Chain dissection. Toncoin

Bringing mass adoption with Telegram

3 min readDec 7, 2023

The Open Network (TON) was originally launched as the Telegram Open Network with the GRAM token by Telegram founders Pavel and Nikolay Durov in 2019. But the project was shut down due to pressure from the US regulator, the SEC. Then, the team of developers that is close to the Durovs continued working on the blockchain under the new brand of Toncoin (TON). Now, in 2023, the full-scale integration of TON into Telegram is underway. Let’s dissect.

– Structure and specifics

– TON tokenomics

– Plan to onboard Telegram user base

Structure and specifics

The TON blockchain consists of four layers, forming a tree structure:

Masterchain contains general information about the protocol: number of validators, set of active workchains and hashes;
Workchains are separate blockchains that remain interoperable with the masterchain. They can use custom virtual machines, address and transaction formats, and their own tokens to pay transaction fees. Consist of shardchains;
Shardchains are networks that contain data from a set of account chains. Shardchains have the same block formats and run on the same virtual machine as the parent workcahin;
Account chain is a sequence of transactions of a single account.

TON tokenomics

Standard: a native coin
Purpose: payments, gas, governance, staking;
Circulating supply: ~ 3.452 billion
Total supply: 5 billion TON
Current Market Cap: ~ $8 billion
Current price: ~ $2.34
All-time high: $5.84 (Nov 21, 2021)
Current inflation: The annual inflation rate is 0.6%, calculated according to payments made by the TON community to the validators.

Interesting facts:

– The current TON network is a testnet of Gram, which at one point was declared the mainnet of TON. The initial distribution of 98.55% tokens in this network was achieved via mining through PoW Givers smart contracts.

– Approximately 3 billion TON were mined by a small group of unknown individuals in May 2021, before it became widely evident that the project would become the official successor to Gram. Most likely, this group had insider information.

At the beginning, these unexplained facts gave Toncoin the reputation of being a shady project.

Plan to onboard Telegram user base

Time has passed; a few remember the shady manipulations in the beginning. Now comes the full integration of the blockchain into Telegram. According to the plan, the TON Foundation aims to onboard 30% of active Telegram users to TON in the next 3–5 years.

This is a very ambitious goal that looks great in a marketing pitch. Let’s try to understand how the TON team intends to do it.

The key features are:

– In July, Telegram launched its own payment system, Wallet Pay, and TON Wallet was integrated into the Telegram menu. Users were able to send cryptocurrency via messenger;

– In August, the team introduced tapps.center — a universal catalog of TON and Telegram applications, with the goal of creating a super app for everything with a user-friendly UI. WeChat was cited as an example, where one interface provides access to a variety of financial, social, and entertainment services;

– TON-based crypto projects have gained priority access to Telegram Ads.

These three features combined, can provide the desired mass adoption during the upcoming bull market.

Output

Despite the shady initial distribution of tokens, the team is doing its best to make the blockchain more transparent. Recently, for example, the team burned a so-called master key that allowed them to modify data on the blockchain. Besides, TON is gaining institutional ties, recently partnering with Animoca Brands.

TON has a tool that no other cryptocurrency has: a messenger with a live user base. This alone makes TON unique.