Many other Layer 1 networks compete hard with the 'holy trinity', but this project is moving under the radar. 

Telegram's Open Network has performed admirably in the market in 2024. Its native token, TON, is up by 145% in 2024. That might not look impressive, but it pulled it off with an $18 billion market cap. 

So, why are we talking about Telegram today? 

Well, for risk-averse investors, Telegram presents a low-risk opportunity to make some gains. 

And TON's biggest advantage? An 800 million potential user base! If Telegram were a country, it would be the third-most-populous country in the world behind China and India. 

Is Telegram on its way to becoming the next $100 billion project?

Let us find out!

TDLR

• TON's token (TON) surged 145% in 2024, reaching an $18 billion market cap.
• Despite facing SEC issues in 2020, TON re-emerged in 2023 under the TON Foundation and Telegram's support.
• TON achieved over 100,000 transactions per second and consistent growth in daily transactions and active addresses.
• Recent initiatives like ad revenue settlement on TON and community rewards signal growth potential alongside projected bullish valuations.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. "One Glance" by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. These are not signals, and they are not financial advice.

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What is The Open Network (TON)?

The Open Network (TON) is a decentralised Layer-1 ecosystem maintained by a global community of independent contributors. TON operates on an open-source codebase, allowing contributions from around the world. 

TON blockchain's unique structure

The TON blockchain operates on a heterogeneous multi-chain architecture comprising the Masterchain, Workchain, Shardchains, and Shards. The Masterchain supervises protocol rules, while the Workchain handles transactions in smart contracts with distinct rules for crypto and address formats. 

Shardchains divide into 260 homogeneous chains serving specific purposes, with Shards completing them, allowing for targeted corrections. TON's flexible architecture enables efficient and scalable operation, potentially validating and processing millions of transactions per second without performance loss, ensuring continuous growth.

The core feature enabling such high TPS in TON Blockchain is its inherent support for parallel transaction computation, validation and asynchronous processing of smart contracts. 

A brief history of  Telegram and TON

Telegram introduced the Telegram Open Network in 2018, initially named Gram at the time. During the ICO boom, the team raised a whopping $1.7 billion in April 2018. However, this is when things started to go south. 

The project faced SEC allegations of illegal fundraising, and initially, Telegram fought the regulators in court. However, after six months, Telegram raised its hands and abandoned TON. The alleged offering of unregistered securities resulted in Telegram settling with the SEC to pay an $18.5 million fine and pay back investors any unspent funds.  

Despite the setback, TON remained an open-source project on GitHub, allowing community developers to continue its development. 

Fast-forward to 2023, and Telegram returned to the picture after they announced The Open Network, or TON, as its official Web3 infrastructure. Before this announcement, the TON chain was rather inactive, but since September 2023, TON's growth has been accelerated as its value proposition has improved. 

But how? 

The key takeaway from the Telegram announcement at Token 2049 was that they outrightly mentioned a 5-year Web3 initiative to onboard 800 million Telegram users on the TON network through their TON wallet. For context, Metamask wallet announced a surge of 55% in monthly active users in 2023, which took its tally to 30 million users. That is less than 5% of the expected users for TON through Telegram.

So, considering this target as "audacious or outlandish" is justified, but the signs have been positive since then.

TON's on-chain pulse 

TON held the world record for the world's fastest blockchain for a brief period.

During a livestream hosted by the TON Foundation in October 2023, the blockchain processed 104,715 transactions per section. This was a massive achievement for the protocol, and it is important to note that the test utilised only 256 validators. At present, TON has 290 active validators. 

TON currently represents a fast block time of 4 to 5 seconds, and it was processing over 100 TPS. 

The TON daily transaction numbers are extremely impressive. Since the end of 2023, they have consistently increased to an average of over a million per day.

The active addresses on the network have also been consistently above 100,000 per day since December 2023. 

Additionally, the network was represented by 39 full-time developers, with 175 monthly active developers on average, as recorded on December 31, 2023. The total number of TON repositories to date is 2,246, and total TON commits are 535,537. These are impressive statistics, considering the project has been dead for over two years since 2020. 

Tokenomics

From an investor point of view, Ton coin has decent tokenomics. 

It currently has a total supply of 5.1B, of which 68% or 3.4B is in circulation. The main crux is that its supply is not hard-capped, and there is a 0.6% in-built annual inflation rate. 

Four hundred ninety million TONcoins are staked, with a staking APY of 5.4%. 

Now, both these factors balance each other, but the fact that there are no unlocks, private or team allocations behind the curtains is a positive sign. Hence, tokenomics can be considered fairly ideal. 

Why are we bullish on TON in 2024?

The Open Network and Telegram are collectively taking action for the TON chain. While on-chain fundamentals and tokenomics play a major factor in bullish narratives, what we like about the TON chain right now is the presence of bullish catalysts. 

Firstly, Telegram founder Pavel Durov announced that Telegram channel owners will receive 50% of ad revenue starting March 2024, and all payments will be settled on the TON blockchain. 

Now, The Open Network Foundation has announced that they will allocate 30 million TON tokens, worth $156 million at the moment, for community rewards.

Both narratives highlight the collective intent of TON Foundation and Telegram to accelerate the process of user onboarding on the network, which is in line with their September 2023 claim. 

In a recent interview, Durov mentioned that Telegram continues to move towards a potential IPO and expects the social media company to turn profitable soon. This could be a massive trigger for TON's price in a bull market when valuations often smash expectations.

The on-chain numbers currently indicate that things are moving in the right direction. Whether these numbers will sustain and progressively improve will be pivotal for the protocol's market value. 

Valuation exercise

To estimate a market valuation for the TON blockchain, we had to consider multiple factors which will play a significant role in the future.

As a layer 1, TON has been all guns blazing in various fronts over the past 6-8 months. We will individually look into them for this valuation. 

TVL

 

Since Telegram's ad revenue announcement and TON's community incentive program, the total value locked or TVL on TON has quadrupled to almost $80 million. The chain is actively expanding as more protocols are slowly arriving on its blockchain. It is important to note that the TVL value is still underwhelming, but the improvement of the DeFi narrative is quantifiable and a positive sign.

TON-based apps and wallet

The key objective of TON is to boast its DeFi ecosystem, which is currently extremely large. With over 550 apps and 3 million community members, Telegram's app ecosystem expands into various sectors such as gaming, social, NFTs, staking, and DeFi. However, TON's major ace in its sleeve is its wallet. The Telegram wallet is a native custodial wallet embedded with the Telegram app, and it is one of the easiest wallets to activate. Users only need to type @wallet in the search bar and move forward with another couple of clicks. Depending on the region, users can deposit and receive crypto assets within minutes while accessing fiat currency via banks or P2P markets. 

From an adoption perspective, this is vital. With channel owners receiving a part of the ad revenue from Telegram, there is further incentive to build communities on the messaging app. 

Revenue 

Since the beginning of December, the annualised fee generated by the TON network has picked up drastically, and it is key to note that the market cap only caught up with the revenue last month. 

The current annual revenue is projected to be around $22 million, which is pretty significant but expected to be even higher. 

Price targets

Currently, TON already has a market cap of $18 billion. Its FDV stands at around $26 billion, and its token price is ranging near its all-time high. However, we must consider TON's on-chain fundamentals and discovery momentum in this bull market.

Therefore, after considering each factor, our price targets are listed below: 

• Base Target: $25, i.e. 4.8x

• Bullish Target: $40, i.e. 8x

Invalidation criteria

With the TON blockchain, the projected expectation is that even if TON can overboard 80 million users (about 10% of the total Telegram users), it can become a $100 billion project. 

However, we need to see a little bit more for TON in terms of credible adoption. For example, the DeFi TVL for Ethereum, Solana, and multiple other blockchains is above billion dollars. TON's expansion must be cohesive across each direction for the token utility to remain robust. 

Right now, on-chain activity, fee generation, and wallet integration are moving in the right direction, but progression is key for continued bullish price action. 

Technical analysis

TON exceeded its all-time high range of $2.92-$2.70 at the beginning of March. Since then, the asset has been undergoing a massive price incline, reaching a high of $5.68. 

However, over the past day, TON has declined by 6%, and the correction might last a few days. A perfect opportunity for a long-term position lies between $4.300 and $4.00, where the token may experience a bullish bounce back. The range coincides with the 0.618 Fibonacci line, which has been held in past correction periods. 

Cryptonary's take

To be clear, TON is a low-risk play.

The upside potential won't be exciting for risk-loving investors in the ecosystem. However, we believe its base target is an easy 5x to 8x, with minimal downside. TON's biggest advantage remains an ecosystem that has already been globally adopted. 

With TON incentives brought into the picture, it provides low fees and high parallel transactions, so users can easily experience various apps. 

Overall, the growth potential of the TON ecosystem is evident, and the ecosystem is accelerating in its development. The projects already deployed within the ecosystem are in their early stages, creating more investment opportunities with favourable risk-reward ratios and substantial potential. 

Therefore, retail investors still have the potential for influential gains by entering the narrative during the price-discovery stage. 

Cryptonary, Out!