Foresight Ventures: How did the TON chain become popular again? What are the participation opportunities in the ecosystem?

Author: Maggie@Foresight Ventures

Since July this year, the popularity of Unibot has led a wave of "Crypto Bots" on Telegram. Coupled with the launch of the Telegram Wallet at Token2049, the TON chain has returned to the public's attention. This article will take you through the events surrounding this phenomenon and explore entrepreneurial/investment opportunities within the TON ecosystem.

• Distinguish between Telegram, "Crypto Bots," and the TON blockchain.
• Understand how the TON chain has become popular again.
• Explore the ecological status of the TON chain and identify entrepreneurial/investment opportunities within the TON ecosystem.

TL;DR

• Telegram is an instant messaging software with over 800 million active users, providing significant support for the TON chain. The TON Dapp Bots on Telegram (similar to WeChat mini-programs) have great potential.
• Technically, the TON chain was designed from the outset to support Telegram's vast user base, with a primary design principle of high performance, capable of supporting millions of TPS. The development of contracts on the TON chain differs significantly from other chains, presenting certain development challenges.
• Ecologically, the TON chain's ecosystem is still in its early development stage, with substantial potential, particularly in the large payment sector, which may be a strong area for the TON chain.

1. Distinguishing Concepts: Telegram, "Crypto Bots" (Unibot), TON Chain

First, we need to clearly distinguish these different products.

Telegram

Telegram is the world's fourth-largest instant messaging software, with over 800 million monthly active users, widely used in the Crypto field.

In addition to instant messaging, it has added product features such as Stories, Wallet, Mini-bots, etc. Just like WeChat, which offers not only chat but also Moments, WeChat Pay, and WeChat mini-programs.

"Crypto Bots"

Telegram bots are small applications that run within Telegram, similar to WeChat mini-programs. The "crypto bots" we refer to are Telegram bots that facilitate the use of Crypto Dapps like Uniswap conveniently within Telegram.

TON Chain

The TON chain is a high-performance public chain that was initiated in 2018.

The TON wallet has a primary entry point "Wallet" on Telegram, connecting TON, BTC, and displaying the balance of USDT on Tron.

In the TON wallet, there is a TON Space, which is a non-custodial wallet that only connects to the TON chain.

There is an Apps Center on Telegram that hosts Web3 Dapps, and most of the applications there are on the TON chain. In the future, it may be moved to Wallet/TON Space.

At this point, what is the relationship between Unibot and the TON chain? I believe you have an idea.

The answer is: there is no relationship. Crypto bots like Unibot are bots on Telegram (equivalent to "WeChat mini-programs") .

Unibot allows users to exchange tokens within Telegram, connecting to the Uniswap protocol on the Ethereum chain, not the TON chain. Therefore, Unibot has no relation to the TON chain.

2. Development History of the TON Chain

In simple terms, the development history of the TON chain can be divided into three stages.

Before 2021: Sued, abandoned, and the project was once stalled.

In 2018, the Telegram team began exploring blockchain solutions suitable for Telegram and designed the TON blockchain.

In the first quarter of 2020, Telegram was sued by the U.S. Securities and Exchange Commission, fined $18.5 million, and refunded $1.2 billion to investors, leading Telegram to abandon TON and halt its development.

2021 to 2022: In the fourth quarter of 2021, some "Side Features" and infrastructure were launched, such as cross-chain bridges, storage services, DNS, etc.

In 2021, a small team of open-source developers called NewTON restarted the development of the TON blockchain. NewTON was renamed the TON Foundation in 2021.

In the fourth quarter of 2021, exchanges were established on the TON chain.

From 2021 to 2022, Side Features and infrastructure such as TON DNS, TON Storage, and cross-chain bridges were developed. Note: "Side Features" is not an official term; it simply refers to features outside the main functionalities of the blockchain.

2023: Unibot and other Telegram Bots like Bananagun gained popularity, and the TON wallet was added to Telegram, leading to a renewed appreciation of TON's value. The price of Toncoin rose from 1.2 to 2.2 in two months, and its market capitalization entered the top 10.

Before the Token 2049 event held in August, many questioned the relationship between the TON Foundation and Telegram. It wasn't until Telegram launched its crypto wallet during the Token2049 event in Singapore, developed on the Open Network (TON) blockchain, that it became available to Telegram's 800 million global users. After the TON wallet was integrated into Telegram, the price of Toncoin surged, and its market capitalization rose to the top 10.

The TON wallet has a primary entry point on Telegram, equivalent to WeChat Pay.

Dapps on the TON chain have better exposure on Telegram, benefiting from the use of non-custodial wallets, which enhances security.

3. Technology of the TON Chain

The TON chain was designed from the outset to support Telegram's vast user base, thus its primary design principle is high performance.

High Performance: Supports millions of TPS (requires sharding to be enabled). To achieve high performance, the TON chain has made the following technical choices regarding chain structure, consensus algorithms, etc.

Chain Structure: Multi-chain architecture with infinite sharding. TON has one main chain that can accommodate up to 2^32 working chains, and each working chain can be subdivided into up to 2^60 shard chains. Once sharding is enabled, including sharding TPS, it is claimed that TON can support millions of TPS.

Consensus Algorithm: Uses POS consensus algorithm. Nodes stake to become validators, who are assigned to the main chain and different shard chains, running a BFT consensus algorithm to reach consensus on blocks within an epoch. Many high-performance blockchains use a POS+BFT consensus algorithm design. TON's consensus algorithm can be considered a variant of the BFT algorithm, which is deterministic and efficient, with the only issue being its inability to support a large number of validators. TON uses a deterministic pseudo-random method to group validators, serving the main chain and various shard chains.

Message Routing Between Shard Chains: Hypercube instant routing reduces latency in message routing between shard chains. TON is designed as a tightly coupled multi-chain, allowing the global chain (the main chain is the default global chain) to send any message directly to a specific account, while messages sent from other chains can only be routed through shared chains based on the network conditions of the system's shard chains. The entire shard chain network forms a hypercube network, requiring hop counts of log16(N) for a hypercube network of size N. Thus, only 4 routing nodes are needed to support millions of shard chains (for larger scales, 5D or 6D cubes can be used to reduce routing nodes).

Asynchronous Calls for Smart Contracts: Facilitates parallel execution of transactions. The design of asynchronous calls makes it easier for transactions to be executed in parallel, but it lacks the atomicity of synchronous architectures like EVM. If you make three consecutive contract calls, only the last call may fail, and if you need to roll back changes, manual intervention may be required.

Smart Contract Virtual Machine: TVM.

TVM is a non-EVM virtual machine, and developing TON smart contracts requires using FunC or TACT languages. This means that EVM projects cannot be easily ported to the TON chain.

Smart contract calls on TON are asynchronous. This also requires developers to adapt.

Side Features: Characteristics beyond the main functionalities of the blockchain.

TON Storage: A decentralized file storage system that can store files for users.

TON DNS: Assigns readable names to accounts, smart contracts, services, and nodes.

TON Pay: A micropayment channel that enables instant off-chain transactions.

TON Proxy: A network proxy service for the TON network that hides the IP addresses of TON nodes, protecting user privacy.

Technical Issues to Address

Side Features need to improve development speed. Core functionalities have largely been completed, but some features remain inactive. The development progress of Side Features is slow, and there are still few users.

Faster proposal processing and increased documentation. The TON Foundation is also working to address the lack of documentation to reduce the difficulty for developers.

4. TON Chain Ecosystem

The TON chain hosts various Dapps, including DeFi and GameFi, with a TVL of only $10 million (as of October 7, 2023) on Defillama. This number may seem low when compared to others.

Clearly, as of October 7, 2023, TON has a market capitalization of $7.6B, ranking in the top 10, but its TVL is far lower than that of Solana and TRON, indicating that the TON chain's ecosystem is still in its early stages and has significant potential.

From a technical perspective, to foster the growth of the TON ecosystem, we need to lower the development difficulty for Dapps and supplement more infrastructure.

Lowering Dapp Development Difficulty

More comprehensive documentation, more development tools, and Dapp developer education are needed. TON's smart contracts primarily use the FunC language, meaning Solidity contracts cannot be directly ported to the TON chain. FunC is complex, and there are few developers. Therefore, the later introduction of the TACT language aims to reduce development difficulty, as the TACT compiler can compile TACT into FunC. Although TACT is designed to be simple, it still has a significant learning curve. Thus, more comprehensive documentation, tools, and education are necessary.

More contract templates are needed. Currently, there are few smart contract templates on TON, and while some existing token contracts are well-designed, they are difficult to modify.

Better contract debugging tools and reduced auditing difficulties. After developers create contracts using the TACT language, they are compiled into FunC contracts, and sometimes developers are unsure whether the compiled FunC contracts are correct. Therefore, when debugging contracts, developers often adjust not only the TACT language but also the FunC contracts directly. Thus, better contract debugging tools are desired to help developers debug smart contracts easily, at least allowing them not to have to adjust FunC contracts. Additionally, there are few auditing cases for contracts, audits are slow, and many auditing firms are also new to TACT and FunC.

Supplementing Infrastructure

Expanding the support range of cross-chain bridges. The official bridge supports TON/ETH and BSC. Other bridges may also support Polygon and some lower market cap chains. Introducing Oracles. DeFi, especially lending protocols, requires Oracles, and there are currently no available Oracles on the TON mainnet. It is said that Oracles are already running on the testnet.

5. Outlook for the TON Chain Ecosystem

We can compare the Crypto bots on the TON chain with non-TON chain bots, and TON has a significant advantage on Telegram.

In this context, what entrepreneurial/investment opportunities exist within the TON ecosystem?

The large payment sector is where the TON chain has the most advantages and significant potential. Compared to some crypto ecosystems that focus solely on pure Web3 projects, the TON chain benefits from Telegram's strong entry point, allowing for more projects that integrate with the real world, such as payment transfers, life services, and financial management in WeChat Pay. This is where the TON chain has a competitive edge and significant potential.

Web3 Infrastructure. We mentioned that the technical infrastructure of the TON ecosystem (such as bridges, Oracles, etc.) still needs improvement. The infrastructure on ETH is already highly competitive, while the TON ecosystem's infrastructure still requires enhancement.

Gaming and social projects. Gaming and social Telegram bots may become the most popular projects in the TON ecosystem moving forward.

With the strong entry point of Telegram, TON chain games can more easily reach users on Telegram.

Users do not need to download a client or go through a complicated registration process; they can "use it immediately" on Telegram, reducing the cost of user experience in gaming.

At the same time, leveraging Telegram's "social + gaming" aspect can tap into people's inherent desire for comparison, especially with familiar individuals, promoting the spread of applications.

TON's small gaming projects, especially those designed to be addictive, with short development cycles, and able to launch quickly, may become the first to gain widespread popularity.

DeFi projects. DeFi projects are undoubtedly crucial and potentially profitable, but their development may be slower. This is not only because the infrastructure that DeFi projects rely on still needs time to be built, but also because many large-scale DeFi projects are on ETH, making it challenging to absorb them all at once.

6. Conclusion

Telegram is an instant messaging software with over 800 million active users, providing significant support for the TON chain. The TON Dapp Bots on Telegram (similar to WeChat mini-programs) have great potential.

Telegram bots (similar to WeChat mini-programs) feature no downloads, immediate usability, smooth experiences, and the ability to interact with Telegram friends. Turning Dapps into Telegram bots can more easily reach Web2 users. The success of WeChat mini-programs gives us great expectations for the success of Telegram bots.

The advantages of TON on Telegram: Telegram has added a primary entry point with the Wallet that connects to the TON chain, offering a more secure non-custodial wallet, TON Space, and better exposure for applications in the Telegram Apps Center, with Telegram Ads available for TON ecosystem projects.

Technically, the TON chain was designed from the outset to support Telegram's vast user base, with a primary design principle of high performance, capable of supporting millions of TPS. The development of contracts on the TON chain differs significantly from other chains, presenting certain development challenges.

Developing smart contracts on the TON chain requires users to learn TACT and FunC languages and adapt to features like asynchronous contract calls.

To foster the growth of the TON ecosystem, it is essential to lower the development difficulty for contracts and supplement the infrastructure on the TON chain.

Ecologically, the TON chain's ecosystem is still in its early development stage, with significant potential, particularly in the large payment sector, which may be a strong area for the TON chain.

The large payment sector includes transfer payments, life services, and financial management on Telegram, which may be the TON chain's most advantageous area.

• There is still room for improvement in the infrastructure on TON.
• Gaming and social projects may become the first to gain widespread popularity.
• DeFi projects may develop more slowly, as many large-scale DeFi projects are on ETH, making it challenging to absorb them all at once.