What is TON?
The Open Network (TON) is a decentralised and open internet platform made up of TON Blockchain, TON DNS, TON Storage, and TON Sites. TON Blockchain is the core protocol that interconnects TON’s underlying infrastructure to form the greater TON Ecosystem.
In 2018, the Telegram Messenger team, led by brothers Pavel and Nikolai Durov, began exploring blockchain solutions for the messaging platform. However, no current Layer-1 blockchain network was able to support Telegram’s hundreds of millions user base, so the team decided to design their own chain, the Telegram Open Network – TON.
In the same year, Telegram raised $1.7B in a private sale of TON tokens (then called Grams) in one of the largest cryptocurrency offerings ever (ICO). The team then created two TON testnets in 2019, and one of them became open source while the other has been deployed until now.
However, in 2020, the project faced legal challenges as suited by the U.S. Securities and Exchanges Commission (SEC) and agreed to postpone the launch of TON until legal matters were resolved. Two years later, the TON Foundation rebuilt the ecosystem, and the astonishing growth of TON started from there.
You can find more information about the roadmap of TON in their official website.
TON – The Native Token of The Open Network
The native token of The Open Network is $TON, which is currently the 15th largest cryptocurrency in terms of market cap.
- Current price: $5.06/$TON
- Market cap: $12.58B
- Circulating supply: $2.48B
- Total value locked (TVL): $298.92M
- Fully diluted value (FDV): $25.88B
Tokenomics
1. Total token supply:
Total token supply is the total coins created minus the coins burnt. The figure is now 5.12B TON. Initially, the total token supply is 5B with no upper limit, growing at about 0.6% per year (approx. equals to 30 million tokens).
The supply is mainly controlled by the staking mechanism. Currently, the staking APY is at 3.73%.
2. Token utility:
Telegram users can use Telegram Wallet to purchase digital goods using $TON via credit cards. The tokens can also be used for conducting advertisements within Telegram.
3. Token distributions and economic model:
In the early days till June 2022, TON employed an Initial Proof-of-Work (IPoW) consensus mechanism. The initial token supply was set at 5 billion TON, and the team held 72.5 million TON (1.45%). The remaining 4.9275 billion TON (98.55%) was pre-mined.
The TON Believers Fund was introduced to give TON holders the option to lock their tokens for five years—starting with a two-year cliff, followed by a three-year linear release. The deposit period ended on October 23, 2023, during which roughly 1.033 billion TON were collected. With an additional 284 million in rewards, a total of around 1.317 billion TON are now locked in two years. Beginning on October 12, 2025, approximately 37 million TON will be released into circulation every 30 days across 36 installments. These measures have effectively removed approximately 2.4 billion TON from the circulating supply for a certain period.
The network then switched to a Proof-of-Stake mechanism, under which the Masterchain adds 1.7 TON per block, and each shard chain adds 1 TON per block.
4. On-chain distribution analysis:
Currently, 85.53% of users hold TON below $1k, 14.05% hold $1k — $100k, and a mere 0.42% of holders are classified as Richers, with holdings of $10k or more. Around 18.08% of holders have kept their TON for over a year, while the monthly holding rate is at 12.20%.
TON’s User Base
TON’s community is vibrant, with an enormous user base from Telegram and multiple groups and discussion channels for TON’s members. Telegram’s user base is experiencing rapid growth and is currently the fourth largest instant messaging app globally. As of January 2023, the platform has over 800 million monthly active users and attracts more than 2.5 million new users daily.
Similarly, TON has shown steady expansion, with over 3.5 million accounts recorded on the blockchain. Over the last six months, the platform has grown by 176%, while daily active users have increased by 154%, reaching 810,000. The network is expected to continue attracting around 1,500 new users daily, maintaining a consistent growth trend. The goal is for TON to capture 30% of Telegram’s user base by January 2022 and reach 500 million users by 2028.
Ton’s Framework and Technology
Adaptive Infinite Sharded Multi-Chain Architecture
TON’s sharding system operates from the bottom up, where account chains are initially grouped into shard chains. These shard chains allow for internal interactions and facilitate parallel transaction processing across multiple chains, forming a “blockchain of blockchains” structure.
There are three primary components of the TON’s architecture: the Masterchain, the Workchain, and the Shardchain.
1. Masterchain: Masterchain acts as the mastermind of the architecture or the central coordinating hub that is responsible for maintaining critical network data and ensuring proper communication across the blockchain ecosystem. There is only one Masterchain, which holds the protocol parameters, the validator set, and their shares, the currently active Workchains, and the subordinate Shardchains. To ensure the latest state can be determined, subordinate chains submit their latest block hashes to Masterchain. This ensures the most up-to-date information can be obtained when reading messages across different chains.
2. Workchain: Collectively, Workchain is a virtual concept consisting of multiple Shardchains. TON can accommodate up to 2³² Workchains, and each of them is customisable. This flexibility allows developers to adjust options such as address formats, transaction types, native tokens, and smart contract virtual machines (VMs), as long as they adhere to interoperability standards.
3. Shardchain: To enhance processing efficiency, each Workchain is further divided into Shardchains, with each Shardchain capable of accommodating up to 2⁶⁰ units. In fact, a Shardchain can automatically split into two when the load increases and merge back into one when the load decreases. Shardchains inherit the rules set by their corresponding Workchains
By employing this unique sharding architecture, TON can process transactions across multiple chains parallelly while maintaining coordination through Masterchain.
Message Delivery Mechanism
TON incorporates asynchronous message delivery and employs a message hypercube routing mechanism for efficient communication within the network.
In simple terms, asynchronous messaging allows participants in the conversation to freely start, pause, and resume conversational messages at their convenience, so they don’t need to wait for a direct live connection. In TON’s asynchronous systems, messages play a crucial role in communication between nodes. These messages are handled using the “send_raw_message” function in the FunC language.
Hypercube routing in TON allows messages created in one block of a segmented chain to be quickly delivered and processed in the next block of the target segmented chain.
- Asynchronous Message Delivery
In contrast to synchronous blockchains like Ethereum, each transaction in TON is executed on a single smart contract, and communication between contracts is achieved via messages. This ensures that a single transaction only affects and modifies the state of a single contract.
So in order for such systems to work effectively, TON introduces the concept of logical time, also known as Lamport time, for sequential event processing. Each message in the TON blockchain is assigned a “logical time” (Lamport time), which ensures that events are processed in the correct order. Messages are delivered based on their logical time, meaning earlier messages are processed before later ones.
- Hypercube Routing Mechanism
Now we will try to explain this algorithm in the most plausible way.
Let’s think of a hypercube network as a cube, but with more than three dimensions (like a 4D or 5D cube). Each node (the vertex) represents a point in this multi-dimensional space, and the edges (connections) between them allow messages to travel efficiently across the network.
Each node is connected to several other nodes based on its dimensionality. For example, in a 4D hypercube, each node is directly connected to 4 others.
The hypercube’s structure allows messages to take multiple possible paths between nodes. If a message needs to go from node A to node B, the hypercube ensures that it can take the shortest path, even if there are many nodes between them.
In TON’s case, the nodes represent shardchains.
They can be shardchains within the same working chain, shardchains across different working chains, and chains between the master chain and other working chains. Each chain is connected to a distinct hexadecimal number as an identifier.
Consensus Mechanism
Like Solana, TON adopts a derived version of an existing consensus mechanism to maintain its security and integrity. The network deploys the original Byzantine fault tolerance (BFT) and builds up what is called the Catchain Consensus.
The Catchain Consensus Mechanism consists of two main separate protocols: the Catchain protocol (more low-level and general-purpose) and the high-level Block Consensus Protocol (BCP) that deploys the Catchain protocol.
However, these are just the main protocols that differentiate TON’s consensus algorithm. The network’s protocol stack contains higher levels occupied by the block generations and validation levels. However, achieving consensus on the newly generated block is delegated to the Catchain protocol level.
Here is an approximate diagram of the protocol stack employed by TON for block generation and distribution:
- Top-level: Block generation and block validation software. Inputs are provided and outputs are handled by the lower-level protocols. This software is responsible for generating a new valid block for a blockchain (a shardchain or the masterchain of the TON Blockchain) or examining the validity of a block generated by someone else.
- Block Consensus Protocol: This protocol achieves Byzantine Fault-tolerant consensus within the current validator group to select the next block for the masterchain or a shardchain. It makes use of the block generation and validation software and is based on the lower-level Catchain protocol.
- Catchain protocol: This protocol ensures secure, persistent communication within an overlay network, such as a validator group for a shardchain or the masterchain. It also detects attempts of protocol violations or “cheating” by participants.
- Overlay broadcast protocol (TON Network): A straightforward broadcast protocol that disseminates messages across the overlay network. It forwards received messages to neighbours who haven’t yet received them, with minimal retention of undelivered messages.
- Overlay protocol (TON Network): This protocol manages overlay networks within the ADNL protocol network, maintaining neighbour lists and establishing connections (or “channels”) between them for efficient message broadcasting.
- ADNL protocol: The core protocol of the TON Network, responsible for delivering packets between nodes using 256-bit abstract addresses, which are cryptographic keys or their hashes.
Distinct features of TON
The key distinction between TON and other blockchain platforms like Solana and Ethereum lies in resource payment and asynchronicity, which brings advantages in scalability and flexibility, but also introduces complexities in application development and maintenance.
1. Resource Payment: In TON, each smart contract must pay its own resource costs. This means that smart contracts need to hold a certain amount of TON tokens and use them to cover the resources required for their operations, such as computation, storage, and network transmission. If a smart contract runs out of tokens, it is automatically deleted, preventing data bloat and ensuring efficient resource allocation.
2. Asynchronicity: TON processes interactions between smart contracts asynchronously rather than atomically. When one smart contract calls another, the execution is delayed until a future block, after the initial transaction is completed. This allows for more flexibility in handling complex interactions between smart contracts and enables efficient utilisation of network resources.
