In this article we delve into the “Telegram Open Network,” whose main peculiarity is that it relies on the cryptographic messaging app of the same name.
The history of this network began in 2019 with an ICO, which was followed by several events that delayed its success including a court case filed by the U.S. Securities and Exchange Commission (SEC).
Today Telegram Open Network boasts the world’s fastest blockchain record, capable of handling more than 104,000 transactions per second.
Emerging within Telegram’s decentralized ecosystem is the cryptocurrency Toncoin (TON), which serves as a governance, fuel, and stake token.
Compared to a year ago, the price of TON has increased by 74%.
Let’s see all the details below.
Summary
- What is it and how does the Telegram Open Network modular blockchain work?
- The story behind the creation of Telegram Open Network and the court cases with the SEC
- Toncoin (TON): the main crypto asset in the Telegram ecosystem
What is it and how does the Telegram Open Network modular blockchain work?
Telegram Open Network is a layer-1 modular blockchain that is based on a Proof-of-Stake consensus mechanism.
Its operation is different from monolithic networks such as Ethereum, in that from a technical point of view it is composed of a masterchain and a variety of workchains and shardchains that allow blocks to be added “vertically” managing to achieve one of the best infrastructure efficiencies on the market.
The architecture with which it was built is vaguely reminiscent of Polkadot, the workchains of the Open network being similar to the parachains of Gavin Wood’s network in terms of their dependence on an underlying layer.
The feature that stands out within this blockchain, however, is not the way it is designed but the interoperability with Telegram, which guarantees a potential flow of 700 million users and allows for the facilitated exchange of cryptographic tokens.
Integration with the popular messaging app also allows among other things to install a bot directly on it to handle transactions within it, and exchange coins on DEX and in P2P mode.
This probably represents the factor that most of all led Open Network to achieve the success it enjoys today.
Another quality involves a “mutli-blockchain” mechanism that links Telegram’s chain to other decentralized networks for specific tasks.
To date, Open Network presents an ecosystem with a myriad of web3 applications in the niches of DeFi, NFT, DAO, wallet, infrastructure, etc.
The goal of the TON Foundation, which is in charge of developments on the network, is to become increasingly user friendly and achieve mass adoption.
As mentioned in the introduction, this blockchain boasts a very important record of being the most scalable layer-1 in the world with a calculated tp/s of 104,715, as well as the ability to offer very low fees with a low carbon footprint.
Telegram Open Network outperformed not only the well-known super-fast networks Solana and Polygon, but also several centralized payment providers such as Stripe, PayPal, Visa, and Mastercard.
A recent performance test led by auditing firm Certik confirmed how the network was able to accommodate 107,652,545 transactions in just 25 minutes.
The story behind the creation of Telegram Open Network and the court cases with the SEC
The story behind the birth of Telegram open Network dates back to 2019 when Telegram’s founders, brothers Pavel and Nikolai Durov, proposed the first prototype of the blockchain under the name “Gram” trying to launch the product on the market with an ICO sale.
Even before the sale was completed and the deal went through, the Securities Exchange Commission (SEC) set its eyes on the cryptographic project and opened an investigation for selling unregistered securities in the US.
The U.S. federal agency won the court battle since Gram’s investors were likely expecting a profit from their purchase.
The Durov brothers were fined $18.5 million and forced to return $1.2 billion from the ICO sale.
In this circumstance Pavel Durov expressed all his melancholy about the outcome of the matter, complaining in a blog post that the U.S. had unfairly succeeded not only in preventing Gram from being distributed in their country, but throughout the world.
This initial failure initially discouraged the messaging app community, but they were able to make up for it only a few years later.
Thanks to the efforts of the TON Foundation and the work of a wide range of developers, two projects have been developed in Telegram’s house since 2021.
The first, initially called “TON” and later renamed “Open Network,” achieved immediate success by partnering with Telegram and has been led to date by leaders Anatoliy Makosov and Kirill Emelyanenko.
The second, on the other hand, initially called “FreeTON” and later renamed “Everscale,” does not rely directly on Telegram and still has a much lower user base than the first.
Open Network pursued Gram’s initial goal of creating a network open to the whole world that could leverage the messaging app as an interface for all its features.
To get around the problems caused in the past by the SEC, Open Network’s founders decided to create this stratagem: the distribution of the crypto TON, which is the main currency of the chain, took place on average the mining mode, proper to the Proof-of-Work model.
Then, once all the TONs provided by tokenomics were mined, the chain shifted its consensus mechanism to the more functional and efficient Proof-of-Stake.
In doing so, the SEC could not detect sales of unregistered securities, the investment in TONs being the result of mining, as is the case today on Bitcoin or as was the case in the past with Ethereum and hence comparable to a “commodity.”
In detail, in June 2022 the entire supply of crypto TON was mined and Open Network switched to POW.
Toncoin (TON): the main crypto asset in the Telegram ecosystem
Toncoin (TON) represents the main cryptocurrency in the Open Network ecosystem, used as a governance, fuel, and staking token.
In practice, TON is used to vote on decentralized community decisions, to pay gas fees on the Open Network, and to participate in distributed consensus through the practice of staking, more specifically through the DPOS ( Delegated Proof of Stake) mechanism.
The official staking platform is TON Nominator, which requires a minimum of 10,001 TON to gain access.
There is actually also the possibility to “mine” TON even though the entire supply is already on the market: with the “Ton Mining Pool” platform, users can in fact mine BTC with software and convert all proceeds to TON.
Since its launch in September 2019, the Telegram Open Network crypto has had a very unstable price trend coming just after listing to exceed the $4.5 threshold and then dump to $0.8 a few months later.
Anyway, since August 2023 the coin has expressed its full potential, scoring +100% in just 50 days and reminding the world of the potential its ecosystem enjoys.
In conclusion of this article we must obligatorily point out a very worrying problem for Toncoin (TON) and its chain.
Many members of the Telegram community have pointed out that during the years when the POW mechanism was in place, the distribution of TONs through mining took place in a non-transparent manner.
Even today, there is no firm data on the actual total supply for cryptocurrency, although Coingecko and CoinMarketCap agree on the number of 5.05 billion units.
On Feb. 21, 2023, the community submitted a proposal asking the Foundation for clarity on this dilemma, highlighting among other things a number of about 200 wallets that have been inactive for several years and had mined a large amount of TONs in the early stages.
This mystery makes TON’s past decidedly opaque and raises a big red flag about the actual value of the cryptocurrency, which is expected to be lower than it is now if it turns out that there is additional supply than expected.
