Part 1 of my deep dive research series - TONCOIN
Can telegram leverage their 550 million + users to drive $TON to new heights??
The purpose of this deep dive series is to analyse a number of popular projects and rank them against a set framework. I outline my DYOR framework in the thread below.
As I complete each project, I will update and track scores on my google sheet. You can view for free below.
https://docs.google.com/spreadsheets/d/1mPGbrsSEqBCN4lTVIIfdu3UzhZVqGP6LWMXlJrWJ5RE/edit?usp=sharing
Let’s dive in…..
As of 20 Dec 2022
$TON
Price = $2.25
Market cap = $3.3b – Rank 22
Proof of Stake
All time high = $5.29 (-58 %)
All time low= $0.52 (+333 %)
The Open Network (TON) is a layer 1 blockchain solution developed in 2018 by the Telegram messenger team. The $TON coin is the principal cryptocurrency of this chain and is primarily used to for transaction fees, and as deposits for validators to secure the network.
TON is unique as it’s one of only a few cryptocurrencies that has operated as both PoW & PoS. In May 2020, the project nearly died as the team ceased development and agreed to an $18.5m settlement with the SEC regulators.
In order to allow the technology to live on the Telegram team put all the available coins of the network into smart contracts, which anyone could mine on equal terms.
The initial distribution of the $TON coin was almost accidental and is now labelled as IPoW- Initial Proof of Work.
Now the chain has fully transitioned to proof of stake and is well and truly alive and has been one of the best performing coins during the 2022 bear market.
Revenue
There isn’t a lot of available data about revenue generated by TON, but I expect it won’t be long before we see it on token terminal.
Similar to other Layer 1s, revenue and demand is primarily driven by transaction fees on the blockchain.
Demand for TON currently comes from
Transaction fees
Payments
Telegram/ TON domains
Whales club NFTs
Without a lot of data yet, I will have to give a 6 for Revenue.
Treasury
There isn’t a lot of information around the TON Foundation treasury size and composition.
However, they have got around $340m in the TONcoin and TAV fund which are available in the form of Grants and IDOs for up-and-coming TON projects to apply for.
Initial decentralized exchange offerings (IDOs) are enabled through Tonstarter- the first TON native launchpad for retail venture investing in tokens of promising projects.
Overall, I will score 6 for treasury.
Tokenomics
The initial supply of $TON was 5 billion coins. Supply is not capped and will inflate at approximately 0.6% per year.
These created tokens are used to reward validators for keeping the network secure. You can currently earn about 8.2% APY for staking.
If validators misbehave, then part or all of their stake can be slashed and equivalent TON burned. In turn, decreasing the supply of TON in circulation.
Coingecko supply stats (19/12/22)
Circulating supply = 1.47b
Total supply = 5.06b
Market cap = $4.1b
FDV = $14.07b
Market cap/ FDV = 0.29
8 for tokenomics. Relatively low inflation rate, only concern is sell pressure from TON foundation/ whales.
Locked up funds
The creation and initial distribution of TON was quite unique and similar to Bitcoin in some aspects.
June 2020, all Toncoin tokens (98.55% of the total supply) became available for mining. The tokens were then placed in special smart contracts, allowing anyone to participate in the mining. By 28th June 2022, the last Toncoin was mined, signalling the successful closure of TON’s initial distribution.
This meant that all tokens were distributed among tens of thousands of miners. The TON project chose not to hold an ICO, IEO, or any other type of token sale.
There is no vesting schedule to worry about. However, it is important to note that the early miners (Whales) own a significant portion of TON coins.
Overall, a 9 for locked up funds.
Use case
There are plenty of similar POS Layer 1s competing with TON for market share. TON's X-factor is it’s adoption potential through telegram messenger.
Currently there are over 550 million active Telegram users and this is growing rapidly.
Impressively, TON blockchain has already processed nearly 100 million transactions with over 1.7 million unique accounts- up 211% in the last 6 months.
Now you can seamlessly trade Toncoin between telegram users, this will promote adoption even further.
Recently TON launched DNS auctions where you can bid for popular Telegram domains.
Currently top auction is fetching 189,000 TON ($500k USD) for advisor.
Whale club NFTs are becoming increasingly popular with a floor price of 389 TON.
They are a utility enabled NFT that grants you membership to the Whales Club with the below features.
Toncoin has also just been listed on Defillama which is huge. As you can see, some impressive growth in TVL since listing.
The first Dex has also just been launched on TON blockchain- STON.fi
If Toncoin can leverage their adoption and growth through telegram messenger, the sky is the limit.
Giving them a score of 9 for use case.
Roadmap
2022 was a big year for TON with the introduction of TON Defi, Nominators, developers’ program, DNS and TON payments.
2023 goal is for Bitcoin and EVM Crosschain. It would be good to have a bit more information about long term plan/ vision.
6 for Roadmap.
Team/ funding
There are a few main organisations that are driving development- TON Foundation and TON Society.
TON prides itself as a decentralised, open-source community of experts so it is difficult to find any clear organisational structure.
However, I have listed below key people that seem to be actively involved in the project.
Anatoliy Makosov & Kirill Emelyanenko- Founding Devs
Steve Yun & Andrew Rogozov -Founding members of TON Foundation
Tal Kol & Oleg Andreev - TON ambassadors
Manuel Stotz & Bill Qian - Board members of TON Foundation
There is also a very engaged community of developers and projects building on TON. This includes the TON whales club whose team is listed below.
As I mentioned earlier, there is a community grants to emerging projects with a current fund of $340m. A strong initiative to encourage building on the chain.
Overall, an 8 for team and funding.
Summary
Overall, TON is a very promising project with some huge opportunities for adoption through leveraging telegram messenger. It has been one of the strongest performing coins through a pretty tough 2022.
While I don’t own any TON bags yet, it’s definitely on my watchlist and I will be keeping an eye out in 2023 for some better entry points.
Overall, project has scored a weighted average of 7.6 in my evaluation. What do you think of my scores?
I want to re-iterate that the purpose of this thread is for education and research - NOT investment or financial advice.
The current macro conditions are still very choppy with the risk of recession in 2023 looming and a tightening Fed so please be cautious out there frens.