Ethereum and Solana’s DEXs have become increasingly mature after several cycles, so what is the current situation with TON? How does it compare, and where does it fall short?
TON’s performance and scalability are on par with Solana among all public chains. However, TON’s ecosystem is a hybrid of Web2 and Web3 models, which technically tends to dilute Web3 in practice while deeply integrating Web3 technology.
The characteristics of DEXs within the TON ecosystem are quite evident.
For example, Telegram integrates centralized trading pools for stablecoin and TON top-ups, and subsequently facilitates exchanges between TON and other tokens. Functionally, this is a simplified version of the DEX experience, and operationally, it closely resembles the instant exchanges of CEXs.
This feature is the primary function of Telegram’s Wallet. The secondary function involves interacting with the TON blockchain wallet TONSpace, offering a similar experience to using MetaMask on PC and mobile devices. For token swaps, STON and Dedust are commonly used within the ecosystem, but their functionality is similar to Uniswap V1.
Clearly, this highlights the shortcomings of TON’s DEX offerings. While Telegram Wallet provides a CEX-like experience, TONSpace and DEXs need to improve interaction on PC and mobile platforms. Additionally, Telegram’s MiniApp and Bots will also serve as transaction frontends for DEX or CEX functions. These designs enhance trading experiences, but the native on-chain interactions are noticeably lagging.
Currently, all observed DEXs on TON, such as STON and Dedust, only offer functionalities similar to Uniswap V1. In contrast, for high-speed blockchains like Solana, providing trading liquidity or modularizing trading functions to leverage liquidity advantages is crucial.
On TON, DEX transactions will heavily rely on Telegram for frontend access. DEXs need to increase business sophistication, similar to Jupiter and Balancer, to achieve balance among users, token providers, liquidity providers, and platform developers. Each role needs tailored functionality.
Projects Enhancing DEX on TON
Compared to Uniswap, Balancer, Jupiter, and other DEXs, TON does not yet have (or has not yet launched) projects that fully complement all necessary DEX functionalities. However, after reviewing the design ideas of publicly available projects in the ecosystem, it is clear that LayerPixel, a middleware for on-chain trading, shows promise in completing TON’s DEX functionalities.
LayerPixel, incubated by TON blockchain’s launchpad TonUP, is a DeFi solution designed for Telegram Mini Apps, officially referred to as Layer 1.5. It provides services including wallet functionalities, DEX (with various trading algorithms), and offers PixelSwap directly to end-users. Additionally, it provides an embedded SDK suite for other applications to develop swap functions.
TON needs corresponding roles in a full-chain asset scenario. This includes asset issuance, asset trading, trading liquidity provision, oracles, asset pools, wallets, and more.
The functionality of IDO lies in issuing tokens. On Ethereum, there are traditional IDO and LBP (Liquidity Bootstrapping Pool) bidding IDOs. The LBP mechanism reduces price speculation by allowing traders to buy in once prices stabilize. In LayerPixel’s scenario, TonUP offers IDO issuance with LBP rules incorporated.
Post-IDO, tokens need to provide liquidity and composite trading, requiring DEX intervention.
LayerPixel’s PixelSwap is a weighted pool DEX, similar to Balancer, supporting LBP asset issuance. This Dutch auction-style issuance suits medium-sized projects with low FDV, common in Telegram’s ecosystem, such as game/GameFi projects.
The finer design makes DEXLP more akin to a mature LP in centralized exchanges, actively ensuring fund yield and isolating risks.
Following token trading on DEXs, the next components are Oracles, Pools, and wallet services.
Oracles provide real-time price sources from AMMs to external DeFi, DEXs, aggregators, lending platforms, and asset bridges. With rich AMMs, this capability is inherently available. Pools allow users to perform compound staking with multiple assets, with many Ethereum DEXs providing swaps and staking for assets like stETH from Lido. Lastly, wallets offer a user entry point beyond trading platforms, integrating functionalities like trading aggregation and launchpads.
LayerPixel designs all these components—IDO, token trading, wallets, oracles, pools—into its business chain. Its goal is to address the design deficiencies of TON’s DEX and to serve as a DeFi middleware for TON.
Currently, LayerPixel’s code has been completed and submitted for audit. For security reasons, the audit is being conducted by two auditing firms. It will go live on the mainnet once the audit results are completed.
Conclusion
Observing TON’s applications reveals a heavy reliance on Web2, designed to lower the barrier for Telegram users. Based on experiences with multiple high-speed public chains, Telegram’s official wallet may evolve to serve more as a wallet verification tool, assisting users in more direct on-chain transactions to ensure asset security and Web3 interaction correctness.
For public chains, DEXs are the venues for unleashing on-chain vitality. Each DEX aims to become a mature financial trading platform, providing users with precise, sophisticated asset management capabilities.
TON is continually reaching new highs, and its ecosystem value is growing. As TON’s development flourishes, the value of projects will increasingly reflect in DEX trading pairs. Thus, the more mature the development of DEXs, the greater the opportunities for investors to capitalize.