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TON: What you need to know before launching a project on this blockchain

TON

Since TON stormed into the TOP 10 largest cryptocurrencies, more and more projects are considering this blockchain for their Web3 applications. In our guide, we delve into the remarkable story of The Open Network, its advantages and pitfalls, integration with Telegram, and recommendations for applying for a grant.

From a banned ICO to the top 20 on CoinMarketCap: the turbulent history of TON

Under the wing of Telegram

When in January 2018 the media reported on the upcoming Telegram ICO, it seemed to everyone that mass adoption was finally imminent. By the end of March, the closed presale of the yet-to-be-released token called Gram had raised $1.7 billion. In September 2019, the first testnet was launched, and the mainnet launch was scheduled for October 31, 2019. A few days before that, 39 investors were supposed to finally receive their "grams."

But it wasn't to be: on October 11, just 3 weeks before the launch, the U.S. Securities and Exchange Commission (SEC) obtained a court order to block the token issuance. According to the Commission, the presale constituted an unregistered sale of securities to American investors.

Telegram's management postponed the launch to April 30, 2020, but the regulator's pressure proved too strong. In May 2020, the company agreed to pay an $18.5 million fine to the SEC and refund investors within 4 years.

Fortunately, by that time, Telegram had already launched the second testnet (testnet2) and released the entire source code of TON to the public. This allowed an independent team of developers to continue working on the project, renaming it from Telegram Open Network to The Open Network.

TON mining and the unexpected mainnet

Although the Gram token never saw the light of day, 5 billion Toncoin (TON) tokens were released on testnet2. Upon leaving the project, developers from Telegram placed them in 20 special smart contracts, and for two years (from June 2020 to June 2022), anyone could "mine" TON on the testnet.

Then the most interesting thing happened. In May 2021, the community voted to upgrade the status of testnet2 to mainnet, as by that time, the network had long been operating stably and had many validators.

Thus, TON transformed from a testnet token into the official token of the blockchain. At that time, TON already had thousands of holder-miners; they must have been pleased to learn that their coins suddenly gained real value. So don't throw away the passwords to your wallets on testnets: who knows?

The fastest blockchain in the world

Under new leadership and with active community participation, TON achieved impressive success:

  • 617,000 active wallets by the end of 2023;
  • Over 150 active projects in the ecosystem;
  • TON listed on OKX, ByBit, Huobi, KuCoin, and others;
  • TON reached a market capitalization of $7 billion and ranked 15th on CoinMarketCap;
  • Officially the fastest blockchain in terms of TPS: 104,715 transactions per second (Certik-certified result);
  • Established a $250 million ecosystem development fund;
  • 12,500 developers in the community;
  • Transaction volume growth by 110% compared to 2022;
  • Launched a non-custodial wallet integration TON Space, through which you can send crypto via Telegram and even buy TON with a bank card.

Among the notable projects participating in the ecosystem are:

  • Liquid Staking: Tonstakers, bemo;
  • DEX: DeDust, Ston.fi, Megaton Finance;
  • DeFi: StormTrade (leveraged trading), DAOLama (lending);
  • NFT: GetGems marketplace;
  • Launchpad: Ton.Starter;
  • Games: G-BOTS, Notcoin (no token yet, and generally Web3 mechanics).

Top 10 NFT Collections on GetGems in the Last 30 Days: Web3 Domains and Abstract Design Lead

In the ambitious TON roadmap, there are payment channels without fees (TON Payments), a system for decentralized storage of files of any size (TON Torrents), bridges for BTC and BNB Chain, and much more. So, the future of TON looks very promising.

Reasons to join the TON ecosystem

When starting the development of any Web3 project, the question of choosing a blockchain arises. And although Polygon, Arbitrum, and Solana are more well-known, there are plenty of arguments in favor of TON as well. 

It's hard to pinpoint one main reason why we chose TON. Strong community, grand goals, the opportunity to create an application for Telegram, and simply the fact that it's our favorite messenger - all of this influenced our decision. And of course, the opportunity to apply for a grant from the TON Foundation is a nice motivation.

Alex Ermilov
CEO of the financial-gaming project at TON Finlosophy

The chance to "Get into Telegram"

Pavel Durov personally supported TON on his channel back in 2021, but the official partnership between TON and Telegram was only concluded in September 2023. This is a historic moment: Telegram has over 800 million monthly users, and most of them (except users in the US and some other countries) already have access to the non-custodial TON Space wallet.

Moreover, in the Telegram mini-app catalog, there are over 40 Web3 applications using TON. For example, you can interact with the decentralized exchange STON.fi directly in Telegram through a bot and make swaps.

For the first time, a global messenger has implemented blockchain functionality on such a scale. And this is just the beginning: TON plans to create the first Web3 super app. Telegram is the perfect fit for this, as it hosts over 37,000 communities dedicated to crypto.

Quality startups on TON can expect integration into Telegram Mini-Apps, and eventually into the TON super app. This means access to hundreds of millions of potential users - more than in any other blockchain ecosystem.

Grant system

TON Foundation pursues an active grant policy through Toncoin.Fund with a capital of $250 million and TON Accelerator. Grants totaling over $1.2 million have already been awarded to more than 100 projects and 450 individual developers.

Startups on TON planning integration with the Telegram Web Apps platform can expect amounts up to $10,000 in TON if they don't have a product yet, and up to $50,000 if they already have a product and users on another blockchain and are ready to migrate to TON.

Individual developers can apply for the bounty program and complete specific tasks for rewards up to $5,000 - for example, writing a contract.

Access to venture investors

TON Foundation doesn't engage in venture investments but can help establish contacts with funds and provide valuable recommendations. There's also the investment fund TONcoin.Fund, but so far, it has only made two public investments in its portfolio: Megaton Finance (raised $1.5 million in seed round) and the sports-gaming platform Fanzee, and the game Fanton - $300,000 in preseed round.

Potential token pump on TON

When the prices of SOL, AVAX, and FTM grew by 100-200% in 2021-2022, the prices of many tokens in their ecosystems increased much more. The Open Network is ahead in this regard, as TON itself is not yet traded on Binance. If a new bull market indeed emerges in 2024-2025, the TON ecosystem may attract significant attention.

Over the course of 2021, the Total Value Locked (TVL) in the Avalanche ecosystem soared from $170 million to $11.4 billion. Something similar could happen with TON.

What to expect when creating a startup for TON

There are no perfect blockchain ecosystems: where gas fees are high, competition is fierce, liquidity is low... In the case of TON, projects need to be prepared to overcome several obstacles.

A completely different technology compared to Ethereum

TON is not compatible with the Ethereum Virtual Machine (EVM) and uses specially created smart contract programming languages: FunC and Tact, which are more complex than Solidity. Therefore, existing dApps for other blockchains cannot be ported to TON as easily as they can be to Ethereum or Avalanche: they will need to be completely rewritten.

Another important difference: TON supports sharding (dividing the blockchain into parts), and dynamically at that. The number of shards can increase or decrease depending on the network load, although there are currently only two: BaseChain and MasterChain.

Moreover, individual smart contracts can even be sharded: pieces of the contract can "live" on different shards of the network, yet it will continue to function normally.

Speaking of contracts: did you know that each NFT on TON has its own smart contract? This means that a collection has as many contracts as it has NFTs, plus one additional common contract. Yes, indeed: when creating a collection of 10,000 monkeys, prepare to deploy 10,001 smart contracts!

Difficulties in finding developers

Since smart contracts for TON are written in FunC and Tact languages, Solidity developers won't be of much help here. Finding specialists will likely involve word of mouth, inquiries in various Telegram groups, or even headhunting from other projects.

While Solidity developers offer their services on freelance websites like Fiverr, there are hardly any engineers for FunC there. There are also few agencies specializing in smart contract development for TON. These include our company MetaLamp, as well as NaumovLab and Block3.

Low liquidity

According to DeFillama, TON ranks a modest 65th among blockchains by TVL with a figure of $19.4 million as of mid-February 2024. The largest decentralized exchange on TON, DeDust, boasts only three pools with liquidity of over $500,000, with the maximum daily trading volume in a pool being less than $200,000.

Projects just starting development on TON need to understand that low liquidity and small trading volumes can lead to extreme token volatility and become a limiting factor in brand development.

Potential listing difficulties

As we've noted, there's a chance that The Open Network will become a hit of the new bull season: in this case, exchanges will eagerly list tokens of projects on TON. However, for now, among the leading projects in the ecosystem, only DeFinder Capital (DFC) and JetTon are traded on a well-known centralized exchange - and even then on MEXC, which lists almost everyone.

How to get a grant from TON Foundation

Let's assume that none of the aforementioned pitfalls scare you and you've firmly decided to develop a project on TON (or add TON to the list of networks your dapp supports). How do you attract the attention of the TON Foundation and get a grant? We explain step by step.

Which projects can receive a grant

  1. Social mini-apps for Telegram using TON in the following categories: community management, SocialFi, optimization of daily tasks, etc. For example, it could be a loyalty program or an app where users earn tokens for posting quality content.

Note: You'll need to create a specific app or bot for Telegram, not just a website or mobile app. The mini-app should integrate a wallet, TON Connect (a tool for Web3 connection to apps and bots through the TON wallet), or a crypto payment solution like Wallet Pay.

Demo bot with wallet integration feature

1. GameFi - both games in the form of mini-apps for Telegram and games for PC or mobile platforms. In a mini-app game, social mechanics must bepresent (group challenges, leaderboards, the ability to invite friends, notifications, etc.); they are also desirable for other types of games.

2. Projects in other categories that can bring significant benefits to the TON ecosystem. This could be infrastructure, DeFi, solutions for interaction between mini-apps and dapps, etc. The main criteria are value, originality (i.e., something not yet implemented by others), and technical feasibility.

In-demand projects

Among the startups that received TON grants in 2023:

  • NFT game in the style of "Tamagotchi" with a mini-application for VK ($23k);
  • DEX aggregator ($20k);
  • Market for predictions (bets) on cryptocurrency and sports match prices ($15k);
  • Smart contract monitoring platform ($15k);
  • Ticket issuance protocol ($15k);
  • AI chatbot for developers ($7k);
  • Launchpad ($5k).

How much money can be received

1. Social & GameFi - Product doesn't exist yet or there's a prototype/product but without blockchain integration.

Maximum grant size - up to $10,000 in TON tokens.

2. Social & GameFi - There's a Web3 product with an active community, but on another blockchain.

Up to $50,000 in TON depending on the number of users, TVL, and other metrics. The grant is provided for migration to TON or creating a mini-app for Telegram with TON integration.

To be eligible for the maximum grant size, you need to have at least 5,000 daily users and 20,000 monthly users. Good retention rates are also required - for example, the number of active users over 7 days should be at least 10% of the number of downloads during that period.

3. Valuable projects in other categories (non-Social and non-GameFi) - regardless of stage.

Up to $50,000 in TON depending on their significance for the ecosystem.

Important restrictions

  • Grants are NOT given to projects that have already conducted successful token sales.
  • At the time of application, the project must have a website, GitHub page, X/Twitter, and a Telegram channel or group. A pitch deck is desirable but not mandatory.
  • Funds are allocated in stages as tasks (milestones) are completed. Advance funds are not provided.
  • Grants are not allocated for projects related to gambling.
  • If task completion extends beyond a month after the deadline or tasks are performed unsatisfactorily, the grant may be canceled.
  • Grants cannot be spent on marketing.

How to apply

1. Prepare information for the application

- Problem and solution description;

- Traction (preferably): technical work done, testing, active users, partnerships, etc.;

- Team experience: practical achievements (with figures), traction from previous projects, technology and programming language proficiency;

- User acquisition plan and clear market entry strategy;

- Functionality and technology description;

- Target audience description;

- How TON will be used and which parts of the application will be on-chain;

- Comparison with competitors and unique value proposition - it's advisable to align with the official TON Ecosystem Map;

- Budget with all expenses and justifications;

- Justification of how the project will be funded after the grant money runs out;

- Implementation roadmap - milestones and deadlines. Be realistic in this regard: you'll have to adhere to the planned deadlines.

2. Fill out the application form. The form is quite extensive, so be prepared to spend at least a couple of hours.

3. Feedback

If your project catches the interest of the TON Foundation, they will reach out to you. If you're asked to reapply with more information, you'll need to do so within a week, otherwise, you'll receive a rejection.

4. Fund Allocation

After reaching the first milestone, you'll receive the initial tranche of TON to the wallet address provided in the application.

In conclusion: Prospects of the TON Ecosystem

Integration with Telegram is TON's main advantage. No other blockchain can boast decentralized exchanges and games working directly within one of the largest Web2 applications.

However, for this advantage to be fully realized, the TON ecosystem needs to become more global. Currently, it's dominated by Russian-speaking teams and communities, and many applications are not localized.

The lack of EVM support and the need to create contracts in new languages also limits TON's potential audience. And while the Solana example shows that this isn't critical, TON still lacks the basic "buzz" that could compensate for the technical difficulties of entering the ecosystem. 

If TON sees more Web3 applications geared towards international communities and offering something new and unusual, it will be one of the popular blockchain in the world. Perhaps it's your project that will play a decisive role in popularizing the TON ecosystem?

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