In recent weeks, one of the most remarkable highlights in the Web3 gaming sector has undoubtedly been the TON ecosystem. From the fair launch of $NOT, which achieved a global valuation exceeding $1 billion without any venture capital backing, to Hamster Kombat attracting 142 million registered users within 77 days, it seems like another significant milestone is reached every week within the ecosystem.
Telegram, with its 900 million monthly active users, represents what may be the largest distribution channel for Web3-related users. As a platform known for its emphasis on security and privacy, this fifth-largest and second-fastest growing messaging app has already established itself as the primary communication tool for cryptocurrency users. Every non-US user who registers on Telegram automatically receives an abstract crypto wallet, positioning the TON ecosystem as one of the strongest candidates for driving mass Web3 adoption.
Telegram’s Expansion
Telegram is the first chat-only application to make a serious foray into the gaming world. After integrating HTML5 compatibility to support Telegram bots in 2016, the development of the TON blockchain launched in 2017 aimed to further reduce friction for both users and developers. Through TON, developers can access payment channels, decentralized storage to host game assets, or smart contracts to secure and automate game mechanics while efficiently distributing content to Telegram’s community of 900 million monthly active users.
TON Ecosystem
The TON tech stack offers developers tools to build a wide range of decentralized applications (dApps) on top of Telegram. Wallets, exchanges, bridging tools, games, and other market demands are serviced by hundreds of teams within this ecosystem.
$TON is the core token of the TON ecosystem. Primarily, it functions as the gas token for all on-chain transactions. Validators must stake TON to participate in the proof-of-stake validation process, similar to Ethereum or Polkadot networks. Additionally, developers need to pay $TON to deploy and run smart contracts on TON. Total fees include base fees, storage fees, and execution fees, ensuring scalable token utility and validator revenue.
Moreover, users and developers can exchange value within the ecosystem using $TON with minimal friction. While $TON’s supply increases by a fixed 0.6% annually, 50% of the network fees are burned, creating an incentive to hold the token, as its value grows with increasing TON network activity. Based on the burn rate from June 2024, approximately 2.89 million $TON are burned annually, significantly less than the 306,500 new $TON generated from inflation in the next 12 months.
For decentralized decision-making, governance rights are allocated proportionally to $TON holders based on their stake. Although governance is not the primary advantage of the token, it plays a supplementary role in shaping the future of the protocol. However, the highly concentrated distribution—where the top 100 holders possess 92% of the supply—severely limits the impact of decentralized decision-making through governance.
In June 2023, after a proposal to burn 50% of network fees was put to vote, 98% of voters supported it, leading to continuous supply burning and putting pressure on the token value proportional to network activity growth. It’s worth noting that voting consensus within the TON network is exceptionally high. Although only four proposals have been voted on, they have passed with an average approval rate of 96%, showcasing a strong alignment within the ecosystem community. This overwhelming consensus is largely attributed to the high concentration of TON tokens, where over 92% of voting power comes from 100 wallets.
The TON Believers Fund is another example of the community’s strong core belief. Over 1.3 billion TON are locked in the fund for five years, accounting for about 25% of the total supply. In 2023, the fund stopped accepting contributions and entered a two-year hard lock period, after which the locked tokens and their yield will undergo a three-year linear unlocking period. While locking a large portion of the supply for five years emphasizes the TON community’s long-term faith, it further centralizes governance. Additionally, the reward structure remains unclear, as rewards come from “donations,” with a proposal passing with 99.4% approval to allocate 1 million TON (<0.1% of the staked tokens) to stakers.
Explosive Growth of TON
Decentralized applications (dApps) within the ecosystem have set impressive records. Notcoin reached 40 million users in just six months, while Hamster Kombat surpassed 200 million registered users, with over 30 million daily active users. This growth mirrors the rapid rise of early social games like Farmville and Oh! Sheep, but highlights the enhanced power of crypto-driven growth incentives. Hamster Kombat is expected to launch its token soon, while $NOT was listed on Binance last month with a fully diluted valuation of $1 billion, peaking at over $2.1 billion before settling around $1.45 billion.
Telegram’s announcement in late February that its ad network would share 50% of advertising revenue with channel owners through TON was a key driver of this momentum. The implementation of an accessible payment system has opened up a vast potential market for advertisers, who can now tap into Telegram’s enormous user base. On the day of the announcement, Toncoin surged by 40%, and it has continued to maintain growth momentum ever since.
Between Q1 2022 and Q4 2023, the ecosystem’s developer community experienced steady growth. In Q1 2022, the TON Telegram developer community had about 2,200 users; by Q4 2023, this number had risen to 13,500. As of June 2024, the number has nearly doubled to 36,500, marking a significant surge compared to previous growth trends.
The rise in Mandarin-speaking developers is particularly noteworthy. The Mandarin-speaking community grew from 2,300 to over 7,300 members, an increase of more than 300%, while the Russian-speaking community grew by only about 50%, reflecting the growing interest of China’s crypto-enthusiast community.
In Q2, TON saw upward trends in daily active wallets and transaction volumes, with Notcoin and Hamster Kombat leading the charge. Similarly, transaction volumes have surged in the past three months, recently exceeding 8 million daily transactions, following a peak during the three-week period after the ad network announcement, compared to Q1’s 500,000 to 1.3 million.
This trend is evident across various activity metrics, including wallet numbers, on-chain activated wallets, minted NFTs, and overall daily active users, as all metrics have begun to show exponential growth.