The TON Legacy: How Telegram's Cryptocurrency Survived

If Telegram's TON blockchain project is dead, it will live on in the form of at least two forks controlled by two rival communities.

TON Crystal, a token based on the TON network, is currently available for purchase on various platforms. According to exchange spokesperson Alesya Sypalo, another rival cryptocurrency called TON Coin has been listed on EXMO, a crypto exchange, since last Monday and is now accessible to dealers in Russia and the Commonwealth of Independent States (CIS).

She went on to explain that the listing was paid, but she didn't specify who paid for it, just that Anatoly Makosov, one of the network's engineers, was "a point of contact" for the listing arrangement. Makosov did not reply to a query from CoinDesk about whether he organized the listing personally.

The TON brand and technology were developed by Telegram and are used by both TON Crystal and TON Coin. Despite their shared ancestors, the two groups remain apart.

The TON blockchain project has exhibited a number of vital indications in recent months.

After more than a year of radio quiet, the project's official website, ton.org, came alive on Aug. 4. The Telegram team, which was in charge of the project's repository, hadn't updated it since April 2020, just before it was canceled.

The Open Network, which was formerly known as Newton, is now one of the TON successors, according to the website. The network is run by a group of developers (led by Makosov) and validators who believe in the long-term success of the ambitious blockchain project, which began as a $1.7 billion Web 3.0 utopia but fizzled out due to a legal battle with the US Securities and Exchange Commission over the status of its native token.

CoinDesk attempted to determine who is currently sustaining the TON projects, why they are doing so, and why they are competing with one another.

Telegram bids farewell.

After two years of labor and a huge $1.7 billion token fundraising campaign, Telegram, the startup behind the popular messaging software, has canceled its ambitions to deploy a blockchain in 2020. Telegram Open Network was intended to be a money and a collection of decentralized services built on top of a native proof-of-stake blockchain.

A decentralized domain name service (DNS), a virtual private network (VPN), file sharing, and other capabilities were included in the idea, which, if completed, would build a full Web 3.0 world on the TON blockchain. All of this could be connected with Telegram, a chat service with hundreds of millions of users at the time.

Investors from the Silicon Valley elite to Russian billionaires flocked to the pre-sale of the future coins, which came as no surprise.

The initiative was supposed to go online in October 2019, however the SEC sued the business only weeks before the debut, alleging securities law violations, and the launch was stopped. Telegram dropped the lawsuit after nine months in court and agreed to pay a $18.5 million penalty to the SEC.

Telegram stated in May 2020 that it will no longer support the project, blaming it on the US regulator. Telegram, on the other hand, made TON's code open source before leaving. With one exception, the GitHub repository and the official website became completely quiet after that.

A new feature was introduced to the blockchain code in early July 2020: “testgiver” contracts, which let users to acquire pre-mined tokens via a proof-of-work method. This enabled anybody who could set up a node to “mine” tokens without having to purchase them, despite the fact that such a feature was not intended for TON, which was designed as a proof-of-stake blockchain.

That proof-of-work option gave one of the TON children a chance to exist.

The number of free TONs is increasing.

Telegram left behind a significant network of developers and small blockchain businesses that had been waiting for TON to become online and had committed time, effort, and computing power in the future blockchain. Many people were dissatisfied with the notion that it had all been for nothing.

Developers who participated in Telegram's blockchain hackathons when TON was being developed, a group of small businesses preparing to incorporate Telegram's cryptocurrency into their business models, and would-be validators were among the dissatisfied.

Even though Telegram was no longer engaged, these individuals felt that the ambitious blockchain project had a future.

In May 2020, one such community released the Free TON blockchain, which includes a native currency called TON Crystal. TON Labs, a venture-backed software business that helped Telegram operate the TON testnet early on, and several professional validator companies in Europe, such as Everstake, P2P, and Certus One, spearheaded the initiative.

Since then, three crypto exchanges, CEX, DigiFinex, and Kuna, have listed and traded the native token, TON Crystal (TON), against the USDT stablecoin. Decentralized finance (DeFi) services such as yield farming and native non-fungible token (NFT) markets have just been introduced by the community.

The currency has been incorporated into the wallet applications Changelly, Free Wallet, and Lumi, and a bridge between the Free TON and Ethereum blockchains has been created by the community. Around 440 validators are now active in the network, according to Aleksandr Tetyukhin, who is responsible for FreeTON-related problems at the Everstake staking platform.

In addition, the developers just released a new white paper, which modifies the original TON white paper authored by Nikolai Durov, brother of Telegram CEO Pavel Durov. On the Free TON-specific forum, the document is currently open for community feedback and review.

According to Alexander Filatov, co-founder and CEO of TON Labs, the new white paper "elevates Pavel Durov's idea of freedom to a new level."

A new TON has arrived.

However, not all of Telegram's early blockchain believers joined the Free TON movement — Some of the attendees left to create their own version of TON. One of them, called Newton, was operated by a separate group of engineers who originally remained anonymous.

However, in late June, one of them, developer Anatoly Makosov, sent a GitHub request to the Telegram team, requesting that the Telegram team give over control of the ton.org domain and the Github repository to the Newton community (Makosov's username is tolya-yanot, the request's author). That request was granted by the owner of the ton-blockchain repository, probably the Telegram devs.

Since then, the Telegram team's material on the ton.org website has been completely replaced with information on the Newton project. The supposed new owners have yet to update the GitHubrepository.

When Telegram ceased supporting the testnet and its own validators, Makosov told CoinDesk that the team moved the pre-mined tokens it had to the "testgiver" smart contracts and offered a method to mine them, which a significant number of miners are doing now.

“As a result, we recognized the token had worth and began debating whether we should build another testnet,” Makosov said.

He also said that he is unaware of the number of individuals and organizations engaged in the TON "mining."

According to his findings, approximately 500 addresses are actively mining at present time, all utilizing very strong gear, according to a validator who requested not to be identified. It's difficult to say how many of those addresses belong to the same individuals, but he knows of at least 20 separate miners and organizations who are now collecting tokens on over 2,000 servers. Those people and entities, on the other hand, refuse to reveal their identities.

The competition

Filatov of TON Labs claimed the firm has acquired rights to the “TON” and “The Open Network” names in 41 countries, but expressed optimism that “all of it is open source [and] it would enhance the ecosystem at large” in a remark on the competing project.

“I really hope that the 98 percent of TON coins that have already been produced have value and owners who will contribute to the network,” Filatov said.

Gregory Waisman, the chief operating officer of the wallet app Mercuryo and a backer of Newton, told CoinDesk that Newton is closer to Telegram's original idea. Telegram's transfer of ton.org ownership to Newton demonstrates that Telegram "trusts Newton with the project's future development," he added.

Because of the project's legal background and the fact that it was essentially outlawed by the SEC, Fedor Skuratov, former communications manager at TON Labs, thinks that Telegram's connection with the original TON project causes more damage than good.

“For many prospective partners, investors, banks, and regulators, the very name of TON became a negative issue. Free TON has already been impacted by this, and any other initiatives will be as well,” Skuratov said, adding that any suggestion of a Telegram link at this time sounds good only to Telegram's supporters.

As a result, the Free TON group decided to separate themselves as far as possible from Telegram, while the Newton community wants to emphasize its commitment to the original Telegram idea. Skuratov does not think Telegram is concerned about the problem.

Telegram simply wrote the project off and gave over the website and code source to "those who requested first," he claimed, adding that "both Durovs have turned the page on TON for good."

When asked if Telegram supported the Newton project, the business did not reply.

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