CGV Research: The core reasons for the explosion of the TON ecosystem and future trends

Source: CGV Research

Original author: Shigeru

Introduction

With the arrival of the summer of 2024, the TON Network has shown unprecedented growth momentum, with daily active addresses, transaction volume, and total locked value (TVL) reaching new highs. This series of achievements heralds the golden decade of the TON ecosystem. The CGV Research team delves into the internal innovation and external market factors of TON to analyze its key driving force in becoming a leading blockchain platform.*

Every day in June 2024, the records created by TON are constantly being refreshed, whether it's users, transaction volume, or TVL.

The number of daily active addresses on TON has exceeded $ETH for multiple consecutive days;

-- The Total Value Locked (TVL) of TON has exceeded 600 million US dollars, a thousand-fold increase since 2024;

--Within 47 days, $USDT worth 450 million US dollars was issued on TON platform;

--TON Foundation President Steve proposed that the birth of the first TON mini application with 100 million Telegram users is a sign of the large-scale adoption of encryption; Hamster Kombat has already been achieved the next day.

The CGV Research team believes that the arrival of TON summer 2024 is benefiting from the dual good news of "TON internal" and "TON external".

Driving Force within TON

• Wallet Innovation: In July 2023, TON launched a new wallet payment function, allowing users to conduct various transactions and payments through the TON wallet, improving user experience. Later in September, TON launched TONSpace, a self-hosted wallet that allows users to manage their own private keys and assets. In December, a secondary entry for the wallet was added to the Telegram application, making it more convenient for users to use the TON wallet within Telegram.

• Token Lockup Strategy: In early 2023, the TON community and validators decided to freeze the wallets of inactive miners through on-chain voting, which accounted for approximately 21% of the total supply, and will be locked until February 2027. In October, the community launched the TON Believers Fund, a five-year lock-up plan where users can choose to donate or deposit their tokens into smart contracts. This action locks up 26% of the supply, totaling approximately 47% of TON tokens being locked up for three to five years, effectively reducing the circulating supply in the market and benefiting the stability of token prices.

——TON Native USDT Deployment: In April 2024, Tether announced the introduction of USDT to the TON network. This move adds transactions and financial activities related to USDT to TON, providing strong support for DeFi applications. The issuance of USDT on TON quickly surpassed that of Cosmos and Near, becoming the network with the fourth largest issuance, following only Tron, Ethereum, Solana, and Avalanche.

——Breakthrough in Blockchain Performance: On October 31, 2023, TON reached a peak of 104,715 transactions per second in a public performance livestream test, processing a total of 107,652,545 transactions. This performance has been verified by Certik, marking TON as one of the fastest and most scalable blockchains in the world.

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

TON External Factors

——Pantera's large investment: In May 2024, Pantera made the largest investment in history in the TON Network, which not only proves the recognition of TON's technology and market potential, but also may attract more capital attention and strengthen market confidence in the TON ecosystem.

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

——New Narrative Demand: The crypto industry needs new narratives and directions. The TON ecosystem has brought new vitality to the market through social fission and flywheel effects, leading to user and transaction volume growth.

In summary, the CGV Research team believes that the TON ecosystem may exhibit 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 cryptocurrency industry.

Trend 1: The black hole effect brought about by the full ecological expansion of Telegram

Telegram was originally created as an instant messaging tool, and has now evolved into a multi-functional platform integrating social, payment, service subscription, and mini-program functions. 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 toolkits (SDKs) that attract developers to build and deploy decentralized applications (DApps), which may weaken the development resources of other blockchain platforms.

Medium Game (Application Layer and Services): Custom stablecoin solutions, micro-payment systems, and the ability to seamlessly access mainstream crypto assets through official cross-chain bridges in the TON ecosystem, providing users with a one-stop asset management and trading platform.

Downstream (user adoption and market expansion): Telegram's large user base provides TON with market access, and by establishing relationships with financial institutions, media companies, and retailers, Telegram can integrate cryptographic technology into a wider range of economic activities.

Trend 2: No Regulatory Obstacles + Fastest Public Chain + Flywheel Effect, Making TON Ecology Limitless

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

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

NFT Market: The conversion of Telegram stickers into NFTs and their trading on the TON blockchain heralds a huge emerging market.

Web3 Project Revenue Realization: The mini app on TON is expected to become a high-revenue Web3 project, leveraging its huge daily active user base.

Trend 3: Involvement of Global Financial Giants: Mainstream Recognition of TON Ecosystem

With the maturity of the TON platform and the implementation of cross-chain functionality, it may attract the attention of traditional financial institutions, prompting them to explore blockchain technology and collaborate with TON.

Financial service innovation: Financial institutions may migrate their services to TON or collaborate 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, and even create stablecoins pegged to specific assets.

Trend 4: The Change in Investment Logic: The 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 necessary option for cryptocurrency projects.

Technology and Business Model: The project may rely on more mature technology and business models to attract users and investors, rather than just relying on token economics.

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

Investment Analysis: The evaluation of future 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 cryptocurrency field, but also attract a wider range of users and the participation of traditional financial institutions, opening up a new stage of development.

Conclusion

The rise of the TON ecosystem heralds the future development direction of cryptocurrency and blockchain technology. With Telegram's deep integration and TON's innovative drive, we foresee a new ecosystem forming 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.

About Cryptogram Venture (CGV)

CGV (Cryptogram Venture) is a crypto investment firm headquartered in Tokyo, Japan. Since 2017, its funds and predecessor funds have participated in over 200 projects, including investments in the incubation of licensed Japanese yen stablecoin JPYW. CGV is also a limited partner in several globally renowned crypto funds. Since 2022, CGV has successfully held two Japan Web3 hackathons (TWSH), with joint support from institutions and experts such as the Ministry of Education, Culture, Sports, Science and Technology of Japan, Keio University, and NTT Docomo. Currently, CGV has branches in Hong Kong, Singapore, New York, Toronto, and other places. In addition, CGV is also one of the founding members of Bitcoin Tokyo Club located in Tokyo, Japan.

Disclaimer:

The information and materials introduced in this article are all from public channels, and the company does not guarantee their accuracy and completeness. Descriptions or predictions of future situations are forward-looking statements, and any suggestions and opinions are for reference only and do not constitute investment advice or implication to anyone. The strategies that the company may adopt may be the same, opposite, or unrelated to the strategies speculated by the readers based on this article.