Research Summary
The report provides an in-depth analysis of TON, a Proof-of-Stake blockchain backed by Telegram Inc through the TON Foundation. It discusses TON’s concentrated supply, go-to-market strategy, growth potential, and crypto-specific catalysts. The report also highlights TON’s history, current ecosystem, tokenomics, and potential risks.
Key Takeaways
TON’s History and Current Ecosystem
- TON’s Origins: TON, initially known as the Telegram Open Network, was created by Telegram founders Pavel and Nikolai Durov in 2018. Despite regulatory challenges, the project continued under the TON Foundation.
- Current Ecosystem: TON comprises four major components: TON Blockchain, TON Payments, TON Proxy, and TON Storage. The chain has seen a surge in activity due to efforts by the TON foundation, Telegram, and partners.
TON’s Tokenomics
- Supply and Inflation: TON has a total supply of 5 billion tokens, with an annual inflation rate of 0.6%. Approximately 47% of TON’s supply is removed from circulation due to the Believers Fund and inactive miner wallets.
- Value Accrual: TON has a fee burn mechanism where 50% of all TON fees are burned. Telegram is also developing utility features for the TON token to enhance its value.
TON’s Growth Potential
- User Base Expansion: TON aims to onboard 30% of Telegram’s monthly active users within the next 3-5 years. This represents a substantial total addressable market.
- Developer Engagement: TON currently has 39 full-time developers and around 120 monthly active developers. However, the programming language used (FunC) is somewhat esoteric, which may limit developer engagement.
TON’s Risks
- Valuation Concerns: Questions remain about whether TON can sustain its current valuation. The project seems to be almost fully valued at these levels.
- Regulatory Risk: Regulatory risk remains a factor, although much of this has been derisked following Telegram’s previous run-in with the SEC.
Actionable Insights
- Monitor TON’s User Base Growth: Given TON’s goal to onboard a significant portion of Telegram’s users, it’s crucial to monitor the growth of its user base.
- Assess Developer Engagement: The level of developer engagement can be a key indicator of a blockchain’s potential. Therefore, it’s important to assess TON’s developer engagement and the impact of its programming language choice.
- Consider Regulatory Developments: Given the potential regulatory risks, it’s important to stay updated on any regulatory developments that could impact TON.
