Toncoin - $TON, Asset Review
Telegram's No-SIM Signup Feature Helps Toncoin Rally, Bitcoin Also Higher (CoinDesk, 2022)
General Information-What is Toncoin
Toncoin Background
Toncoin Funding/Collaboration
Token Information-Tokenomics
Consensus
Additional Information-
Roadmap/What’s Next?
Technical Analysis
Conclusion
General Information-
What is Toncoin
Ton-coin stands for The Open Network(TON). Toncoin is a layer-1 blockchain that was created in 2018 by one of the founders of Telegram. Toncoin is a fast, secure, and scalable blockchain that can handle up to millions of transactions per second while being user-centric. Toncoin’s founding developers aimed to create a network that is fully decentralized and welcome other developers to create applications on The Open Network. The Open Network’s mission is to provide solutions like the option to create dApps, offer decentralized storage solutions, options for a decentralized VPN, and TON’s own decentralized name service which will allow for traditional websites and users to have short, readable names. If you didn’t catch the theme yet, the point of The Open Network is mainly decentralization.
2. Toncoin Background
Ton Foundation/Labs is a project that was created by the founders(brothers) of Telegram, Pavel Durov, and Nikolai Durov. The founders are extremely successful engineers who have experience in the blockchain industry and understand the importance of decentralization.* Telegram was founded based on privacy, it was created by these brothers to protect data from third parties, marketers, advertisers, etc. T.O.N use to be known as the Telegram-Open-Network but was changed to The-Open-Network later in 2021. The reason behind this is to disassociate Telegram from the network as they are two completely different platforms with different purposes but they still share the same mission. TON initially started in 2019 but was sued the same year for “an illegal securities offering” after raising 1.7 billion dollars. This led to the team returning all funds to investors that invested in the offering. More on that in the next section.
Figure A
3. Toncoin Funding/Collaboration
As we covered in the last section $TON held an ICO but returned 1.7 billion dollars to investors. So what did they do? The team decided to launch as an open network without raising money which is in line with their mission. The only way tokens* can be extracted is to participate in the network from staking. We will go over more about tokenomics in the next section but I want to pivot to some collaborations with the network. In recent news, Telegram's No-SIM Signup Feature Helps Toncoin Rally accordingly. This collaboration is massive as it will allow telegram users to buy blockchain-based names by using $TON which bypasses a SIM card. Another massive collaboration is within the ecosystem fund that raised $250M from Huobi, Kucoin, 3Commas, and others. It will be fun to watch the ecosystem grow with such a massive pool of contributors.
Figure B
Token Information-
Tokenomics
$TON is the native token for the The-Open-Network blockchain. Currently, the circulating supply is 1,473,591,410 with an uncapped supply of 5,057,362,773 tokens according to CoinGecko. As for the token issuance, the tokens are allocated as such: 85% were reserved for users, 5% for validators, and 10% for the developers according to the community members. It is important to note that there is a .6% inflation annually in the supply. The $TON token is used for things like transaction fees, staking, governance rights, payment for storage services, and other things per the below image. I think the team does a good job being transparent with the tokenomics which is a big plus.* In the past the network used to have the option to mine $TON tokens, however, this was amended due to the lawsuit from the SEC, more on that here.
Figure C
2. Staking
$TON token holders may contribute to the network by staking. Staking rewards vary and seem to be consistent with profit share at 60% amongst all pools. Upon review, there is no information about how long a lock period is for a pool, so my assumption is there is no lock-up period if a pool is joined. The average validator stake is 600k $TON for those who might be interested in running their own node. Another interesting element is that in Figure F, it appears that 157 million tokens are being staked which is about 3% of the supply. While that number is low compared to other blockchains, we are seeing growth across the network in total accounts approaching 2 million wallets. I believe as the ecosystem grows, and there are more user-friendly staking methods, this number (3%) will likely rise.*
Figure D
Figure E
Figure F
Additional Information-
Roadmap/What’s Next?
T.O.N’s team has an updated roadmap of their plans which again displays a level of trust in the team. Whether these expectations are delivered on time or not, the team has been transparent with every factor thus far including their roadmap per the below image. In 2022, they have completed many milestones like bringing Nominators, Defi, Developer programs, DNS(domain name system), payment, and site services to the blockchain. Going into Q4 they plan to add storage applications and in 2023 allow for cross-chain interoperability for Bitcoin, and EVM chains. These developments will bring more and more adoptions as developers will have more tools to build what they want on the blockchain. It will be fun to watch the developments as we navigate through the bear market.
Figure G
2. Technical Analysis
Figure H
$TON has had a great run from $.53 to $6.61 yielding ~11x+ returns. Ever since $TON hit all-time highs, we have seen the price fall towards a high time frame demand zone (green box) that acted as a support region. Price is likely to consolidate in or near the grey box before making a new move. The way the structure subdivides will give hints on how the next move plays out. Bottom structures typically take a long time to form and reverse when the bears are exhausted, so it’s best to stay patient for a clear structure. In my opinion, the structure currently looks bullish and the RSI is gaining momentum along with volume rising. So long as the grey structure is held, the price is likely* to keep making higher highs and higher lows to the next red zone at about 3.74. If the grey zone is broken, we can expect the price to retrace to $1 which is less likely at this moment.
Conclusion
The-Open-Network has done a great job at executing its protocol despite the hiccup during the initial launch. I love what they are doing by putting privacy first and allowing other applications to build on top of the network. T.O.N is a Layer-1 protocol so it will be battling against other popular Layer-1’s to gain market share. T.O.N does have good things going for it that other Layer-1s don’t have like ecosystem funds of $250MN and other functions mentioned in the tokenomics section. Another thing that I like is that the team is experienced. This is not just your average group of people. The people behind this network are responsible for one of the most downloaded apps in the world(telegram). They understand the technical things that are needed to achieve success and so far they have been doing well with T.O.N. So long as they keep being transparent, and keep executing the way they have been, I believe this network will be extremely successful. While I am bullish on The-Open-Network, that doesn’t mean it’s correlated to the value of $TON.
Figure I