Why did TONcoin go up by a third, and how is it connected with Telegram?

TONcoin (TON) has surged ahead of other tokens this week, rising nearly a third (29.4%, to be exact, according to Crypto Bubbles). On December 14, the value reached $2.83. And for the month, it was up 42.1%, though that’s still half the price of TON a year ago.

Market cap now stands at $2.92 billion, and trading volume over the past 24 hours is $93.39 million.

#Toncoin rallied +39.3% last 1w upon the revelation of the #Telegram app’s latest update which allows users to maintain anonymity by logging in using blockchain based numbers which are on auction for TON on the Fragment Platform.

Best of #crypto trades👇https://t.co/ymb0wwSnWZ pic.twitter.com/Exa9U3dtFA

— Matrixport (@realMatrixport) December 15, 2022

Although back in October, TONcoin was the leader among the losers. So what happened in December that made the token surge? And what to expect in the future? Let’s dive into the topic.

What is TONcoin (TON)?

To begin with, The Open Network’s cryptocurrency blockchain has a core coin called TONcoin or TON (formerly known as Gram). Nikolai Durov and his team created the network. He is the older brother of Pavel Durov, the creator of the popular messenger Telegram.

The project was founded in 2018, but then abandoned and moved under the TON Foundation and renamed from Telegram Open Network to The Open Network.

Since 2020, the project has evolved thanks to a group of enthusiasts called the TON Foundation. TONcoin, formerly known as Gram, is the native cryptocurrency of the TON network.

The original idea was to integrate TON into an easy-to-use application that allows users to buy/send/store funds. Customers pay transaction fees and use TON to settle or confirm transactions. TONcoin uses a Proof-of-Stake (PoS) consensus model.

The developers’ mission is to create a complete ecosystem with decentralized storage, decentralized services, a domain name system (analogous to DNS), an anonymous network, an instant payment platform, and accessible/fast transaction processing.

TON has a layered “blockchain within a blockchain” structure. Sharding involves the use of multiple subnets (shards) on a single blockchain, where each shard has a specific purpose. This allows the network to avoid the accumulation of untrusted blocks and speeds up the execution of tasks. 

The TON network offers such services: 

• TON Wallets (built-in wallet for funds transfer and interaction with platform services) custodial and noncustodial; TON Services allows developers to create various dApps and users to access third-party applications through a convenient interface; 
• TON Storage offers private encryption using the wallet owner’s private key; 
• TON Proxy uses all components of the platform and allows customers to access the TON blockchain via decentralized VPNs; 
• TON DNS (decentralized name system) makes it possible for traditional websites to operate on the TON network, allowing users to set short names.

Why did TONcoin suddenly start to skyrocket?

The reason for such a strong surge in TON quotations was most likely an innovative solution with the ability to purchase anonymous phone numbers for Telegram.

At the end of November, Durov announced the creation of a decentralized auction platform, Fragment, for bidding on anonymous phone numbers for Telegram. They are sold for TON and start with +888. Such numbers are NFTs based on a blockchain of the same name. They can be used to register a relatively anonymous Telegram account. In this case, there is no need to use a SIM card.

“Fragment has been an amazing success, with 50 million USD worth of usernames sold there in less than a month. This week, Fragment will expand beyond usernames,” he stated.

The blockchain industry was built on the promise of decentralization, but ended up being concentrated in the hands of a few who began to abuse their power.

— Pavel Durov (@durov) November 30, 2022

In addition, the founders of the project presented an interesting mechanism. The prices of all numbers that are not traded or not bought will be increased in price by 1 TON every three hours until they reach a certain limit. After that, they will be removed from the auction.

Telegram brings new $TON use cases

Recently, they sold usernames for $50M. Now you can register an account w no SIM: buy a number for TON on Fragment, starting at $17.

Atm @Durov is building a crypto wallet & DEX. With that, Pavel plans to double down on Telegram’s crypto plans pic.twitter.com/hg8ugQCOaW

— CryptoNik (@Nik95247423) December 7, 2022

For example, some numbers are so popular that they sell for more than $100,000 at a Fragment auction. The most coveted number is +888 8 888, which is currently bidding for 38,290 tons, the equivalent of about $89,000 (as of December 15).

The @telegram messenger team has launched the sale of virtual numbers with the prefix +888, placed as collectibles on the $TON blockchain.

Now, users can log in using TON blockchain-powered anonymous numbers available on https://t.co/gcCTstolWv and enjoy ultimate privacy. pic.twitter.com/5J7IqFQ4pA

— TON (@ton_blockchain) December 7, 2022

Also on December 12, the TONcoin team announced the launch of the decentralized exchange DeDust in the project ecosystem, in addition to the two already working – TonSwap and STON.fi.

Moreover, on December 14, it became known that cryptocurrency exchange Bitget will start listing TON. And from December 21 will start trading Toncoin in the pair TON/USDT.

How can I make money on this?

In addition to the typical buy low and sell high, there are other ways to make money with TON.

First, you need to get a TON wallet address in the Ton Pay service.  This is an ecosystem of tools for Ton Coin payments and stacking directly on Telegram. 

The Ton Pay service has its own TPJ token, written in Ton blockchain, which has a limited issue of just 3 million. It is fully backed by real TON on a gold standard basis. 

Now for 1 TPJ you can get 3 TON. All collected coins are sent to the TPJ liquidity address pool and can only be spent to maintain the price of the token. There will be a total of three rounds of TPJ sales of 3, 5, and 10 TONcoins respectively. 

This is a really applicable token in the ecosystem with low issuance, so it could be worth a lot in the future and collect some of TONcoin’s capitalization. 

Once the first round of TPJ sales is complete, TONcoin stacking will be launched, where you can earn coins both actively and passively by delegating them to validator nodes. 

The reward for validators in the TON blockchain is 12–15% per annum.

So far full-fledged functionality in Ton Pay has not been launched, but it is possible to stake TON in the social network Ton Рlace, which offers 12% per annum with capitalization every 72 hours (but all this at your own risk).

However, it is worth remembering once again: the cryptocurrency market is extremely unstable, and the risk of losing all investments due to the collapse of the project or devaluation of tokens is always very high.