user access to stocks and exchange-traded funds (ETFs).
Telegram’s Wallet initially launched stocks and ETFs in late October. The initiative garnered significant interest from users despite being available to a select number of countries. The latest development is expected to accelerate the growth as xStocks is integrated into TON Wallet.
“Bringing xStocks fully onchain in TON Wallet represents a major advancement for real-world asset adoption on TON…This breakthrough delivers real, tangible financial utility to everyday users and cements TON as the leading blockchain for bringing regulated assets onchain. It moves the entire ecosystem forward and accelerates the path toward mainstream, borderless finance,” commented TON Foundation President and CEO, Max Crown.
xStocks Continues Expansion
Since Kraken launched xStocks in partnership with Backed Finance in late June, the platform has rapidly expanded. Already available on the Ethereum and Solana blockchains, TON will be the third network to witness the platform’s deployment. The tokenized equities platform is working towards a multichain future offering global accessibility and interoperability.
xStocks has amassed more than $180 million in assets on-chain, with almost 50,000 unique wallet addresses. With the arrival on TON, it remains to be seen how much growth will be recorded in the coming months.
Kraken’s co-CEO, Arjun Sethi, said: “For the first time, millions of people gain on-chain access to U.S. equities inside Telegram with the same ease as sending a message. Instantly, globally, and without traditional gatekeepers. This is the real promise of tokenization. As financial assets move onto open networks, they become neutral, composable building blocks that anyone can use.”
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Meanwhile, Kraken is working toward acquiring Backed Finance to unify the issuance, trading, and settlement of tokenized equities on xStocks. This is part of the exchange’s expansion plans.
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One thing that Telegram mini-games proved is that crypto adoption doesn’t necessarily start by pushing complex technologies and burdensome onboarding processes that considerably hinder user experience.
With just a few mechanics and clear in-game economies and rewards, Telegram-based crypto games made headlines throughout 2024, creating a fuss on social media and contributing a large chunk of growth to Telegram’s user base.
All of this is thanks to The Open Network (TON), one of the largest blockchain ecosystems in the DeFi space. But is it just mini-games? No, it’s a complex system with sophisticated mechanisms tailored to developers’ demands. From liquid staking protocols to building a DAO or a Domain Name Service (DNS), TON has become a Web3 powerhouse.
In the following guide, you’ll learn not only how it works but also all the key components that sustain the ecosystem and make it unique in the crypto space. You’ll also learn about the most popular DeFi projects and its flagship coin, Toncoin.
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What Is The Open Network (TON)?
The Open Network (TON) is a blockchain platform designed for seamless integration with other blockchain systems, aiming to make exchanging digital assets, such as cryptocurrencies and non-fungible tokens (NFTs), as straightforward as everyday messaging.
Initially developed by Telegram, the messaging app developed and led by brothers Pavel and Nikolai Durov, TON has evolved into a next-generation blockchain focused on speed, scalability, and user accessibility.
Quick History Recap
TON’s origins trace back to Telegram’s vision of creating a blockchain that could support its vast community and enhance the app’s ecosystem with a platform capable of handling secure and rapid transactions.
While it was a sound project at the beginning, regulatory obstacles didn’t take long to kick in. TON was originally called Telegram Open Network and raised over $1.7 billion through a private token sale in 2018. However, a year later, the US Securities and Exchange Commission (SEC) filed a lawsuit against Telegram, alleging that the token offering was an unregistered securities sale.
This caused Telegram’s withdrawal from the project, handing out the development of the blockchain to the community, which renamed it The Open Network. And while TON operates independently from Telegram, it maintains ties with the messaging app. A lot of the crypto mini-games built on TON are deployed on Telegram, seeing massive success for tokens like Notcoin (NOT) and Catizen, two popular tap-to-earn games that massively boosted Telegram’s user base, which is nearly one billion users worldwide.
How Does TON Work?
TON’s architecture is nothing short of simple. It is built to be highly scalable, fast, and interoperable, using a sophisticated combination of a masterchain-workchain structure, dynamic sharding, and a consensus mechanism with Byzantine Fault Tolerance (BFT) properties.
Overall, TON is a powerful platform for dApps and decentralized services. Let’s examine it.
Masterchain and Workchains
This is where things get complicated, but let’s dive deep into it.
TON employs a multi-layered structure consisting of several chains that can communicate with each other. All chains on TON are referred to as a workchain, and there are only two operational workchains: The Masterchain and the Basechain.
The Basechain is where transactions between actors are settled every day. The Masterchain is basically the network’s central ledger that stores block headers of all accompanying Workchains. In other words, the Masterchain maintains the network’s overall state and managing crucial functions such as protocol changes and validator elections.
On the other hand, Workchains are individual blockchains within the TON network. Each Workchain operates independently and can handle specific applications or use cases, providing flexibility and specialization within the network.
Moreover, TON can support 2^32 (approximately 4.3 billion) workchains, but again, there are only two operation ones. You could theoretically build a workchain, but it’s quite complicated and expensive—and you’d need ⅔ of votes from validators to approve it.
Sharding Technology
To enhance scalability, TON uses advanced sharding techniques. Dynamic sharding allows TON to automatically split and merge shardchains based on transaction volume. This ensures that performance remains optimal and prevents any potential bottlenecks.
TON also leverages horizontal scalability, which means that by adding more shards, the network can handle increased transaction volumes without compromising overall performance. It’s essentially an adaptable system that can remain sustainable even as demand grows.
TON’s Proof-of-Stake Consensus
As mentioned, TON leverages the Proof-of-Stake (PoS) consensus mechanism that incorporates Byzantine Fault Tolerance (BFT) properties, which means the network can achieve consensus even when some malicious actors are present, ensuring uptime, reliability, and security. Let’s expand a bit more on this and explain it simply:
Most honest nodes on TON can continue to process transactions and maintain the network’s integrity even if some nodes are compromised or acting maliciously.
There’s also slashing, which cuts malicious actors’ staked tokens in half, so it’s quite a powerful economic disincentive.
To wrap it up, honest nodes can agree on the state of the network even when other not-so-honest nodes are conflicting information.
Validator nodes play a crucial role in this process by staking TON coins to participate in the consensus mechanism, effectively vouching for their reliability and trustworthiness. This process ensures that only credible participants contribute to maintaining the network’s integrity.
Key Features
TON is designed to be both scalable and fast, capable of processing thousands of transactions per second. The network achieves a finality time of just five seconds, making it one of the fastest blockchains in operation.
Additionally, TON emphasizes cross-chain compatibility, which allows for seamless interaction with other blockchain networks. This interoperability makes it easy for different networks to communicate and exchange data, enhancing the overall utility of the TON ecosystem.
Instant Hypercube Routing
Hypercube is another innovative feature of TON that ensures efficient data exchange between any two blockchains in the network, regardless of their size. The time taken to transfer data has a logarithmic relationship with the number of blockchains, allowing TON to scale to millions of chains without compromising processing speed.
TON Virtual Machine
The TON network also offers robust smart contract capabilities thanks to the TON Virtual Machine (TVM), designed to execute smart contracts efficiently and make it suitable for a wide range of dApps.
For the developers reading this, TON supports multiple programming languages, including popular options like Fift and Solidity, for smart contract development, providing you with the flexibility to choose the language that best suits your needs.
TON Network Governance
The TON Foundation plays a significant role in driving the network’s growth through initiatives such as ecosystem incentives and developer grants. These efforts ensure that the network continues to develop, attract talent, and remain innovative.
However, TON’s governance system works slightly differently than a typical decentralized autonomous organization (DAO). This is where TON.Vote kicks in—a decentralized on-chain governance platform tailored to the TON ecosystem.
Unlike platforms like Snapshot.org, TON.Vote conducts all voting directly on-chain, which significantly enhances transparency and security. The platform features a decentralized and trustless voting mechanism where each proposal triggers the deployment of a smart contract. All votes are securely stored on IPFS, making them independently verifiable.
TON.Vote supports voting options such as “yes,” “no,” and “abstain,” so it’s quite a straightforward decision-making process for the community.
Ultimately, updates or modifications to the TON blockchain require approval from at least 66% of the validators. This high approval threshold ensures that changes to the network receive substantial support from the community.
Distribution of network nodes globally. Source: Ton.org
While TON.Vote is not exactly a DAO; it supports the creation and management of multiple DAOs across its ecosystem.
Overall, the idea is to provide a structure that permits better flexibility, as different projects and communities can establish their own governance mechanisms. If you have a project looking to build a DAO, then the platform offers the tools necessary to implement such governance functionality.
Other Important TON Features
It’s difficult to cover all of TON’s integration, features, and mechanisms due to its fast-paced growth, but there are a few components that we can’t miss and are vital to the TON ecosystem:
TON Storage: a decentralized file storage solution within the TON ecosystem designed to offer a secure, efficient, and flexible way to store data. It supports both individuals and businesses, providing scalability, security, and reliability in a decentralized environment.
TON Proxy: an anonymity-focused network layer within TON designed to protect your privacy and enhance security. It offers features that help bypass censorship and maintain anonymity while interacting with the TON network. This app routes your traffic through encrypted channels, effectively disguising your IP address and transmitted data. It’s a developer’s best friend when it comes to building secure dApps with enhanced privacy features.
TON Payments
TON Payments is a layer-2 solution built on top of the TON blockchain, designed specifically for handling high-frequency, low-value transactions efficiently. It works quite similarly to Bitcoin’s Lightning Network, as it uses payment channels to process transactions off-chain, settling them later on the main blockchain.
How Do TON Payments Work?
As mentioned, TON Payments enables near-instantaneous transactions by processing them off-chain, significantly speeding up transaction times compared to on-chain settlements. And yes, that includes settlements on Telegram-based crypto games.
TON Payments operates through a straightforward three-step process.
First, a channel is opened by creating a smart contract on the TON blockchain, where both parties deposit their initial balances.
After that, the parties can conduct unlimited off-chain transactions between themselves, bypassing the need to interact with the main blockchain for each transaction.
Finally, when both parties decide to settle, they close the channel, and the final balances are recorded on the blockchain, completing the process.
One of the standout advantages is that 1) it has a low-cost structure, making it ideal for micropayments, supporting new business models that rely on frequent, small-value transactions, and 2) there are no fees for individual transactions within an open payment channel, with fees only incurred when opening or closing a channel.
However, do keep in mind that the system’s effectiveness depends on network effects, meaning it becomes more efficient with widespread adoption, which might take time to achieve.
TON DNS
TON DNS (Domain Name System) is a decentralized service that allows you to assign easy-to-remember names to blockchain entities, replacing complex cryptographic addresses for smoother interactions within the TON ecosystem, similar to how Ethereum Name Service (ENS) works.
TON DNS is managed through smart contracts; one central smart contract controls the overall system, while individual domain contracts handle specific domain names and subdomains, allowing for automated, secure management.
You can assign these names to various blockchain elements such as crypto wallets, smart contracts, TON Sites, and network nodes, making them easier to manage and remember.
How Does TON DNS Work?
The system operates in a structure similar to traditional DNS. There are top-level domains (TLDs) managed by the TON Foundation, like “.ton,” “.wallet,” and “.surf.” Under these, you can register your own second-level domains, such as “myname.ton,” and create further subdomains like “blog.myname.ton.” This layered structure provides flexibility and customization for your needs.
If you’re planning to host a website on the TON network, TON DNS provides decentralized domain names. This integration adds mandatory encryption and authenticity verification, ensuring that TON Sites remain secure and credible, with the added advantage of supporting subdomains.
Further, TON DNS is designed with a strong emphasis on decentralization and security. It uses cryptographic proofs to verify domain authenticity, ensuring secure and trustworthy name assignments. Naturally, all data storage is decentralized to ensure the system remains tamper-proof and reliable.
Use Cases of TON DNS
NFT-Based Domains: Domains within TON DNS, specifically those ending in “.ton,” function as NFTs. This means they can be owned, transferred, and traded like any other NFT, giving you flexibility in how you manage your domain names.
Resolution Process: The process for resolving names within TON DNS involves a network of Subresolver Managers. Domain names are broken down into individual parts and are resolved step-by-step until the final blockchain address is found. This decentralized process ensures accurate and efficient name resolution.
Developer Tools: Developers can interact with TON DNS using tools such as the JavaScript SDKs TonWeb and TonLib. There is also support for using lite-client and tonlib-cli for DNS queries, making it accessible for integrating TON DNS functionality into applications.
In summary, TON DNS is a fundamental piece of the TON ecosystem, offering simplicity and decentralization for domain services. It makes interacting with blockchain elements far more intuitive.
Why Is TON Attractive for Crypto Game Developers?
If you’ve been in the crypto space for a while, then you’ve probably come across Telegram mini-games like Notcoin (NOT) and Catizen AI (CATI). These and dozens of other crypto games have been developed on TON.
What makes TON attractive to crypto game developers—besides offering scalability and high throughput suitable for large player communities—is that games can be launched directly within Telegram, making access easy and immediate. This is important because developers have access to a vast player base of over 900 million, offering immense growth potential.
Moreover, since TON supports a wide variety of digital assets, coupled with cross-chain interoperability, it’s possible to create multiple monetization pathways by introducing NFTs, in-game tokens, paid features, etc.
Also, the low transaction fees allow in-game microtransactions to remain affordable even during high activity periods (thanks to sharding and the BFT algorithm we discussed above).
Toncoin (TON) Tokenomics
Toncoin (TON) is The Open Network’s utility currency, and it works similarly to many other PoS coins. It serves various purposes within the ecosystem, starting with transaction fees and smart contract operations:
Transaction Fees: These are used to pay transaction fees when conducting payments or executing smart contracts on the TON blockchain. It also serves as an incentive for developers to support the growth of the TON ecosystem.
Staking and Network Security: Validators can stake Toncoin to secure the network. All validators participating in block production and network security receive Toncoin as a reward.
Governance: Naturally, it’s also the governance token, giving holders a say in network upgrades and development decisions, all carried out through TON.Vote.
Payment for Decentralized Services: You can use Toncoin to pay for different decentralized services within the TON ecosystem, such as TON Proxy, TON Storage, and TON DNS. You can also use it to pay for Telegram Premium subscriptions and obtain anonymous phone numbers through Telegram.
DeFi Applications: It also acts as collateral in various dApps on the TON ecosystem, enabling access to decentralized lending, borrowing, and other financial services.
Ok, so what exactly is Toncoin? It’s a deflationary currency in which a portion of the transaction fees paid in Toncoin is burned, creating a deflationary effect that can increase the token’s scarcity and value over time.
Quick facts:
Reached an all-time high of $8.25 on June 15.
It’s up nearly 1,000% since it launched on September 21, 2021.
Circulating supply is over 2.5 billion (doesn’t have a max supply).
About 98.55% of tokens were made available for mining, while the team retained 1.45%. Distribution was achieved through decentralized mining.
In the last six months, the burn rate has seen a significant spike, peaking at 27.4K in April of 2024. This was a period of high activity for TON, followed by a sharp decline in the burn rate, suggesting a change in network dynamics (i.e., lower network activity post-hype), only to see a more gradual uptick in the middle of August all the way to September.
The number of accounts has also been gradually growing in the last six months, reaching over 87M in September. Accounts refer to any type of smart contract within the TON blockchain—NFT, staking contracts, etc. Moreover, the number of on-chain activated wallets reached nearly 20M in the same month.
Top DeFi Projects on The Open Network
Liquid staking projects account for most of the capital in TON’s cumulative value, starting with Tonstakers. However, TON has also seen several derivatives protocols, lending and borrowing platforms, and decentralized exchanges being built on top of its network. Let’s review them below.
Tonstakers
Tonstakers is an open-source, decentralized liquid staking platform on the TON network. You can stake your TON coins and receive a liquid staking derivative token (tsTON) in return. This token allows you to use staked assets in DeFi platforms while earning staking rewards, with the option to exit with more TON than initially staked.
Founders: Founded by Nikolai Durov, the elder brother of Telegram founder Pavel Durov.
Investors and Backers: It reached over $300M in TVL by June 2024, receiving funding from CoinFund, Delphi Ventures, Karatage, and the TON Foundation.
Ston.fi
STON.fi is a decentralized automated market maker (AMM) exchange built on the TON blockchain. It offers nearly zero fees and low slippage for trading TON-based tokens, ensuring efficient and cost-effective transactions. STON.fi allows direct cross-chain swaps, broadening trading options, and is integrated with Telegram for convenient DeFi access.
Founders: Founded by Slavik Baranov (CEO), along with Mike Fedorov and Stanislav Bazylevich.
Investors and Backers: Backed by the TON Foundation, Karatage, Delphi Ventures, and CoinFund.
DeDust
DeDust is a decentralized exchange (DEX) on TON, allowing you to trade cryptocurrencies directly from your wallet. It leverages the DeDust Protocol 2.0, benefiting from TON’s high scalability and throughput for fast, low-cost transactions. It offers both volatile pools and stable swaps to suit different trading preferences.
Founders: Created by Nick Nekilov, who also developed Scaleton.
Investors and Backers: There’s no publicly available information on funding.
Cygnus
Cygnus is a stablecoin protocol built on short-term US debt assets, bridging non-EVM systems like TON with EVM ecosystems. It offers yield generation and liquidity validation, enhancing cross-chain interactions. To earn rewards, you can engage in staking and liquidity provision.
Founders: Established by Eric Cheung, an investor and blockchain entrepreneur.
Investors and Backers: No public information on investors, but it’s active on social media, sharing partnerships and milestones.
EVAA Finance
EVAA is a lending and borrowing protocol integrated with Telegram, allowing you to manage assets directly. It offers features suitable for both seasoned DeFi participants and newcomers, enabling lending, liquidity provision, and token-based governance.
Founders: Founded by Artem Lazarev, with contributions from Vladislav Blizniuk.
Investors and Backers: Raised around $820K in a public sale and funding led by TONcoin.fund and WAGMI Ventures.
Bemo
Bemo is another liquid staking platform on TON, where you deposit TON tokens and receive stTON tokens in return. These tokens can be traded or used in various DeFi applications while earning staking rewards.
Founders: Pavel Altukhov is the founder and CEO with over 20 years of experience in asset management.
Investors and Backers: No public information available.
Storm Trade
Storm Trade offers a decentralized trading experience on the TON blockchain with features like leverage, isolated margin, and gamification. It supports crypto, stocks, commodities, and forex, allowing flexible trading via a web app or Telegram bot.
Founders: Led by Denis Vasin, a software engineer with extensive IT experience.
Investors and Backers: Raised over $400K from Magic Square, Sky9 Capital, BlackDragon, and TONcoin.fund.
So, as you can see, there’s a wide variety of projects on TON. From liquid staking and decentralized exchanges to cross-chain swaps and community-driven economies, there’s a lot to explore if you’re keen on this particular ecosystem.
TON Roadmap and Social Media Presence
When reviewing TON’s roadmap, you can see it’s divided between TON Blockchain, TON Proxy, TON Payments, and TON Storage.
The roadmap provides a straightforward view of the project’s current status and some of the potential network changes being discussed by the community.
Further, you can rest assured that TON is quite active on social media. It hosts live spaces, promotes its DeFi ecosystem, and often provides guides and updates for the TON community. Moreover, the project regularly promotes its CTF (Capture the Flag) competition for TON developers. This is a multi-day event hosted by the TON Foundation, Tonbit, and TONX Studio, in which developers solve complex challenges to earn flags, ultimately competing to win prizes of over $10k or more.
TON Developers, this is your moment!
Just announced: the Capture The Flag competition on #TON – TON CTF! Granted by TON Foundation and organized by Tonbit & TONX Studio.
Scalability: By utilizing advanced sharding techniques, TON can process millions of transactions per second, solving one of the biggest challenges traditional blockchain networks face.
Interoperability: Designed to interact effortlessly with other blockchain networks, TON opens up opportunities for cross-chain exchanges and collaborations.
Decentralized Services: TON isn’t just a blockchain; it offers additional decentralized services like TON Storage for file management, TON Proxy for privacy, and TON Services to support decentralized applications (DApps).
Rapid Transactions: Thanks to its unique consensus mechanism, TON delivers transaction speeds that are significantly faster than many established blockchain platforms.
Closing Thoughts: What Makes The Open Network Stand Out?
The TON ecosystem stands out as one of the most dynamic blockchain protocols in 2024.
By providing support for developers with tools and resources, coupled with state-of-the-art technologies that boost scalability and throughput, TON has drawn in millions of users and expanded beyond just mini-games to become a comprehensive Web3 platform.
Its ability to offer advanced scalability, cross-chain interoperability, and integration with services like Telegram showcases its potential to become a leading force in the crypto space.
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The Open Network (TON), a layer-1 blockchain linked to the social platform Telegram, has attained a new milestone in its history.
According to data from a CryptoQuant analyst, the L1 blockchain reached 100 million unique wallet addresses with non-zero balances. This marks a 95% surge in active users since the start of the year, which was “only” 4.3 million.
What’s Behind TON’s Growth?
TON’s surge in active users stems from its ties with Telegram. Although the social messaging platform initially created the TON blockchain under the name Telegram Open Network, plans to integrate it into its ecosystem fell through, forcing the abandonment of the blockchain project. A new team of developers picked up from where it left off.
Telegram revived its interest in TON in September 2023, launching its crypto wallet on the L1 blockchain. Fast-forward to this year, and various tap-to-earn gaming projects began emerging on Telegram. The catch was that players would perform specific tasks to earn tokens claimable via the TON mainnet.
One of the first clicker games to debut on the L1 network was Notcoin, which attracted millions of users. Other projects, such as Dogs and Hamster Kombat, soon emerged, capturing the attention of millions of people. More Telegram-based games have flooded the social app, welcoming more users to join their ecosystems.
CryptoQuant analyst stressed that Telegram’s ties with TON have helped onboard millions of users into the crypto industry.
Will Price Follow?
Despite TON’s latest milestone, the network’s native coin, Toncoin, has failed to impress recently. At the time of writing, the coin sold for $5.19, representing a 1.4% price decrease within the past 24 hours. The current price is a 37% drop from its all-time high of $8.24, seen in June 2024.
Last month, CryptoPotato reported that 80% of Toncoin holders are at a loss due to the coin’s sharp decline. The crypto asset will likely once again see price increases as its ecosystem grows and leading cryptocurrencies like Bitcoin unlock higher prices.
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The Open Network (TON) has continued to record outstanding growth as the protocol recently saw its active addresses outperform leading blockchains in the industry.
According to data from the market intelligence platform IntoTheBlock, the number of daily active TON addresses surged to 3 million in the first week of September.
Per the data, this figure exceeded the number of active addresses recorded on major Layer 1 networks, including Bitcoin and Ethereum. TON’s popularity over the past few months has attracted increasing attention from developers, investors, and users alike, further solidifying its position as a rising contender in the blockchain space.
USDT Trading Volume on TON Surges
In addition to the growing number of active addresses, TON has experienced an increase in on-chain trading volumes, especially in the stablecoins market.
The blockchain is currently among the top networks with the highest USDT trading volumes. According to IntoTheBlock, TON recorded an impressive $1.2 billion USDT trading volume, with 1.5 million unique holders on Sept. 9.
Tron, however, remains the biggest blockchain for USDT trading, with a trading volume of $98.1 billion recorded on Sept. 9. It was followed by Ethereum with $34.3 billion.
According to analysts, the surge in TON’s USDT trading highlights growing interest and adoption among TON users. Earlier in April, Tether, the issuer of USDT, launched the stablecoin on TON.
The Biggest Growth Opportunity
The rapid adoption of popular TON-based decentralized applications (dApps) like Hamster Kombat and Notcoin has contributed significantly to the network’s growth. These tap-to-earn projects have increased user activity on the TON blockchain over the past few months.
Consequently, TON received a $30 million investment from crypto exchange Bitget and Foresight Ventures yesterday to boost the development of tap-to-earn projects.
As the network’s popularity continues to soar, market experts believe that the TON ecosystem is “the biggest growth opportunity” in the crypto market this year.
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High centralization can lead to increased influence by a few entities, potentially undermining the decentralized ethos that crypto strives to uphold. However, centralization continues to be a major bone of contention in space.
As such, popular project tokens – Polygon (MATIC) and Shiba Inu (SHIB) – have emerged as the leading examples of high concentration of holdings among top wallets.
Centralization Concerns in MATIC and SHIB
According to the data shared by Santiment, Polygon’s top ten wallets collectively control an astonishing 69.4% of its total market capitalization, making it the most centralized among major altcoins. Similarly, Shiba Inu’s top ten wallets hold 61.2% of its market cap.
This significant concentration raises critical questions about the impact on market stability and governance for these widely traded assets. This concentration can also exacerbate risks such as price manipulation and volatility, as large holders have the power to affect market dynamics more substantially than smaller investors.
Meanwhile, Uniswap (UNI) shows that 50.8% of its total market cap is held by the top ten wallets, indicating a significant concentration of power among a few holders. Closely trailing behind is the Pepe (PEPE) meme coin, with 46.1% of its supply concentrated in the top wallets.
Ethereum (ETH), despite its broad adoption and decentralized governance efforts, still sees 44.0% of its market cap controlled by the largest wallets, primarily due to staking in the ETH 2.0 contract, which centralizes significant amounts of Ether.
Tether (USDT), the most widely used stablecoin, has 33.1% of its supply in the hands of the top wallets, reflecting its widespread institutional adoption but also hinting at potential liquidity risks if these holders decide to move large amounts simultaneously.
Moderate Centralization in LINK and TON
Chainlink (LINK) and Toncoin (TON) show slightly lower concentrations, with 31.1% and 27.5% of their respective market caps held by the top ten wallets. For the former, this reflects the necessity of large holdings by nodes to secure the network, while Toncoin’s concentration is partly attributed to its recent growth phase, as per Santiment.
On the other hand, stablecoins like Circle’s USDC and Multi Collateral Dai (DAI) exhibit more decentralized holdings, with the top ten wallets controlling only 19% and 24.5% of their market caps, respectively.
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The popular messaging platform Telegram has revealed its plans to sell its surplus holdings of The Open Network (TON) tokens at below-market prices. This move comes after concerns were raised about the potential centralization of TON supply due to ad payments being exclusively accepted in TON tokens.
Telegram Addresses Concentration Concerns
As NewsBTC reported on February 28, starting in March, channel owners will have the opportunity to receive financial compensation for their content. All transactions, including payments and withdrawals, will be handled on the TON blockchain.
Telegram’s advertising platform will be available to advertisers in nearly one hundred new countries. With this expansion, channel owners will receive 50% of the revenue generated from ads displayed on their channels.
In response to concerns about the concentration of TON tokens with this new feature, Telegram CEO Pavel Durov announced plans to sell the company’s surplus holdings.
With ad payments in TON tokens potentially accounting for more than 10% of the TON supply at Telegram, Durov acknowledged the need for a solution to avoid centralization.
Telegram aims to limit its share of TON by selling the surplus holdings to long-term investors, ensuring a “healthier distribution” and a decentralized ecosystem. The tokens sold will be subject to a lockup and vesting plan ranging from 1 to 4 years.
To ensure a streamlined process for selling TON tokens, Telegram has set up a dedicated email address where interested large investors (with investments of $1 million or more) can express their interest, aiming to maintain stability and decentralization within the TON ecosystem.
TON Ecosystem Thrives
Despite the growing concerns, the TON ecosystem is showing encouraging signs of growth, as evidenced by recent data provided by Token Terminal. Market capitalization, trading volume, fees, and revenue have all increased significantly over the past 30 days. Additionally, active users have consistently grown daily, weekly, and monthly.
Over the past 30 days, the fully diluted market capitalization of the TON ecosystem has reached $13.83 billion, marking a significant 31.0% increase. Moreover, the token’s trading volume has seen a modest but steady 1.4% rise, reaching $1.21 billion.
Fees generated within the ecosystem have also experienced substantial growth, with an 80.9% increase over the past 30 days, totaling $860,490. The annualized fees have also surged, reaching $10.47 million, reflecting a 45.3% growth rate.
Furthermore, revenue generated within the ecosystem has followed a similar trajectory, with a significant 80.9% increase over the past month, amounting to $430,250. The annualized revenue stands at $5.23 million, indicating a promising revenue stream for the ecosystem.
Last but not least, the TON ecosystem has seen consistent growth in its user base over different periods. Daily active users have increased by 1.5%, reaching 33.66k, while weekly active users have experienced a growth rate of 19.6%, reaching 178.62k. Monthly active users also showed a positive trend, with a growth rate of 10.3%, reaching 412.39k.
TON is trading at $2,735, up 3% over the past 24 hours and extending its 34% rise over the past 30 days.
Featured image from Shutterstock, chart from TradingView.com
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