Key Drivers Behind Toncoin’s 200% Year-to-Date Surge
Executive Summary:
- The Open Network (TON) has shown robust growth of 200% in 2024, with a significant surge in total value locked (TVL), reflecting increased adoption, positioning it among the top 10 cryptocurrencies.
- This remarkable growth can be attributed to increased community engagement through the Open League incentive program and ad-sharing initiative. Additionally, the network has attracted new users with simple gameplay mechanics like tap-to-earn games.
- Using a combination of on-chain and technical indicators, we break down the growth of the network and project its future potential.
Factors Accelerating the Adoption of the TON Network
While the TON network is relatively new compared to mature EVM chains and other Layer 1 leaders like Solana, it has established a strong market presence and garnered a large community following, which is crucial for its development and long-term success. Several key factors have contributed to TON’s growing popularity:
TON Network Announces its Ad Sharing Program
Bullish news around the network began in February 2024 when Telegram introduced an ad platform integrated with The Open Network (TON) blockchain. This integration allowed content creators from over 100 countries to earn revenue from ads displayed in their channels. Telegram allocated 50% of the advertising revenue to channel owners, encouraging the production of high-quality content.
Creators received their payments in Toncoin (TON), the native cryptocurrency of the TON blockchain. This initiative aimed to monetize more of Telegram’s content while preserving user privacy and enhancing TON’s utility by enabling payments in its native token.
TON Networks “Open League” Incentive Program
A month later, the TON Foundation announced the $124 million Open League incentives program[2] with the aim to drive the adoption and growth of The Open Network (TON) blockchain.
Beginning on April 1, 2024, this program will distribute 30 million Toncoin tokens over a four-month season. Rewards will be allocated to performance-based competitions for TON projects ($15 million), airdrops and quests for users ($22 million), liquidity pool boosts ($40 million), and simple token mining mechanisms to introduce new users to TON-based projects.
The Open League’s goal is to create a “positive flywheel” effect by incentivizing projects to attract millions of Telegram users to the blockchain.
Rise in the Popularity of Clicker Games
Web3 clicker games or tap to earn games, are emerging as a prominent trend in the crypto sphere. The TON Network leads this domain, featuring popular titles like Notcoin, Hamster Kombat, and Catizen integrated directly into Telegram.
These games revolve around a simple premise: Earn in-game cryptocurrency by tapping your screen. Their appeal lies in combining addictive clicker mechanics with the allure of profitable crypto opportunities.
A key factor in their success is Telegram’s platform, which minimizes entry barriers for users. Unlike traditional crypto apps that demand wallet setups and complex interfaces, Telegram’s Mini Apps require no initial configuration. This accessibility taps into Telegram’s extensive user base, further fueling their popularity.
Tether Partners with Telegram to Introduce Crypto Payments on the TON Network
In April, Tether, the largest stablecoin issuer, partnered with Telegram’s Open Network (TON) to bring its USDT and XAUT stablecoins to the TON blockchain. This integration allows Telegram’s 900 million users to conduct seamless peer-to-peer payments using USDT and XAUT within the TON ecosystem.[3] The partnership aims to boost activity and liquidity on TON by facilitating access to capital for developers and users across various use cases.
The rapid influx of millions of users because of these several factors has significantly boosted activity and volume on the TON network. This surge in engagement has driven up the price of Toncoin (TON).
Onchain Analysis of The Open Network (TON) from September 2023 to July 2024
The Open Network (TON) has experienced significant growth and adoption over the past 10 months, from September 2023 to July 2024. During this period, the network has seen a surge in key metrics, including total value locked (TVL), active addresses, and transaction volume.
Exponential Growth in Total Value Locked (TVL)
The TVL on the TON network has seen exponential growth, increasing from $14 million in September 2023 to over $386 million by July 2024, a staggering 27-fold increase. This rapid expansion can be attributed to the launch of the Open League incentives program in February 2024, which has driven increased activity and adoption across the TON ecosystem.
The TVL growth has been fueled by the expansion of decentralized applications (dApps) on the TON blockchain, particularly in the areas of decentralized finance (DeFi), non-fungible tokens (NFTs), and gaming. As of July 2024, the TON ecosystem hosts over 650 dApps, showcasing the network’s ability to support a diverse range of Web3 applications.
5x Increase in Transaction Volume
The transaction volume on the TON network has also experienced a significant increase, rising from around 1 million transactions per day in September 2023 to over 5 million transactions per day by July 2024. This represents a 5-fold increase in daily transaction activity, showcasing the network’s ability to handle high-volume use cases.
The growth in transaction volume can be attributed to the network’s scalability and efficiency, which allows it to process millions of transactions per second without compromising security. This has made TON an attractive platform for various applications, including DeFi, NFTs, and micropayments within the Telegram ecosystem.
Toncoin (TON) Technical Analysis
Toncoin (TON), has also seen a remarkable price appreciation From February to July 2024. The TON token price surged from $2.2052 on February 15, 2024, to an all-time high of $8.2889 representing a 375.8% increase.
In the one-day timeframe, TON is forming a rising wedge, which is a sign of a potential bearish reversal. Although there is room for hitting a new all-time high (ATH), we can expect TON to break down from the wedge if no other external factors are involved.
Examining the oscillators in the same timeframe, the Relative Strength Index (RSI) stands at 50.5635, forecasting a neutral sign. However, the MACD level (12, 26) stands at 0.0150, signalling a bearish shade. Moving averages, both SMA and EMA on larger periods, indicate a bullish trend, while the lower periods indicate bearish signals.
8x Growth in Active Addresses
The number of active addresses on the TON network has also seen a significant increase, growing from around 150,000 in September 2023 to over 1.2 million by July 2024. This represents a nearly 8-fold increase in active user participation, demonstrating the growing adoption and engagement within the TON ecosystem.
The surge in active addresses can be attributed to several factors, including the integration of TON with the Telegram messaging app, which has over 900 million monthly active users (MAU). This integration has provided seamless access to TON’s blockchain functionalities, making it easier for Telegram users to onboard and interact with the network.
Challenges and Risks
While the TON network has experienced significant growth and success, it is important to note that the project has faced regulatory scrutiny in the past, particularly from the U.S. Securities and Exchange Commission (SEC). This regulatory risk remains a potential challenge for the network’s future development and adoption.
Additionally, as with any emerging blockchain ecosystem, the TON network faces competition from other Layer-1 and Layer-2 solutions, which may offer similar or even superior features and capabilities. Maintaining its competitive edge and continuing to attract developers and users will be crucial for TON’s long-term success.
Conclusion
Looking ahead, TON will likely reach a new all-time high if it secures further listings on tier 1 global exchanges. The primary challenge for Toncoin’s listing on major exchanges like Binance and Coinbase stems from the 2019 SEC lawsuit against Telegram, which initially sought to distribute Grams tokens. [5] This legal battle ended with a ban on the sale of Grams, impacting the global availability of the tokens due to concerns they might re-enter the U.S. market.
Despite Toncoin’s rebranding and strategic pivot, the aftermath of this lawsuit continues to deter major exchanges, especially those like Coinbase, which are highly sensitive to U.S. regulatory climates. As Toncoin navigates the complexities of cryptocurrency regulations and market competition, its path toward broader exchange listings remains uncertain.
The growth of the TON blockchain has been driven by several key initiatives, including incentive programs, the Tether partnership and revenue sharing. However, the real network effect has been ignited by the advent of clicker games, which have contributed to the worldwide mass adoption of TON and Telegram, especially in developing countries. Telegram has evolved from being just a messaging app to a full-fledged crypto super app, featuring web3 games and wallets that make it easy for anyone to enter the crypto economy.
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