About Toncoin (TON)

Toncoin (TON) is the native asset of The Open Network, a scalable layer-1 blockchain focused on providing users with secure, fast, inexpensive peer-to-peer payments. Within the network ecosystem, TON is used to pay transaction fees, confer governance rights, and secure the network by way of validator staking.

TON makes use of a key scalability concept – sharding – to effectively process large numbers of transactions in unison. Sharded blockchains leverage a series of subnetworks (shards) that work to process transactions in parallel while still maintaining connectivity to the main (or beacon) chain.

In terms of utility, TON resembles several other layer-1 protocols, including Ethereum and Solana. Seeking to become a “network of networks,” TON is equipped with its own native smart contracts and dApps, including the NFT-focused StickerFace and TON Diamonds, as well as a decentralized storage service, TON Storage.

According to CoinMarketCap, all smart contracts deployed on The Open Network are executed via the proprietary TON Virtual Machine (TVM).

Apart from this suite of dApps, The Open Network is equipped with various functionalities including TON DNS, a domain name service that allows users to identify themselves via human-readable wallet addresses (rather than random strings of numbers/letters).

TON Proxy enables network participants to access the TON blockchain using a series of decentralized VPNs, helping to ensure high degrees of user privacy.

TON is backed by a PoS consensus mechanism which leverages a series of token-holding validators to ensure network safety and efficiency. For those that may lack the monetary resources and technical expertise necessary to become a validator, the network’s nominator pools allow these users to delegate their token stake to an active operator.  

Originally launched by messaging app Telegram, The Open Network still maintains several integrations with its parent platform including the ability to purchase anonymous mobile numbers from Telegram using TON.

Per CoinDesk, these services are facilitated through Fragment, an exchange platform used to buy and sell Telegram-based user-names and numbers.

In terms of future developments, community members are anticipating the development of dedicated Bitcoin and Ethereum Virtual Machine (EVM) “workchains” sometime in 2023.

Who created TON and how much was it worth?

TON was initially founded in 2018 by the encrypted messaging app Telegram under the name “Telegram Open Network.” Early network developments were spearheaded by the app’s co-founders Pavel and Nikolai Durov, as well as various Telegram employees.

TON's history has been rocky. Shortly after launch, the protocol’s first native asset, Gram, drew the ire of the SEC. The agency argued that the token was security given its links to the messaging platform. As such, the SEC later went on to bring a case against Telegram stating that its Gram offering amounted to an unregistered securities sale.

Ultimately, the lawsuit marked the end of Telegram’s involvement in the protocol.

In May of 2020, control of the network was transferred to a group of community enthusiasts collectively known as the TON Foundation who subsequently released their own native token, TON.

According to the project’s whitepaper, TON tokens are currently disseminated via a series of Proof-of-Work (PoW) enabled “Giver Contracts.” Neither ICO nor airdrop was utilized during TON’s initial distribution.

Data from Coingecko shows that TON consolidated in the months following its public release before making a near parabolic move up to an all-time high of $5.29 in November of 2021. Then TON’s price dipped, briefly, before rallying once again, in late December of 2021, this time to a local high of $4.42.

Unlike the broader crypto market, TON generally fared well in 2022 gaining upwards of 150% over the last six months of the year.

How is the price of TON determined?

TON’s price is (in part) determined by the token’s inflationary nature. While TON’s initial supply was earmarked at 5 billion, the token has a natural inflation rate that’s set to increase its total stock by 0.6% per year. Per the Toncoin whitepaper, newly created tokens will be distributed to the network’s coalition of nominators and validators. As of late December 2022, TON’s circulating supply was sitting at 1.47 billion.

Why does TON have value?

The Open Network’s value is derived from its ability to facilitate fast and secure peer to peer payments. The protocol’s suite of utility enhancing decentralized applications would also seem to confer value as well.

Is TON secure?

As the native token of The Open Network, TON is backed by a series of digital wallets as well as various exchange-based storage solutions. In terms of platform security, The Open Network is supported by a PoS consensus mechanism.

What are the main benefits of TON?

• The Open Network leverages a sharded architecture to achieve high levels of speed and scale.
• TON can be used to purchase anonymous mobile numbers within the Telegram messaging app.
• TON Storage allows users to preserve their files within a decentralized environment.

What do critics say about TON?

It’s volatile. When the TON/USDT pair recently became accessible on a popular futures platform, TON jumped by 30% over the course of a few weeks, getting near $3 as of mid-December 2022; but then, as of late December, the price action quickly lost momentum and TON fell 12% in one week.