The Open Network (TON) is a proof-of-stake blockchain originally conceived by the founders of Telegram. Now developed by the open-source TON Foundation, it aims to become a high-speed, scalable platform for decentralized applications and services. Its unique architecture and massive built-in user base from Telegram make it a project with significant attention. But is its native token, TON, a good investment? This analysis breaks down its technology, ecosystem, tokenomics, and potential.
An Overview of The Open Network (TON)
TON is designed for mass adoption. Its core innovation is Infinite Dynamic Sharding, a technology that allows the network to split and merge its blockchains dynamically to handle changes in load. In test environments, this has enabled over 100,000 transactions per second (TPS), a figure that surpasses many leading blockchains.
A Brief History of TON
The story of TON began in 2018 when Telegram’s founders, the Durov brothers, initiated an ambitious project to integrate a blockchain into their messaging platform. They raised $1.7 billion through an initial coin offering (ICO) for the token, then called Grams. However, regulatory challenges from the U.S. SEC led to a settlement, and Telegram officially stepped away from the project.
Development was continued by an independent community of developers, which evolved into the TON Foundation. This group has been dedicated to realizing the original vision laid out in the TON whitepaper. The network transitioned to a proof-of-stake (PoS) model, and the TON token was distributed through early mining. The project gained renewed momentum when Telegram officially re-engaged through a partnership with the TON Foundation in late 2023.
The Four Pillars of the TON Ecosystem
The TON ecosystem is built on four key components that work together:
- TON Blockchain: The main PoS blockchain that processes transactions and executes smart contracts.
- TON Payments: A system for instant, low-fee micropayments, currently accessible via a built-in Wallet bot on Telegram.
- TON Storage: A decentralized file storage solution, similar to a distributed Dropbox.
- TON Proxy: A tool that helps ensure censorship resistance by allowing users to access .ton sites anonymously.
This comprehensive suite aims to provide a full-stack decentralized experience.
Why TON Is Gaining Momentum: Key Growth Drivers
Several factors contribute to the bullish outlook on TON's potential.
1. Unmatched Distribution Channel: Telegram Integration
TON’s single biggest advantage is its deep integration with Telegram, which boasts over 800 million monthly active users. This provides an immediate, massive audience that no other blockchain can easily access. The strategy is to slowly onboard these users into the Web3 space through simple, engaging applications within the Telegram app itself.
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2. Exploding On-Chain Activity
Recent months have seen a Cambrian explosion of activity on the TON blockchain, driven by incentive programs and viral apps:
- Transactions: Daily transactions have surged from 200k to between 2-4 million.
- Active Wallets: The number of activated wallets grew from 600,000 in January 2024 to over 3.5 million by April.
- Total Value Locked (TVL): TVL denominated in TON skyrocketed, growing six-fold since the start of 2024.
This growth, while partly incentive-driven, demonstrates the network's ability to attract users.
3. Major Strategic Partnerships and Integrations
Key announcements have bolstered credibility and utility:
- Tether (USDT) Integration: Tether launched native USDT on TON, enabling deep liquidity and easier access to stablecoins for its user base.
- Telegram Ad Revenue Share: Telegram announced that advertising payments on its platform will be made exclusively in TON. Revenue will be shared with channel owners, creating a direct utility and demand sink for the token.
TON Tokenomics: Supply, Demand, and Value
Understanding the token economics is crucial for any investment thesis.
Supply and Distribution
The total supply of TON is fixed at approximately 5.1 billion tokens. Two major factors are currently constricting the circulating supply:
- Believers Fund Lockup: About 1.3 billion tokens (over 20% of the supply) are locked in a smart contract until October 2025, after which they will be released monthly over three years.
- Inactive Early Miner Wallets: An additional 1.1 billion tokens are held in wallets that have been inactive for over 48 months.
Combined, this means nearly 47% of the total supply is effectively illiquid for the foreseeable future, reducing selling pressure.
Demand Drivers
Demand for the TON token is driven by:
- Network Fees: 50% of all transaction fees on the network are burned, making TON a deflationary asset as usage grows.
- Gas Fees: TON is used to pay for transactions and smart contract executions.
- Telegram Services: Use of TON for paying for ads and Telegram Premium subscriptions creates consistent, real-world demand.
- Staking: Users can stake TON to help secure the network and earn rewards.
Investment Rationale and Potential
The Case for investment
TON’s growth potential is not about competing for existing crypto users on Ethereum or Solana. Instead, it’s targeting a new, massive demographic: Telegram users who value speed, convenience, and censorship-resistant financial tools. If Telegram can convert even a small percentage of its hundreds of millions of users into active TON users, it would dwarf the current user base of most blockchains.
Some analysts draw long-term comparisons to BNB, which achieved a market cap of around $90 billion, suggesting significant upside potential if TON executes its vision successfully.
Risks to Consider
No investment is without risk. Key considerations for TON include:
- Sustainability of Growth: Current activity is fueled by incentives. The ecosystem must develop organic, sustainable use cases to maintain growth after incentive programs end.
- Supply Unlocks: The unlocking of tokens from the Believers Fund starting in late 2025 will increase circulating supply, potentially creating selling pressure.
- Execution Risk: The vision of a Web3 super-app is ambitious. It requires flawless execution and continued adoption to become reality.
- Regulatory Landscape: While the prior SEC settlement reduced immediate regulatory risk, the broader regulatory environment for crypto remains uncertain.
Frequently Asked Questions
What is TON coin used for?
TON is the native gas token of The Open Network, used for paying transaction fees, executing smart contracts, and staking. It also has growing utility within Telegram for paying for advertising and premium services.
How is TON connected to Telegram?
While TON is developed independently by the TON Foundation, it has an official partnership with Telegram. Telegram is integrating TON-based services, like its Wallet bot and TON-based payments, directly into its messaging app, providing a huge user base for potential adoption.
Is TON a good long-term investment?
TON presents a unique proposition due to its integration with Telegram's massive audience. Its long-term success depends on its ability to successfully onboard millions of non-crypto users and build a vibrant, utility-driven ecosystem. It carries typical crypto risks but has a high upside potential.
What is the total supply of TON?
The total maximum supply of TON is approximately 5.1 billion tokens. A significant portion is currently locked and will be released gradually over the next few years.
How does TON's speed compare to Solana or Ethereum?
TON's architecture is designed for high throughput, claiming over 100,000 TPS in tests. This theoretically makes it much faster than Ethereum and competitive with other high-speed chains like Solana. Real-world performance may vary as adoption grows.
What are the main risks of investing in TON?
Main risks include the eventual unlocking of a large portion of the token supply, the potential for regulatory challenges, and the need for the ecosystem to develop sustainable usage beyond initial incentive programs.
Conclusion
The Open Network represents a bold experiment in mass blockchain adoption. Its technical merits, combined with the unparalleled distribution power of Telegram, make it a uniquely positioned project in the crypto space. While it faces significant challenges and execution risks, its potential to onboard the next hundred million users into Web3 is undeniable.
For investors, TON offers a high-risk, high-reward opportunity to gain exposure to a project targeting a market far larger than the current crypto niche. As always, thorough personal research and consideration of risk tolerance are essential before making any investment decision.