Why TON is Soaring?

Why is a chain that is not listed on Binance and has an undeveloped ecosystem ranking high in market capitalization? This is likely a question many industry practitioners want to ask.

On March 13, after a small overall market decline, TON’s token Toncoin surged to 4.5 USD before retreating. Projects in the TON ecosystem also rose in response, with the TonUP token jumping 20% to a high of 0.95U.

Since TON was listed on OKX exchange, Toncoin’s price action formed a clear “W” pattern in the mini cycle from 2022 to 2024, creating the W bottom that K line enthusiasts love.

Moreover, looking at trading data, TON’s price has risen over 200% just in 2024 and more than 400% in the past six months. As the price climbed, token trading volume skyrocketed, with volume in the past three weeks about 4 times that of a month ago.

Even more remarkably, as the price hit 4.5 USD, TON’s total market cap exceeded $15 billion, ranking 11th on the cryptocurrency rankings (excluding stablecoins and pegged coins), highlighting its value performance.

When we compare these tokens in the top 30, we also find that TON is the only one not listed on Binance. Without the liquidity support of the world’s largest exchange, TON has already used its current circulating supply to occupy the high ground of market cap.

Compared to other ecosystems, the number of TON ecosystem projects is not large. So what exactly has pushed up the token price and made TON and its ecosystem stand out?

Finding an Entry Point from the Token Price Uprising

We try to find the reasons to explore its future development space. According to basic logic, token prices rise due to more buying, constantly pushing up the price of each transaction, which can be clearly seen from the recent trading volume.

In this process, external buying is one factor, and the other is the market making by TON token market makers. In the cryptocurrency trading market, market makers can always feel the market’s buying and selling trends through market-making data, and actively drive prices as market enthusiasm increases, keeping prices fluctuating within a relatively stable threshold.

Under this line of thought, market makers are actively pushing prices higher, while external investors will buy in after making their own judgments, which will be driven by the external environment and some influencers.

Finally, there is one more point. Compared to other ecosystems, TON’s characteristics may have the ability to attract users and investors, or the ecosystem can form a self-driven trend to promote ecosystem valuation.

Therefore, we try to find reasons in 3 parts:

  • Who are the influencers in the context of a bull market?
  • Who are the market makers?
  • What is supporting TON’s market value and liquidity?

TON’s Influencers

When searching for TON on Twitter recently, most of the news that appears is related to TON and Telegram founder Durov. But when you open Durov’s account, you’ll find that his tweets stopped in 2022, but his Telegram has been continuously updated and now has over 2 million subscribers. It can be seen that although Durov left Twitter, his influence has grown. Growing along with Durov’s influence is Telegram’s ever-increasing user base. According to the latest official disclosure, Telegram now has over 900 million monthly active users.

Before and after the publication of this article, most users are discussing the recently exposed Durov’s account address holdings, which include a large amount of TON tokens.

In addition, there are two other major news leads recently. One is that Durov indicated he may lead Telegram to an IPO. To outsiders, TON and Telegram are inextricably linked, and Telegram is already TON’s biggest trump card in terms of users and business potential. If an IPO happens, it will greatly support the TON ecosystem from a value capture perspective.

The second piece of news is that Durov proposed a solution to address the impact of centralization and investment returns in TON. Some users were concerned that Telegram holding too many TON tokens would negatively impact decentralization after it began using TON tokens as an advertising payment token.

To limit Telegram’s TON holdings to no more than 10% of the supply, Durov proposed a plan to sell excess TON at below-market prices to long-term TON investors using a 1-4 year lock-up period to stabilize the ecosystem and reduce volatility.

The above performances clearly demonstrate that every project founder is the communication center of the entire ecosystem and the representative of ecosystem legitimacy. Durov’s shilling is at the core of TON’s strong showing and a shot in the arm for ecosystem trends. From Durov’s subjective actions, we can predict that TON and Telegram will never be divided and governed separately under any circumstances, and will be closely linked, just like the integration of Telegram and TON in the Web2 and Web3 models.

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

This is perhaps the most important and disruptive step Durov has taken in pursuing the ideal of Telegram

Who are TON’s Market Makers?

In the first paragraph, we talked about how the main internal driving force for pushing up token prices lies in the hands of market makers. So who are TON’s market makers? There is no precise confirmation from the outside, but the direction can be confirmed from the disclosure of partnerships.

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

In addition to exchanges, DWF is a well-known Web3 market maker among industry. Besides investing this time, DWF Labs also sponsored the TON hackathon and deployed two validator nodes on the TON blockchain.

Researching the price performance of projects previously invested in or market made by DWF Labs can predict the corresponding market making style. The list of projects includes CFX, Mask, YGG, SNX, ACH, RSS3, etc., but this is only the market’s general inference.

According to insiders, the TON Foundation is also cooperating with other mainstream market makers such as GSR. But what remains uncertain is whether these market makers have the active ability to push prices higher. Therefore, who is pushing TON’s market making remains a mystery.

TON’s Ecosystem Performance

Influencers and market makers are one of the main external manifestations, but what’s more important externally is substantial growth and construction, which can be considered the public chain’s internal cultivation.

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

Calculating the number of projects in each category leads to the conclusion that exchanges, wallets, browsers, channels, utilities, NFT collections, chat, gambling, and games make up a larger share. If we only calculate the number of ecosystem applications based on on-chain application attributes, the number is around 300, with the main application types being games, bots, gambling, and DeFi.

Looking at the overall application types, most applications are a fusion of Web2 and Web3, with only the corresponding functional boundaries being differentiated. It can be said that TON ecosystem applications have integrated the attributes of Telegram and Web3.

And if you’ve experienced using applications in Telegram and the built-in wallet functionality, you can clearly see that Telegram is TON’s external portal, and entering Web3 from this portal is extremely smooth.

The applications in the ecosystem all consistently use Telegram as the entry point and interaction method, and the wallet as the interaction tool.

The wallet also has both Web2 and Web3 transaction methods. You can use USDT to seamlessly exchange TON and make transfers to independent accounts and interact with other applications. It also supports various types of invocations and activations.

Ultimately, it can almost be summarized as TON having achieved complete integration within the Telegram ecosystem. Telegram exists in Web2 form but with the spirit of Web3 and TON’s decentralized core. In Telegram, which has nearly 1 billion global users, TON token will become the absolute value expression outlet. It is these applications that support TON’s value.

Once TON becomes the native token for expressing value, with applications supporting the native token and ecosystem building, DeFi applications will also carry the same value expression, such as DEXes, launchpads, lending, etc. The most obvious example is that during the period when the TON token soared, the TonUP token, which has the attribute of being the ecosystem’s golden shovel, also completed a rise of about 300% in the short term. The speed of the associated reaction is noteworthy. For ecosystem projects further from the native token business such as games and social networking, they will be targets for associated reactions in the later stages of rotation.

In addition, TON Foundation has recently been actively promoting ecosystem building in areas like memes, and has launched the Open League liquidity incentive program, selecting core ecosystem projects including STON, DeDust, TonUP and others to jointly promote it and providing 50K TON in support. Statistics show that in the past 6 months, the number of TON ecosystem projects has grown by about 10%. And after the price surge, more projects joined TON, choosing to conduct IDOs on launchpads like TonUP.

TON’s on-chain data validates the current growth trend. First, according to DeFiLlama data, after TON’s price surge, the TVL on the TON chain hit a new high, with about 13.86 million TON locked up, worth up to $56 million at its peak. Secondly, according to Token Terminal data, both TON’s weekly active users and monthly active users have reached new highs, with weekly active users exceeding 490,000 and monthly active users exceeding 730,000.

TON’s Future Value Capture

Although TON’s market cap already ranks high, compared to other ecosystems it currently has two obvious characteristics:

First, the number of ecosystem projects is insufficient and there is huge room for future expansion. Additionally, among the ecosystem projects, the number of projects designing businesses based on native tokens and mainstream tokens is small.

Second, TON currently lacks the release of enormous trading potential. Recently, the news of TON being listed on Binance has been spreading. Once the news is confirmed, TON’s trading potential will be released to an even greater extent.

We are in a bull market, and expectations for tracks and ecosystems will all translate into buying actions, i.e. voting with your feet. The expectations TON provides, from Telegram’s 1 billion users to the founding team’s performance to ecosystem expectations, have all whetted the market’s appetite.

But when we put aside the dazzling vocabulary, the core of TON’s value capture still comes from Telegram’s platform value:

  1. The valuation of 1 billion Internet users.
  2. The liquidity demand generated by using TON as an advertising fee within the platform.
  3. Telegram’s ability to conveniently and smoothly market, communicate and acquire customers.
  4. Product integration design that completely breaks down Web3 entry barriers.

Referencing any platform with such characteristics, TON can continuously provide the value it wants to capture. And businesses closely related to TON and its ecosystem, whether it’s the aforementioned golden shovel TonUP, DEX like STON and DeDust, or games like Notcoin, will all benefit endlessly.

Of course, long-term returns depend on persisting in holding and building, and the biggest breakthrough point in the short term is still being listed on Binance. Currently, Binance has listed TON perpetual contracts, and the news that TON spot trading will also be listed is still ongoing somehow. From the foundation’s recent actions, it seems to be actively preparing. Similarly, new and old investors in the market are even more eager to see it happen.

This article was updated on March 27, 2024