Will TON Rival Ethereum and BSC? Expert insight by Andrew Wind, CPO at SwapSpace

The blockchain ecosystem has seen significant developments over the past decade. It went from being dominated by Ethereum to a diverse and dynamic space with several prominent leaders (such as the Binance Smart Chain), as well as other notable contenders like Solana trying to take a slice of their pie. The Telegram Open Network (TON) blockchain, originally conceptualised by the team behind the popular messaging app Telegram, has recently undergone a remarkable evolution and now stands poised to potentially rival the leading blockchains. The recent launch of USDT on the TON blockchain made our team once again re-evaluate the potential of TON + Telegram to turn into one of the robust web3 ecosystems on the market, and we’re eager to share our ideas about the factors that will drive growth of TON in 2024.

Integration with Telegram’s Ecosystem

• Telegram, led by Pavel Durov, is adopting blockchain via The Open Network (TON) to tokenize features and share revenue.
• Telegram plans to distribute 50% of ad revenue to creators on its platform, enhancing its revenue-sharing model.
• Telegram expands tokenization to stickers and other features, aiming to bypass app store restrictions and enhance flexibility.

Leveraging Telegram’s User Base

Telegram counts over 900 million active users as of early 2024, providing TON with a massive, built-in user base. This integration is a unique advantage that no other blockchain platform currently has. By seamlessly incorporating blockchain functionalities into the Telegram app, TON can drive mainstream adoption at an unprecedented scale. According to Pavel Durov, CEO of Telegram, this is exactly what they’re going to do.

"We believe in NFTs that are deeply integrated into human culture, into human interaction, into our communication," Durov said, emphasizing the potential of socially relevant NFTs. "NFTs that you can see tens of billions of times and they have a lot of potential to spread virally. These are the right NFTs. That’s why the next step that we are going to undertake is tokenizing Telegram stickers."

Use Cases and Applications

The potential applications within Telegram are vast. For instance, users could utilise TON for micropayments, subscription services, and decentralised applications (dApps) directly within the messaging app. This integration simplifies the user experience, removing barriers typically associated with cryptocurrency usage, such as the need for separate wallets and exchanges.

Recently there’s been a significant step in this direction by Telegram, with the introduction of Stars, a new in-app token for purchasing digital goods and services. Developers can swap their Stars for Toncoin (TON), the native cryptocurrency powering Telegram’s “The Open Network” via Fragment, a platform mostly used to buy and sell Telegram usernames.

“With Telegram Stars, mini apps can now accept payments for digital services using the simplest payment method possible – in-app purchases on Android and iOS,” said Pavel Durov in a June 6 Telegram post.

The Launch of USDt-TON Stablecoin

Stablecoins have become a critical component of the cryptocurrency ecosystem, providing a stable medium of exchange and a store of value amidst the volatility of other cryptocurrencies. They facilitate trading, lending, and borrowing, and are crucial for the DeFi sector. The market capitalization of USDT alone has surpassed $112 billion, highlighting the importance of stablecoins.

USDt-TON’s Role

The recent launch of the USDt-TON stablecoin is a strategic move that enhances TON's utility and appeal. The availability of a stablecoin on TON allows for more complex financial instruments and services to be built, including DeFi applications, which are vital for the ecosystem’s growth. Users can transact with a stable value asset within the Telegram ecosystem, promoting greater adoption and usage of TON for everyday transactions and e-commerce.

This development aligns TON with other leading blockchains that have integrated stablecoins, such as Ethereum with USDT and USDC, making it a competitive player in the crypto space. Such services as SwapSpace and its partners provide seamless cross-chain swaps to or from TON to USDT owners, who can easily use their stablecoins, earning them on one chain, switching to another and buying something there with it.

Strong Community and Developer Support

A thriving developer community is crucial for the growth and innovation of any blockchain platform. TON has been actively fostering a vibrant developer ecosystem, offering comprehensive documentation, development tools, and incentives for developers to build on its platform.

Comparisons with Ethereum and BSC

Ethereum, known for its robust developer community, has been the go-to platform for smart contracts and dApps. BSC, with its compatibility with Ethereum's ecosystem (thanks to the Ethereum Virtual Machine or EVM), has also seen a surge in developer activity. Ethereum has over 200,000 active developers, a testament to its strong community. TON is strategically positioning itself by providing similar, if not better, development environments and support.

Hackathons and Grants

TON has been hosting hackathons and offering grants to developers, encouraging them to explore and innovate within its ecosystem. This proactive approach not only accelerates the development of new applications but also strengthens the overall community by attracting talented individuals and teams to contribute to TON's growth.

Enhanced Security and Decentralization

Security is paramount in the blockchain space, and TON has placed significant emphasis on creating a secure environment. The use of the BFT consensus algorithm ensures that the network remains secure and resilient against attacks. Furthermore, the multi-chain architecture adds an extra layer of security by isolating potential issues within specific shards or work chains, preventing them from affecting the entire network.

Decentralisation efforts have also been of paramount importance to the success that TON has been enjoying recently.

“The solution is clear: blockchain-based projects should go back to their roots – decentralisation,” - said Durov when commenting on the FTX bankruptcy case. “Cryptocurrency users should switch to trustless transactions and self-hosted wallets that don't rely on any single third party.”

If TON can successfully address these challenges, it has the potential to rival and perhaps even surpass the likes of Ethereum, Solana and Binance Smart Chain, driving significant innovation and adoption in the blockchain space in 2024 and beyond.

Risks and Challenges

Regulatory Concerns

One of the primary risks facing TON, as with many other blockchain projects, is regulatory scrutiny. The regulatory landscape for cryptocurrencies and blockchain technologies is continually evolving, and TON must navigate this complex environment carefully.

Any adverse regulatory actions could impact TON's adoption and growth. It’s not unprecedented for such projects to face pushback from the regulators: Facebook's cryptocurrency project, Libra, faced significant concerns over financial stability, privacy, and control, leading to the withdrawal of several key partners. As a result, Libra rebranded to Diem in an attempt to distance itself from Facebook and address regulatory issues, but eventually the project was shelved entirely in early 2022.

Competition from Established Blockchains

While TON has many strengths, it faces fierce competition from established blockchains like Ethereum, Solana, and BSC. These platforms have already garnered significant market share and developer loyalty. Ethereum, for example, has a market capitalization exceeding $400 billion.

While blockchains are not isolated in 2024, thanks to services such as ChangeNOW and SwapSpace (SwapSpace facilitates cross-chain transactions via 17+ bridges), TON will need to continually innovate and differentiate itself to attract users and developers away from these established ecosystems.

Adoption and Ecosystem Development

Achieving widespread adoption and developing a rich ecosystem of applications and services is a significant challenge. While TON has the advantage of Telegram's user base, it may encounter difficulties converting these users into active participants in the TON ecosystem. Compelling use cases, seamless user experiences, and ongoing community engagement will be required to accelerate this process, otherwise Telegram risks falling behind other solutions and remaining just a web3-powered messenger, rather than a fully-fledged ecosystem.

Conclusion

The Telegram Open Network blockchain is well-positioned to become a major player in the blockchain space, thanks to its robust scalability, integration with Telegram's extensive user base, the strategic launch of the USDt-TON stablecoin, strong community and developer support, and enhanced security and decentralisation features. SwapSpace has observed a 4,4x increase in users exchanging TON and a 6x growth of TON coin volumes, which attests to the fact that it’s developing in the right direction at a fast pace.

However, it must navigate regulatory challenges, fierce competition, adoption hurdles, and potential technological issues to realise its full potential.

If TON can successfully address these challenges, it has the potential to rival and perhaps even surpass the likes of Ethereum, Solana and Binance Smart Chain, driving significant innovation and adoption in the blockchain space in 2024 and beyond.