The TON project was originally launched in 2018 under the Gram name and managed to raise in excess of $1.7 billion in investments. However, the SEC (Securities and Exchange Commission) later interfered and labeled the Gram tokens as securities, forcing the project to reformat and take on a new form. By May of 2020, Gram lost to the SEC in court and had to abandon further pursuit of fundraising. The result was the development of the TON project with a large community following in the blockchain and crypto space.
By that point, Telegram had left the TON project and developers picked up from then on, since the source code of the blockchain was open. The alternative to the Gram token was then deployed under the name of Toncoin. The given cryptocurrency was developed as an alternative to the majority of coins and tokens on the market that users had difficulty in using due to the many challenges of their integration with such gateways as MasterCard and Visa. Toncoin was initially designed to be an everyday cryptocurrency for payments for goods and services.
The Toncoin – Purpose
The purpose of Toncoin was to overcome the challenges faced by other cryptocurrencies, namely – the high transaction fees that have to be paid for the use of Ethereum and Bitcoin. The average user is the key audience of Toncoin, which is being positioned as an everyday means of payment using digital currencies.
The flexible architecture of the TON blockchain allows such use of the Toncoin, since the network’s structure is open and quite flexible, allowing developers to tailor their applications for specific needs on its basis. The ability of the TON blockchain to process millions of transactions per second adds considerable value to it, making it ideal for scaling and use of applications in the GameFi and DeFi domains.
The Toncoin – Mode of Operation
The Toncoin can be used on the TON blockchain as its native asset and makes use of multiple shards to achieve high transaction throughput and speeds. As a Proof-of-Stake blockchain, TON is designed to be run by validators who will be rewarded for their efforts. Tokens can also be lent to the validators in exchange for rewards, further expanding the capabilities of the Toncoin as a means of passive income generation. All operations between the lenders and the validators are managed via smart contracts – a fact that adds an additional security layer to the blockchain and makes it tamper-proof.
Tonoin Use Cases
The Toncoin can be sold and purchased by users who set up their wallets on the TON blockchain. There is no transaction fee involved in token transfers on the network, since each Ton smart contract has its own token balance that is used for gas fees. There is, however, a 0.9% commission fee for Toncoin sales.
Another use case for Toncoin is within DAOs, or decentralized autonomous organizations, where the native token can be used as a means of casting votes. The votes can be on any matter, including changes to the blockchain ecosystem or other cases of governance of the network. Such an approach of DAO governance gives users a sense of community empowerment and allows individuals to influence the traction of the project.
Features of Toncoin
Among the features that make the Toncoin stand out among its competitors is the fact that it is focused on efficiency. The coin operates on the basis of the Proof-of-Stake consensus algorithm, making the network more energy-efficient and the reward distribution scheme more focused on the users. However, in June of 2022, the last Toncoin was mined and no additional mining will be taking place. Instead, total supply will increase annually by a small percentage, thus making the Proof-of-Stake algorithm necessary only for maintaining the functioning of the blockchain itself.
Storage of information in the TON blockchain takes place via the TON Storage feature, which entails private encryption, taking blockchain security a step further. This feature adds an additional security layer to the concept of private and public storage of Toncoin on the network.
Toncoin can be accessed via the TON proxy – a feature that acts much like a VPN. The latter is fully decentralized, making any transactions with the asset free of censorship and readily available for access via Dapps.
The smart contracts that run the Toncoin are not immutable, like in other blockchains. The smart contracts are executed by individual virtual machines, which makes it possible to execute very complex transactions, further expanding use cases for the Toncoin.
Another important feature of Toncoin is the TON DNS, which allows users to register their own domain names and even usernames on the TON blockchain. This feature grants users the ability to name their wallets, thus making it much easier for other users to identify them and adds a special level of individuality to an otherwise bland wallet address.
As for wallets, the Toncoin can be stored on the TON blockchain. At present, there are in excess of 750,000 unique wallets on the TON blockchain, performing countless operations on a daily basis. Custodial wallet services are common on the TON blockchain alongside non-custodial wallet services.
The Toncoin also allows users to earn passive income by means of becoming a validator on the network. The Proof-of-Stake algorithm allows users to either attract or lend their stakes to become part of network operation. Some nominator pools are also active, allowing users to lend their liquidity in exchange for rewards.
Additional use cases for the Toncoin include:
- Decentralized data storage payments;
- TON proxy service payments;
- TON DNS service payments;
- Internal Dapps service payments;
- Governance voting payments.
Toncoin Price Traction and Adoption
The Toncoin has been experiencing considerable price traction in the last weeks of August and the first weeks of September of 2023, largely pushed by rising demand in the African markets. At the time of writing, Toncoin was traded at around $1.82 per coin and had a market capitalization of $6.22 billion, experiencing an uptick of 3.34%.
Despite the surge, Toncoin has been at a low of 21.19% over the last six months and had a total daily trading volume of just over $19 million. The traction being observed in the last few weeks is largely attributed to rising developer activity in the network, correlating with the launch of several new Dapps on the TON blockchain. Positive news from the Telegram messenger also added to the mix with the announcement that TON users would be allowed to link their accounts with their wallets, thus making Toncoin even more accessible within the popular messenger.
Though largely optimistic, the overall pessimistic outlook on the crypto market is hampering the potential of Toncoin’s development in the medium term. At present, the Toncoin is most popular in Africa, where it is considered an accessible means of payments for everyday use, especially in Nigeria. Recent statistics indicate that Toncoin use is on the rise in the country with an average of 2.16% monthly.
The Toncoin is being positioned as an accessible digital asset with multiple features for the average user of cryptocurrencies. The many use cases of Toncoin and its technical underpinning allow it to be used in a wide variety of roles. However, the slow traction of the TON blockchain and the overall stagnation on the cryptocurrency market are hampering such efforts, leaving the true potential of Toncoin for the future.