What is the reason for TON's surge?

Author: Wyz Research, DetectiveTON

What makes a public chain with no listing on Binance and an underdeveloped ecosystem rank high in market capitalization? This may be a question many industry practitioners want to ask.

On March 13, after a slight decline in the overall market, the TON public chain token Toncoin surged to $4.5 before retreating, and TON ecosystem projects also responded with gains, such as the TonUP token rising to $0.95, an increase of 20%.

Since TON was listed on the exchange OKX, the K-line trend of the Toncoin token has formed a clear "W" shape during the small cycle from 2022 to 2024, creating a W bottom that K-line enthusiasts love.

Moreover, from trading data, TON's price has risen over 200% within 2024, and over 400% in six months. As the price rises, the trading volume of the token has surged, with the trading volume in the past three weeks being about four times that of a month ago.

Even more noteworthy is that with the price reaching $4.5, TON's total market capitalization exceeded $15 billion, ranking 11th in the cryptocurrency leaderboard (excluding stablecoins and pegged coins), highlighting its value performance.

When we compare these tokens in the top 30 rankings, we also find that TON is the only token that has not been listed on Binance. Without the liquidity support of the world's largest exchange, TON has already occupied a high market capitalization position with its current circulating supply.

In comparison to other ecosystems, the number of TON ecosystem projects is not large. So what exactly has driven the token price up, allowing TON and its ecosystem to stand out?

Finding Analytical Entry Points from Token Price Increase Logic

We attempt to find the reasons to explore its future development space. According to basic logic, the rise in token prices comes from increased buying pressure, continuously pushing up the price of each transaction, which can be clearly seen from recent trading volumes.

In this process, external buying is one factor, and the second is the market makers of TON tokens. In the cryptocurrency trading market, market makers can sense market buying and selling trends through market-making data, actively driving prices up with market enthusiasm, keeping prices fluctuating within a relatively stable threshold.

In this line of thought, market makers actively push prices, while external buying investors make purchases after their own judgments, which can be influenced by external environments and certain influencers.

Lastly, TON's characteristics compared to other ecosystems may have the ability to attract users and investors, or the ecosystem can form a self-driven trend to boost its valuation.

Therefore, we attempt to find reasons from three parts.

They are:

1. Who are the influencers in a bull market?

2. Who are the market makers?

3. What is supporting TON's market capitalization and liquidity?

Influencers of TON

When searching for TON on X, most of the recent news is related to TON and Telegram's founder Durov. However, when you open Durov's account, you will find that his tweets stopped in 2022, but his Telegram continues to be updated, currently boasting over 2 million subscribers. This shows that although Durov has left the Twitter platform, his influence has grown larger. Along with Durov's influence, Telegram's user base has also increased significantly. According to the latest official disclosure, Telegram now has over 900 million monthly active users.

Around the time of publication, most users are discussing the recently exposed Durov's wallet address, which holds a large amount of TON tokens.

Additionally, there are two major news leads recently. One is that Durov indicated he might lead Telegram to an IPO. To the outside world, TON is inseparable from Telegram, which has become the biggest trump card for TON's users and business potential. If an IPO occurs, it will provide tremendous support for the TON ecosystem from a value capture perspective.

The second piece of news is that Durov proposed a solution to the centralization impact of TON and investment returns. Since Telegram has adopted TON tokens as payment for advertisements, some users are concerned that Telegram holding too many TON tokens could negatively affect decentralization.

To limit Telegram's holding of TON to no more than 10% of the supply, Durov proposed a plan to sell the excess TON to long-term investors at a price below the market price, locking in TON, stabilizing the ecosystem, and reducing volatility.

These actions clearly indicate that every project founder is the communication center of the entire ecosystem and a representative of its legitimacy. Durov's endorsements are the core of TON's strong presence and a strong booster in the development of the ecosystem trend. From Durov's subjective actions, we can predict that in any situation, TON and Telegram will not be separated and are closely linked, just like the integration of Telegram and TON in the Web2 and Web3 models.

When we first use Web3 assets or wallets in Telegram's Web2, you will be surprised to find that your personal account page has a Wallet option. Within the Wallet, you can seamlessly exchange cryptocurrencies (using fiat or stablecoins, or trading between other tokens), and in any Telegram chat page, you can fully experience Web3 games or perform on-chain operations using Web2 interaction methods.

This may be the most significant disruptive step Durov has taken in pursuing his ideal of founding Telegram.

Who are the Market Makers of TON?

In the first paragraph, we discussed that the main internal driving force behind the token price increase lies with the market makers. So who are TON's market makers? There is no accurate confirmation from external sources, but from the disclosure of cooperative relationships, we can confirm the direction.

Currently, most market makers in the industry have capital attributes. The TON Foundation announced the establishment of a $250 million ecological fund, the Toncoin Fund, in April 2022, which received investments from Huobi, KuCoin, MEXC, DWF, and others.

Among these, besides exchanges, DWF is a well-known Web3 market maker in the industry. In addition to this investment, DWF Labs has also sponsored the TON hackathon and deployed two verification nodes on the TON blockchain.

Looking back at the price performance of projects that DWF Labs has invested in or made markets for, we can predict corresponding market-making styles. The project list includes CFX, Mask, YGG, SNX, ACH, RSS3, etc., but this is just a general inference from the market.

According to informed sources, the TON Foundation is also collaborating with other mainstream market makers, such as GSR. However, it remains uncertain whether these market makers possess the ability to actively push prices, so who the market makers pushing TON remains a mystery.

TON's Ecosystem Performance

Influencers and market makers are one of the main external performances, while more importantly, substantial growth and construction are the internal repairs of the public chain.

According to statistics from the TON official website, the entire ecosystem currently includes 602 application projects, divided into 19 categories: centralized exchanges, decentralized exchanges, staking, wallets, browsers, bridges, utilities, channels, NFT collectibles, chat, social, gambling, games, Jettons, NFT services, VPN, development tools, shopping, and launchpads.

Examples of DApps promoted by TON

By specifically calculating the number of projects in each category, we can conclude that exchanges, wallets, browsers, channels, utilities, NFT collectibles, chat, gambling, and games constitute a large portion of the quantity. If we only calculate the ecosystem applications based on on-chain application attributes, the number is around 300, with the main application types being games, bots, gambling, and DeFi.

From the overall application type perspective, most applications are a fusion of Web2 and Web3, with corresponding functional boundaries clearly defined. It can be said that TON ecosystem applications integrate the attributes of Telegram and Web3.

If you have experienced the application usage and built-in wallet functionality in Telegram, you will clearly find that Telegram serves as the external entry point for TON, and entering Web3 through this entry is extremely smooth.

All applications within the ecosystem consistently use Telegram as the entry and interaction method, with the wallet as the interaction tool.

The wallet also supports two trading methods for Web2 and Web3, allowing for smooth exchanges of TON using USDT, independent account transfers, and interactions with other applications. Additionally, it supports various calls and triggers.

Ultimately, it can be summarized that TON has achieved a complete integration within the Telegram ecosystem. Telegram exists in a Web2 form but embodies the spirit of Web3 and the decentralized core of TON as a super application. In Telegram, which has nearly 1 billion users globally, the TON token will become an absolute value performance outlet, and it is these applications that support TON's value.

As TON demonstrates the value of its native token, with applications supporting the native token and ecosystem construction, DeFi applications will carry similar value performances. For example, during the period of Toncoin's price surge, the TonUP token, which has the attribute of being the ecosystem's golden shovel, also achieved a short-term increase of about 300%. The rapid correlation is worth noting. As for ecosystem projects related to gaming, social, and other areas further from the native token business, they will be targets leaning towards backend rotation in the correlation response.

Additionally, the TON Foundation has recently been actively promoting ecological construction in areas like Meme and has launched the Open League liquidity incentive program, selecting core ecosystem projects including STON, DeDust, and TonUP for joint promotion, providing support of 50K TON. Statistics show that the number of TON ecosystem projects has increased by about 10% in the past six months, and after the price rise, more projects have joined TON, choosing launchpads like TonUP for IDOs.

On-chain data from TON verifies the current growth trend. First, according to DeFiLlama data, the TVL on the TON chain reached a new high after the price surge, with approximately 13.86 million TON locked, valued at around $56 million at its peak. Second, according to token terminal data, both the weekly and monthly active users of TON have reached new highs, with weekly active users surpassing 490,000 and monthly active users exceeding 730,000.

TON's on-chain active user data

Continuous Value Capture of TON in the Future

Although TON currently ranks high in market capitalization, it has two obvious characteristics compared to other ecosystems.

First, the number of ecosystem projects is insufficient, leaving significant room for expansion in the future. Additionally, among ecosystem projects, there are not many related projects designed based on the native token and mainstream tokens.

Second, TON currently lacks the release of huge trading potential. Recently, news of TON being listed on Binance has spread, and once confirmed, TON's trading potential will be released even more.

We are in a bull market, and expectations for tracks and ecosystems will translate into buying actions, essentially voting with our feet. The expectations set by TON, from Telegram's 1 billion users to the performance of the founding team and the ecosystem expectations, have kept the market eager.

When we discard the external flashy terms, the core of TON's value capture still comes from the platform value of Telegram:

1. The valuation of 1 billion internet users.

2. The liquidity demand generated by using TON as advertising fees within the platform.

3. Telegram's ability to acquire customers through convenient and smooth marketing communication.

4. The product integration design that completely breaks the entry barriers to Web3.

Referring to any platform with such characteristics, the value that TON aims to capture can be continuously provided, and businesses closely related to TON and its ecosystem, whether it be the previously mentioned golden shovel TonUP, or Dex STON, DeDust, or gaming Notcoin, will all benefit immensely.

Of course, long-term gains lie in persistent holding and construction, while the biggest breakthrough point in the short term remains the listing on Binance. Currently, Binance has already launched TON's perpetual contracts, and news of TON's spot trading being launched is still fermenting. Observing the recent actions of the foundation, it seems they are actively preparing, and similarly, both new and old investors in the market are eagerly awaiting.

PS: This article primarily presents how to track the driving factors behind a token's price surge and does not constitute investment advice. Additionally, this analytical logic is more suitable for unidirectional trends.