In recent weeks, cryptocurrencies seem to have entered a phase similar to China’s stock market, referred to as a “technical sheep market.”

The concept of a “sheep market” was first proposed by the American “father of mutual funds,” Neuberger. It describes a market with an unclear direction, neither bullish nor bearish, where most stocks fluctuate around 10%. This market is challenging to navigate because it is difficult to identify good investment targets or find new ones, leading most investors to wait and see how the market develops.

Reflecting on the past few weeks, isn’t the performance of the cryptocurrency market quite similar to the stock market?

Fortunately, in this sheep market, the native token on the TON blockchain, Toncoin ($TON), along with the meme coin Notcoin ($NOT), has shown outstanding performance, sparking investor interest in finding new investment opportunities.

These days, I’ve been doing some homework to gain a more comprehensive understanding of the TON blockchain, and I’ve put together some content to share with everyone. Before we begin, let’s start with a panoramic view of the TON ecosystem to set the stage.

What is TON chain?

The Open Network (TON) is a decentralized layer-1 blockchain platform known for its ultra-fast transaction speeds, low fees, easy-to-use applications, and environmental friendliness.

It is based on the consensus mechanism of Proof of Stake (PoS) and adopts a unique multi-layer chain architecture, including the following key components:

As the core of the entire network, the main chain manages global information and is responsible for protocol changes, validator election and work chain configuration to ensure the consistency and security of the entire system.

Workchains are multiple independently running blockchains. Each workchain can process its own transactions and can be customized for different applications and use cases.

Sharding technology divides the blockchain state into smaller fragments. Each group of nodes only needs to store and verify part of the data. In theory, it can achieve millions of transaction processing capabilities per second.

Hypercube Routing is used to efficiently deliver messages in the shard structure to ensure the efficiency of cross-shard communication.

The design of this multi-layer architecture enables TON to achieve high scalability, support asynchronous smart contract calls, allow interoperability between different work chains, and maintain low transaction fees while maintaining high throughput. In general, TON’s multi-layer chain architecture creates a highly scalable, efficient and flexible blockchain network through the combination of main chain, working chain and dynamic sharding, which can meet the needs of various complex application scenarios.

Toncoin ($TON), as the native token of TON, assumes the multiple roles of transaction fee payment, network governance, validator pledge, and as a transaction medium. It is at the core of network operations and involves everything from paying transaction fees to participating in voting on network development proposals.

In addition, TON also provides users with a variety of services including decentralized finance (DeFi), secure data storage and easy-to-understand domain name services (DNS) through deep integration with the social software Telegram.

Key data of TON chain:

$TON initially issued 5 billion tokens and set an uncapped supply strategy to increase issuance year by year at a rate of approximately 0.6% per year. This strategy helps maintain network activity and growth needs.

The current circulating supply of $TON is approximately 2.46 billion, accounting for approximately 49% of the initial supply, indicating that a large number of tokens are still in non-circulation.

As of June 27, $TON’s total market capitalization was approximately $19.2 billion, while its fully diluted valuation (FDV) was $39.8 billion.

According to data from Defillma, TVL on TON has increased by 117% in the past month, reaching $689 million, ranking 12th among all public chains.

Compared with $SOL, the native token of the Solana public chain, the market value of $TON does not appear to be too high. However, the relatively low circulation rate means that a large number of tokens are still locked, which may limit the supply of the market in the short and medium term and drive currency prices upward, but in the long term, it may face greater selling pressure.

What is Telegram?

Telegram, an encrypted messaging app founded in 2013 by two Russian-born brothers, Pavel Durov and Nikolai Durov, supports end-to-end encryption and does not censor content. In order to avoid the influence of a single government, its servers are distributed in many countries around the world, so it is regarded as one of the most “free” social software.

Pavel Durov (left) and Nikolai Durov (right)

Telegram has reached 700 million monthly active users as of 2023 and is expected to reach 1 billion users by the end of 2024. Users send more than 15 billion messages on Telegram every day. The average Android user spends approximately 2.9 hours per month on Telegram.

Financially, Telegram started generating revenue through its Premium service. The service, which offers access to premium features like joining more channels and accessing premium memes, generated $45 million in revenue in 2023.

It is very popular in the crypto community. Many project developers prefer to open chat groups on Telegram to build communities. In addition, Telegram also provides many bot services, such as real-time tracking of the rise and fall of stock/currency prices, buying/selling of giant whales, etc., which greatly improves the convenience of individual investors. information acquisition efficiency.

The complex but close relationship between TON and Telegram

Origin:TON was originally designed by the two founder brothers of Telegram in 2018 and named Telegram Open Network, aiming to support billions of concurrent users to meet the needs of Telegram’s large user base.

Separation: In 2020, Telegram had to stop the development of the TON project and return investors’ funds due to a legal dispute with the U.S. Securities and Exchange Commission (SEC).

Community takeover: Although Telegram abandoned the project, community members took over and continued development, later renaming it The Open Network and officially completing the mainnet launch in mid-to-late 2021.

Current status and integration: While TON now has no official ties to Telegram, it is still deeply integrated into Telegram and benefits from the social software’s massive user base. For example, Telegram users can use TON for cryptocurrency transactions and payments through the built-in wallet bot; developers can build games and other applications on the TON chain and integrate them into Telegram in the form of small programs, and so on.

This relationship allows TON to leverage Telegram’s technical support and user base to innovate in the cryptocurrency and blockchain fields, and greatly accelerate the process of mass adoption of encryption technology. Looking back at the development history of blockchain technology, from the early ICO to the last round of explosive metaverse, no project has ever been able to achieve true Mass Adoption.

On the other hand, although the American social media giant Facebook also tried to launch its own cryptocurrency project Libra before Telegram, it was severely cracked down by regulatory agencies, causing Libra to eventually abort. In contrast, Telegram successfully bypassed regulatory obstacles and made TON the first blockchain capable of achieving Mass Adoption.

Because of this, the price of $TON is also subject to imagination. It has risen by 458.4% in the past year (as of June 27), and has risen by about 20% in the past 30 days; while BTC has only risen by 100% in the past year, and even more so in the past 30 days. It fell by about 10%.

Pavel Durov has also repeatedly supported the TON ecosystem. The most recent public platform was on June 4. He posted on his Telegram channel that Notcoin’s daily trading volume reached 4 billion U.S. dollars, making it one of the five largest cryptocurrencies in the world. He held $ NOT has increased in price fourfold and is now worth $24 million. And all this was only two weeks after he received $NOT from the Notcoin community.

Posts by Pavel Durov

“I will not sell my Notcoin until it reaches US$680 million,” Pavel Durov publicly promised. It can be said that he is unabashedly standing up for Notcoin.

Notcoin is a game that can be accessed through the Telegram app. The gameplay is very simple: after entering the game, the user needs to continuously click on the gold coins that appear on the screen, and each click will receive a certain amount of $NOT. However, the number of clicks is limited by an energy bar, which is depleted with each click and gradually restored over time. In order to increase the coin acquisition rate and reduce the energy consumed per click, players can activate “power-ups” or purchase upgrades.

In short, this is a tap-to-earn game that couldn’t be simpler, and there are a lot of them available in the WeChat mini-program.

However, I think Pavel Durov does not support the project purely from the perspective of asset profit. Behind the public “singing more” is the pursuit of a larger vision:

The Notcoin community has more than 500,000 users, and its tap-to-earn game on Telegram has attracted 35 million players. This not only effectively expanded the audience of Web3, but also allowed Notcoin to rapidly grow from a simple in-game token to A cryptocurrency with actual value - such a successful case is bound to attract more developers, project parties, communities and users to enter the TON chain ecosystem for construction.

In addition to Notcoin, what other emerging games are on the TON chain?

Catizen is a cat-themed synthesis game with a very simple core gameplay. In the game, the player runs a cat pet shop. Customers will pay gold coins as rewards after petting their cats. These gold coins can be used to buy new cats. Two cats of the same level can be combined into a new breed of cat, and its level will be one level higher than the original one. The player’s task is to synthesize higher-level cats and earn more gold coins.

As of June 17, Catizen announced that its total user base has exceeded the 20 million mark, with approximately 2.5 million daily active users and 1.15 million on-chain users.

The most popular game recently is Hamster Kombat. On June 24, Hamster Kombat announced on the X platform that its player base had reached 200 million, while the project’s X and YouTube accounts had 9.8 million and 28.7 million subscribers respectively. Judging from the scale of users, this small game launched in March this year has undoubtedly become the most popular phenomenon-level project after Notcoin.

According to Deep Tide, Hamster Kombat has become very popular in Iran and has become a game played on the streets. This is reminiscent of Axie Infinity during the pandemic, which was highly sought after in the Philippines for providing substantial benefits to the unemployed and unemployed.

Obviously, chain games featuring play-to-earn are more popular in countries with poor economic conditions. Although the value of a single user is low, considering that most of the world’s population lives in developing or backward countries, chain games are undoubtedly a powerful channel to introduce a large number of new users into the crypto world.

Currently, the mini-games on TON are all connected to Telegram in the form of bots (similar to games based on WeChat mini-programs). Most of them are relatively simple, with limited gameplay and content depth. Although these “local” games may attract a large number of users in a short period of time and become popular quickly, maintaining their popularity will become a problem.

DeFi, wallets, dating apps, and even AI assistants, everything is available on TON

In addition to games, TON has also developed significantly in the DeFi sector, including decentralized exchanges Ston.fi, DeDust, Megaton Finance, TON Swap, and launch platform Tonstarter.

The wallet section also offers a variety of options, including Wallet, an integrated wallet in Telegram; Tonkeeper, a non-custodial wallet that can be used as a mobile application and browser extension; and OpenMask, a TON browser extension wallet similar to Ethereum MetaMask.

The diversity of DeFi projects and wallets represents the activity and capital of the public chain, laying a solid foundation for the rapid rise of the TON ecosystem.

What’s even more fun is that you can also date, buy gift cards and phone cards, open a VPN, and even use TonGPT (a service similar to OpenAI’s super artificial intelligence assistant ChatGPT) on TON, and more.

However, I think mini-games are the development direction where TON can truly better integrate with Telegram functions. This idea was confirmed after recently observing a Space discussion at the TON Foundation. What Viktor, TON’s content manager said, moved me very much: On Solana, you need to have money to buy SOL to start trading, but on TON, you can start with nothing because you can make money through the play-to-earn model.

In addition, as a fairly mature social software, Telegram’s interactive experience is also very friendly to many users who are not tech-savvy (technologically proficient) and crypto-savvy (cryptocurrency-savvy). For example, the steps to set up a built-in Wallet are quick and easy. One panelist even joked that it would be simple enough to bring everyone into crypto, even 80-year-olds.

Finally, I want to share an interesting story, hoping to help everyone avoid detours on the road to finding alpha——

A close friend of mine decisively bought $TON when it was first listed on the exchange at the end of 2021, but its price has been lying on the ground with no change. During this period, the TON Foundation was also criticized verbally and verbally by some KOLs, and was labeled “inaction”. I also followed the trend and teased my friends, saying, isn’t $TON the QQ coin? How can QQ currency appreciate in value?

Fortunately, he was not scared by my FUD, but held it firmly. The reason is very simple: as a die-hard Telegram user, he believes that the value of a public chain established by a time-tested social software with a huge user base will sooner or later be appreciated by everyone. Discover.

Ultimately, the market proved that $TON is not a QQ coin. By continuously improving and expanding the ecosystem, the TON Foundation has attracted more and more users and developers, and the entire community has become more active.

Disclaimer：

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2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
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