Introduction

As a standout project in the L1s sector, Toncoin has consistently maintained a position within the top 20 regarding market capitalization in the crypto space. Although Toncoin initially gained rapid attention through Telegram’s mini-programs and games, its superior performance is its core competitive edge. Test data shows that Toncoin’s TPS (transactions per second) metric has already surpassed that of Solana, demonstrating its exceptional performance.

Moreover, Toncoin benefits from the traffic influx of Telegram’s platform, which boasts 900 million users. Coupled with the strengthening community consensus, Toncoin has a promising future with ample potential for further development and breakthroughs.

Project Basic Information

Project Team

• Pavel Durov: Founder & CEO, also the CEO and founder of Telegram. Before creating Telegram, Pavel founded VK, the most popular social network in Russia and some other countries, with over 100 million active users.
• Inal Kardan: Head of Games at TON Foundation. He was the co-founder and Chief Technology Officer at Meta0 and also co-founded and served as CTO at Billy App.
• Julian Tan: Head of TON’s DeFi Ecosystem. He previously held a business development role at Binance, was a SEI ecosystem development partner, and graduated from the University of Queensland.
• Jordan Dunne: Head of Telegram DeFi for TON Wallet. He previously worked as a technical project manager at Google.

Funding Information

Toncoin has completed seven rounds of financing, with five rounds undisclosed in terms of amount, and the disclosed rounds raising approximately $16 million.

• Seed Round: In April 2021, Runa Capital and RTP Global invested $6 million. Runa Capital is a venture capital firm, and RTP Global focuses on early-stage technology companies.
• Series A: In November 2022, DWF Labs invested $10 million.
• Other Five Rounds: These rounds were led by Mask Network, Mexc Ventures, Animoca Brands, Mirana Ventures, and Pantera Capital, with the investment amounts not disclosed.

Although the disclosed funding amounts to only $16 million, Toncoin, backed by the globally top-ranked social app Telegram, has garnered significant interest and optimism from investors regarding its prospects.

Development Strength

Toncoin was initiated in 2018 by its founder, Pavel Durov. The development journey of Toncoin has been quite challenging. Key events in the project’s development are listed in the table below:

From the key events in Toncoin’s development, it is evident that the project has faced numerous obstacles and challenges. However, the community’s ability to spontaneously step up and continue driving the project forward during difficult times highlights the success of its community-building efforts and the strong consensus among its members.

Additionally, during significant milestones such as the launch of the testnets, the deployment of TVM, and the launch of the mainnet, Toncoin’s technical development team consistently delivered high-quality work on schedule. This reflects the outstanding capability and professional standards of the development team.

In summary, Toncoin’s development journey showcases the cohesiveness of its community and the execution power of its technical team, laying a solid foundation for its continued growth. These strengths undoubtedly enhance investor confidence and anticipation for Toncoin’s future.

Operating Model

Toncoin, as an L1s project, employs a hybrid consensus mechanism of PoS and BFT to safeguard chain security. The project is structured with main, work, and shard chains. The main chain facilitates network-wide synchronization, coordination, and node security. Specific interactions are delegated to work chains and shard chains.

During task execution, work chains support the operation of smart contracts and DApps. Each work chain defines its own transaction types, smart contract functionalities, and address formats. The network can accommodate up to 2322^{32}232 work chains, each operating independently yet capable of interoperation through a unified message format, akin to processes in Arweave’s Autonomous Organization.

Task execution is handled by shard chains, which are subdivisions of work chains responsible for processing network transactions and data. The network can host up to 2602^{60}260 shard chains, dynamically adjusting their merging or splitting based on the current network load.

Toncoin’s workflow involves processing user or other process requests through message passing. Once a specific task is assigned to a work chain, it delegates the task instructions to the corresponding shard chain for processing. After computing the results, the shard chain returns the message to the work chain. Interactions and data transfers between work chains adhere to unified interoperability standards. Final computation results are validated and stored on the main chain, ensuring the latest status for cross-chain message retrieval among lower-level work chains and shard chains.

Key Technological Advancements

Toncoin utilizes three key technologies — instant hypercube routing, self-healing vertical blockchain, and asynchronous smart contract calling — to achieve optimal performance and scalability. These innovations enhance cross-chain interactions, system reliability, and parallel computation efficiency, making Toncoin a leading L1s public blockchain project. With its hybrid PoS and BFT consensus mechanism, unlimited sharding, and asynchronous capabilities, Toncoin provides superior scalability compared to other blockchain platforms. These technological strengths ensure robust support for running related mini-program initiatives in the future.

Introduction to Toncoin’s Innovative Technologies

Instant Hypercube Routing

Traditional hypercube routing involves information exchange among three types of chains: communication between shard chains within the same work chain, communication between shard chains of different work chains, and interconnection between the main chain and other work chains. Each chain is connected to a shard identified by a hexadecimal number different from its own, forming a hypercube structure. The entire network of shard chains constitutes a hypercube network, with routing counts of log16(N).

Toncoin employs two types of information routing: slow routing and fast routing. In fast routing, Merkle proofs can be used directly to relay information without submitting it to intermediary shard chains, thereby avoiding additional latency. However, if receipts are lost, validators will not be penalized, so both routing methods are employed simultaneously.

Toncoin utilizes a high-dimensional hypercube structure to expedite communication between different shards. By constructing a multi-dimensional topological structure, Toncoin effectively shortens message delivery paths, reduces cross-shard communication delays, and significantly enhances the efficiency of cross-shard information transmission and processing.

This technological innovation ensures low-latency cross-chain interactions and transactions, making it suitable for applications with high real-time requirements. Toncoin’s high-dimensional hypercube structure represents a substantial advancement in blockchain system performance, providing robust support for rapid and efficient cross-chain information transmission and processing.

Self-Healing Vertical Blockchain

On Toncoin’s main chain, each block within shard chains is treated as a miniature blockchain, referred to as a vertical blockchain. If errors occur in shard chain blocks, new blocks are submitted to the vertical blockchain. These new blocks can replace invalid horizontal blockchain blocks or describe the differential parts of previous versions of blocks that need modification. When the vertical blockchain grows faster than the original blockchain, new versions can replace the original ones. This mechanism ensures the stability and reliability of shard chains and contributes to the overall operation of Toncoin’s main chain.

Toncoin applies practical self-healing vertical blockchain technology, capable of correcting invalid blocks without forking to maintain system consistency and stability. When invalid blocks are detected, this mechanism automatically corrects them without complex system rollbacks or forking operations, thereby reducing the complexity of network maintenance. This approach not only enhances the reliability of the entire network but also reduces potential security risks, ensuring continuous and stable system operation. This self-healing capability enables the Toncoin blockchain system to handle various exceptional situations effectively.

Asynchronous Smart Contract Calls

In Toncoin, calls between smart contracts are asynchronous. This means that when one smart contract calls a method of another smart contract, the execution does not happen immediately but is scheduled for processing in a future block. This design helps improve scalability because it avoids the need to complete all transaction processing within a single block. However, asynchronous execution also increases the complexity of developing and maintaining applications on the Toncoin chain. Developers need to carefully manage the sequence and timing of transaction executions to ensure that calls between smart contracts are handled correctly.

Advantages Compared to Competing Projects on the Same Track

Toncoin, as a high-performance L1s project, competes directly with other high-performance public blockchains such as Ethereum, Solana, and Arweave AO.

Superior On-Chain Performance

Toncoin excels in on-chain performance with fast block confirmation and transaction speeds, robust support for extensive sharding, and faster inter-shard communication compared to Ethereum. Unlike Ethereum, Toncoin can create a dedicated chain for each user wallet, enabling shard-based parallel computation and facilitating rapid cross-shard communication. TVM’s asynchronous computing support provides the theoretical basis for achieving high TPS (Transactions Per Second). These unique features give Toncoin a competitive advantage in the blockchain industry, providing users with an efficient, fast, and secure environment for transactions and communications.

Resource Payment

In Toncoin, smart contracts incur their resource costs, requiring a specified amount of TON tokens to execute computations, storage, and network transmissions. This design mechanism shifts the cost burden away from users directly but mandates that smart contracts maintain a sufficient balance of TON tokens to cover execution costs. When a smart contract’s TON token balance is depleted, it is automatically deleted, preventing blockchain data inflation through this automatic cleanup mechanism. Therefore, smart contract owners must ensure their contracts always hold enough tokens to sustain normal operations, avoiding deletion due to insufficient funds. This requirement encourages smart contract owners to carefully consider resource consumption and token management during contract design, ensuring long-term stable operation.

Asynchronicity

In Toncoin, calls between smart contracts are executed asynchronously. This means that when one smart contract calls a method of another, the call is not executed immediately but is instead processed in a future block. This design improves scalability because it eliminates the need to handle all transactions within a single block. However, it also presents challenges for maintaining transaction consistency and atomicity. For instance, if Contract A calls a method of Contract B, the call won’t be executed right away but in a future block after Contract A’s transaction has concluded. In other words, the call to Contract B might be processed before Contract A’s transaction is completed. Asynchronicity is a core design feature of Toncoin, providing higher scalability and flexibility, but it also increases the complexity of development and maintenance.

Significant External Traffic

Toncoin, a project founded and supported by Telegram, benefits immensely from the massive user base of Telegram. Despite Telegram’s withdrawal from the Toncoin project due to SEC interference, it continues to drive traffic to Toncoin. As we know, whether in Web 2 or Web 3, traffic is key to success. No matter how well-designed a project is, it can face failure without sufficient traffic. Telegram boasts billions of registered users and 900 million daily active users, with a daily increase of 2.5 million users. Essentially, Telegram itself is a massive traffic source. Continuously driving traffic to Toncoin and deploying various mini-programs on its blockchain, Telegram gives Toncoin an unparalleled advantage over other L1s projects.

In summary, Toncoin, as an L1s project, boasts superior performance, resource payment mechanisms, and asynchronous execution features, giving it a foundational advantage over other public chains. Additionally, Toncoin leverages the vast traffic source of Telegram, providing it with an unparalleled edge in user acquisition compared to other blockchains. The continuous traffic driven by Telegram constitutes Toncoin’s most critical competitive advantage.

Project Model

Business Model

The economic model of Toncoin consists of three roles: PoS miners, application developers, and blockchain application users.

PoS Miners: Toncoin’s validation nodes play a crucial role in securing the network and storing data by following the PoS and BFT hybrid consensus mechanism after staking TON tokens. In return for their contribution to network security and data storage, Toncoin rewards validators with TON tokens. Currently, the newly minted TON tokens are only distributed through staking rewards to nodes, with an annual APY of approximately 4.2%.

Application Developers: As an L1s project, one of the key factors determining the success of Toncoin is the prosperity of its ecosystem. Therefore, Toncoin places great emphasis on ecosystem development, providing developers with ample space for innovation. Additionally, due to Toncoin’s resource payment model, developers must maintain a long-term holding of a certain amount of TON tokens to ensure their smart contracts are not deleted due to a zero balance.

Blockchain Application Users: Users paying gas fees on Toncoin are the primary source of the project’s revenue.

From the above analysis, it is evident that Toncoin’s revenue comes from:

• Gas fees paid by application developers and blockchain application users.

Token Model

According to the whitepaper, the initial total supply of TON was 5 billion tokens. The token distribution initially allocated 1.45% to the team, with the remaining 98.55% mined through PoW in the early stages. The network consensus has since transitioned from PoW to PoS, and the total supply of TON increases at an annual inflation rate of approximately 0.6% to reward PoS miners. The current total supply of TON tokens is 5,107,844,288.

In February 2023, the TON community approved a proposal to optimize the TON token economic model. This proposal temporarily freezes inactive mining wallets for 48 months. These wallets have never been activated and show no outgoing transactions in their history. Currently, 312 inactive mining wallets are holding over 2.07753 billion TON, accounting for approximately 41.55% of the total TON supply at that time. Presently, PoS validators have staked 591.7 million TON. The circulating supply is 2,438,615,865 TON, with a circulation rate of 47.74%.

From the TON token model, it is evident that although the total supply of TON tokens is fully circulating, the economic model optimization and token staking result in a relatively low circulation rate. Additionally, the project’s team holds a very small percentage of the total tokens.

Token Utility

According to the whitepaper, TON is utilized in the Toncoin network as follows:

1. Miner Rewards: Nodes in the network, also known as miners, adhere to Toncoin’s hybrid PoS and BFT consensus mechanism to secure the network and store data. They are rewarded with TON tokens for their efforts.
2. Transaction Fees: Users conducting transactions on the blockchain must pay transaction fees in TON tokens.
3. Staking: To become a validator node, one must stake TON tokens.
4. Purchase Scenarios: Through the Telegram wallet, users can purchase TON directly using a credit card. TON can be used to buy virtual goods such as anonymous accounts.

TON Value Assessment

According to the whitepaper, in June 2023, the TON community proposed a deflationary burn mechanism for Toncoin. This mechanism effectively burns 50% of all transaction fees received by validators, including transaction and storage fees. Additionally, Toncoin not only incorporates a staking mechanism for TON tokens but also saw the community pass a TON token economic model optimization proposal in February 2023. This proposal temporarily freezes inactive mining wallets for 48 months. These wallets have never been activated and have no outgoing transactions in their history.

These two proposals, along with the staking mechanism, have reduced the circulation rate of TON tokens from 100% to 47.74%, demonstrating a significant impact. Currently, the inflation rate within the Toncoin network is 0.6%, which is relatively low. However, as Telegram continues to drive traffic to Toncoin, increasing the number of active users on the network, and with the current cryptocurrency bull market, there will likely be very active on-chain behavior in the future. Furthermore, due to the proposed deflationary burn mechanism, TON tokens might experience deflation in the future.

In summary, the TON token has been significantly empowered by the Toncoin project team and the community. Its value is expected to rise in the future as the ecosystem thrives.

Token Price Performance

Based on data from Coingecko, TON has increased in price by over 6 times from May 2023 to now, with a low of $1.21 and a high of $8.17. TON’s daily trading volume is $346 million, and its circulating market cap is approximately $17.814 billion. Although the turnover rate is only 1.94%, which is relatively low, this is largely due to the current overall market downturn and the influence of broader macroeconomic instability, causing many users to adopt a wait-and-see approach.

TVL

The chart shows that Toncoin’s Total Value Locked (TVL) has been on a consistent upward trend.

User Count

The chart shows that Toncoin’s user count has maintained a high growth rate.

Staker Count

Ecological Project

The chart shows that although Toncoin’s total network staking volume declined after May, it has slowly started to recover in the past month.

The TON ecosystem has seen rapid development in recent months. One of Toncoin’s biggest advantages is its integration with Telegram, which drives traffic to Toncoin through mini-programs and small gaming projects deployed within Telegram. This influx has significantly accelerated the growth of the TON ecosystem, making it one of the few hotspots in markets that previously lacked much attention.

Toncoin itself employs asynchronous smart contract invocation technology, which inherently poses challenges and delays in DeFi development within the ecosystem. However, this indirectly underscores that Mass Adoption is the true future for Toncoin. Initially likened to decentralized applications and service platforms akin to WeChat, Google Play, or the App Store, TON aims to be a decentralized alternative for Visa and Mastercard payment processing services. This means TON is not just a cryptocurrency but a robust ecosystem capable of offering users a variety of services and applications.

As more people adopt TON and more applications and services migrate to this platform, its potential will be fully realized. Toncoin thus focuses its ecosystem development on plugin projects similar to WeChat mini-programs, aiming to capture market share from meme coins within the Solana ecosystem.

Notcoin

Notcoin aims to attract users through gamification and will operate on Telegram. Users can earn NOT tokens by tapping on a coin icon displayed on their screens. This “Tap to Earn” game mechanism quickly garnered a large following and accumulated a sizable user base within a short period.

Developed by Open Builders, Notcoin leverages Toncoin’s high scalability, security, and efficiency, providing an ideal platform. Furthermore, Notcoin introduces users to the Web3 community through its gamified mining mechanism, further promoting the application of blockchain technology. Since its debut in November 2023, Notcoin has gained significant global attention, attracting over 35 million players with 6 million daily active users. Its viral propagation model not only increases user engagement but also promotes the adoption and development of cryptocurrencies.

Notcoin’s success is attributed to its innovative gamification design, primarily centered around a repetitive tapping mining mechanism. Users mine tokens by continuously tapping the screen, making it accessible for non-crypto users and lowering the learning curve associated with blockchain technology, thereby driving the expansion and development of the cryptocurrency market.

Additionally, Notcoin strives to build an open, fair, and transparent gamified platform. Leveraging blockchain’s immutability and transparency, it ensures fairness and security in user earnings, further enhancing user confidence in the Notcoin project.

As an innovative cryptocurrency project, Notcoin has successfully captured the attention and participation of a large user base through its gamification approach.

Hamster Kombat

Hamster Kombat is a Telegram-based clicking game that incorporates features of a cryptocurrency trading simulator. In this game, players assume the role of the CEO of a cryptocurrency exchange and aim to elevate the exchange to unprecedented heights. Players earn virtual currency by continuously clicking on a hamster character.

Beyond clicking to earn virtual currency, the game integrates elements of financial education. Players accumulate wealth by clicking and upgrading their hamster team. The game is designed to be simple yet highly engaging, allowing players to quickly immerse themselves in the experience. With over 100 million global users, it has become one of the most popular games on the market.

Hamster Kombat not only provides casual entertainment but also cleverly integrates investment concepts, offering players a challenging and adventurous gaming environment. It simulates cryptocurrency trading, allowing players to learn financial knowledge and investment skills in a fun and relaxed gaming experience. By clicking and upgrading their hamster team, players can experience the joys and challenges of investing, while cultivating their financial management abilities.

Players can experience the fluctuations and challenges of financial markets within a light-hearted gaming atmosphere, learning financial knowledge and investment skills through continuous clicking and team upgrades. The game offers diverse gameplay content and challenges, allowing players to enjoy the thrill and challenges of investing.

Hamster Kombat combines casual entertainment, financial education, and investment simulation to create a new gaming experience for players. Through clicking and upgrading their hamster team, players can learn financial knowledge and investment skills in a fun and relaxed gaming environment, experiencing the joys and challenges of investing. With its continued growth, Hamster Kombat is expected to attract more players and become a highly regarded game product.

Tapswap

Tapswap is a Telegram-based clicking game that falls under the category of “Tap to Earn” games. Within the Telegram messaging app, players can earn TAPS tokens by tapping on the screen. Since its release on February 15, 2024, Tapswap has rapidly garnered attention and engagement from a large number of users.

The gameplay of Tapswap is straightforward: players simply tap the large button in the center of the screen to earn in-game currency. This direct and simple game approach has attracted a significant player base, quickly establishing Tapswap as a popular cryptocurrency gaming project.

In addition to its launch on Telegram, Tapswap plans to expand its influence by launching on Toncoin, aiming to broaden its reach. The application of blockchain technology will bring more possibilities to Tapswap, providing ample room for development in the cryptocurrency field.

While Tapswap is not currently listed on mainstream cryptocurrency exchanges, its potential entry into the market can be anticipated following the success of projects like Notcoin. With the continuous evolution of the cryptocurrency industry, Tapswap, as a highly anticipated gaming project, is poised to attract more investors and players. Leveraging its simple tapping mechanism and wide user base, Tapswap has become a notable cryptocurrency gaming project.

Catizen

Catizen is a cat-themed game based on the TON ecosystem, integrating elements of the metaverse, GameFi, and AI technologies to offer a highly immersive and interactive experience. Developed by Pluto Studio, Catizen draws on the experience gained from previous TON ecosystem GameFi projects like Tap Fantasy.

At its core, Catizen combines virtual cats with the real world to provide players with a more realistic and enriching gaming experience. Leveraging advanced metaverse technology, players can interact with virtual cats in the game and earn profits through GameFi mechanisms. Additionally, Catizen utilizes advanced AI technology to imbue virtual cats with vivid, lifelike behaviors and personalities, allowing players to establish closer relationships with them.

As a game project based on the TON ecosystem, Catizen fully utilizes the advantages of blockchain technology to ensure the security and transparency of game assets. Through blockchain technology, players can verify the authenticity and credibility of their earnings and assets in the game, while also enjoying efficient and low-cost transaction experiences. Beyond being a gaming platform, Catizen is committed to bridging the virtual and real worlds by collaborating with the community to rescue stray cats. Through partnerships with animal welfare organizations, Catizen will undertake activities to rescue stray cats in the real world and encourage player participation in these efforts.

Currently in its second phase of user expansion, Catizen is preparing to launch the LaunchPool mode, where players can earn in-game tokens $wCATI by staking game assets. This initiative aims to incentivize active player participation and inject new vitality into the game ecosystem. Additionally, Catizen will continue to refine its community governance mechanism, encouraging community members to participate in project decisions and collectively promote the healthy development of the Catizen ecosystem.

MOMO AI

The MOMO AI project is an AI-driven gaming and social growth platform based on the TON and Solana ecosystems. It leverages an independently developed AI-agent system to provide users with rich gaming experiences and social interaction features.

In MOMO AI, players plant virtual trees and manage them by collecting points called “Kiwi” to upgrade their trees. As players accumulate Kiwi points, they can increase the level of their trees to enhance the efficiency of Kiwi point production. Alongside gameplay, players can use AI agents to interact with the game through natural language, such as setting commands for automatic Kiwi point collection. The AI not only responds to player commands but also offers personalized game suggestions and tasks based on the player’s gaming habits and preferences.

Players earn Kiwi points through game activities, which can be exchanged for MOMO AI’s native token $MTOS. Additionally, by referring to new players and sharing game content, players can earn extra Kiwi points and token rewards, incentivizing them to spread and promote the game.

Since its launch, MOMO AI has rapidly attracted 1 million organic users within just two months, with monthly active users exceeding 700,000 and daily active users surpassing 160,000. This rapid growth underscores MOMO AI’s popularity and potential in the market. The project harnesses AI technology to offer users enriched gaming experiences and social interaction features, aiming to provide more personalized and high-quality gaming experiences.

MOMO AI’s development is closely intertwined with strategic cooperation with TON. Through collaboration with TON, MOMO AI aims to leverage the performance advantages and ecosystem resources of the TON network, providing users with a stable and efficient gaming experience. Furthermore, MOMO AI seeks to inject new vitality and innovation into the TON ecosystem, driving continuous development across the entire ecosystem.

Future Plans

Detailed plans for Toncoin’s future development are outlined on the project’s official website.

Project Risks

1. Toncoin’s ecosystem developers use two types of programming languages: FUNC, which is challenging to use, and Fift, a lower-level language that includes TVM and Fift assembly instructions, posing even higher difficulty. The complexity of these development languages, coupled with TVM’s incompatibility with EVM and SVM languages commonly used in the industry, presents significant development challenges for the project.
2. While Toncoin benefits from significant traffic generated by its association with Telegram, past SEC regulatory history suggests potential ongoing risks for Toncoin. These risks could negatively impact its operations and future development. Additionally, due to Toncoin’s close ties to Telegram, any legal, public relations, or economic issues involving Telegram could potentially create ripple effects affecting Toncoin. This connection may influence investor confidence, user adoption rates, and overall market perception of Toncoin.
3. Despite Toncoin’s community proposal to forcibly lock 41% of tokens in the token economic model until February 2025, which will then unlock entirely, increasing the circulating supply by 1.21 times the current liquid token total, potentially impacting Toncoin’s price.
4. Although the Toncoin community has proposed a deflationary mechanism to burn 50% of all transaction fees received by validators, based on current daily transaction volumes, only about 500 TON are burned per day, which is negligible compared to the over 30 million TON increment annually.

Summary

Toncoin adopts four key technologies — Infinite Sharding Technology, Instant Hypercube Routing, Self-healing Vertical Blockchain, and Asynchronous Smart Contract Invocation — to achieve outstanding scalability as an L1 project. It boasts superior performance, resource efficiency, and asynchronous capabilities, positioning it competitively against other public chains. Toncoin leverages Telegram’s vast user base for customer acquisition, providing an unparalleled advantage compared to other public chains, making Telegram’s redirection its core competitive edge.

However, Toncoin’s ecosystem developers face challenges with two high-complexity programming languages, FUNC and Fift. TVM’s incompatibility with EVM and SVM, languages preferred by most developers, presents significant development hurdles. Despite Toncoin’s affiliation with Telegram, past SEC regulatory actions suggest ongoing risks that could adversely affect its operations and future development. The close association between TON and Telegram means that any issues involving Telegram could potentially impact TON, affecting investor confidence and overall market perception. Furthermore, while Toncoin’s community has proposed token economic model optimizations and a deflationary burn mechanism, concerns remain about token unlocking and the minimal impact of token burning on TON’s price stability.

In conclusion, Toncoin’s unique technological architecture positions it as a leader among existing public chains, reinforced by Telegram’s substantial user base that other public chains cannot match. Its innovative future plans, if fully realized, promise to solidify Toncoin’s absolute technological superiority in the public chain race.