Telegram Open Network: What Went Wrong?
In 2018, Telegram introduced the Telegram Open Network (TON), a layer-1 blockchain with its own currency called Gram. The project gained attention for raising $1.7 billion in an initial coin offering (ICO), making it the second largest ICO at the time. However, Telegram later abandoned the project due to regulatory issues.
Regulatory Trouble
TON aimed to address scalability challenges by using a proof-of-stake protocol and sharding. It planned to offer decentralized services such as storage, domain name system, privacy network, instant payments, and fast transaction processing. But the Securities and Exchange Commission (SEC) classified Gram as unregistered securities.
Despite Telegram’s efforts to fight the ruling, Pavel Durov announced in 2020 that Telegram would no longer participate in TON’s development and began refunding investors. However, community developers took over and continued building TON under the name “The Open Network.”
How does it work?
Toncoin serves as the native cryptocurrency of TON and is used for network operations, transactions, and interactions with Telegram Mini apps. It also powers various services like TON Storage, TON Proxy (a decentralized VPN service), and the TON naming system.
TON utilizes a sharded proof-of-stake consensus mechanism that enables parallel transaction processing and claims to handle millions of transactions per second. Toncoin initially relied on proof-of-work but transitioned to proof-of-stake in June 2022.
Tokenomics
Toncoin has a maximum supply of 5 billion tokens, with 3.4 billion currently in circulation. Validators receive rewards for maintaining the network, and there is an annual inflation rate of 0.6%. Toncoin holders also have voting power in the decentralized autonomous organization (DAO) that governs TON.
Roadmap
The TON network has seen a surge in developer activity, with a 102% year-on-year increase in development activity. The developer count reached 9,134 by June 2023, indicating the project’s growth. TON aims to attract projects and users through its integration with Telegram’s vast user base.
Tap Fantasy, an MMORPG blockchain game, migrated to TON from Binance Chain to leverage the platform’s integration with Telegram’s 700 million monthly active users.
Hot Take: The Rise and Fall of Telegram Open Network
The Telegram Open Network (TON) made headlines in 2018 with its ambitious plans and record-breaking ICO. However, regulatory challenges forced Telegram to abandon the project. Despite this setback, the TON community rallied together and continued developing the network under a new name, The Open Network.
TON’s native cryptocurrency, Toncoin, powers various services on the network and offers voting rights within the DAO. The project has seen significant developer activity and has attracted projects like Tap Fantasy, highlighting its potential for mainstream adoption.
While TON faced obstacles early on, its resilience and community support have kept it alive. It remains an interesting project to watch as it strives to overcome regulatory hurdles and achieve its vision of a scalable and decentralized network.
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