The Open Network: A Deep Dive into the TON Blockchain
In 2017, the Durov brothers embarked on developing the Telegram Open Network (TON), an L1 blockchain aimed at integrating with Telegram. Since then, for various reasons, the messaging platform has distanced itself from TON, and the project has been rebranded to The Open Network.
The Open Network is a Layer 1 blockchain focused on scalability, providing an efficient, secure, and cost-effective infrastructure for web3 applications.
TON stands as one of the few blockchains that have successfully implemented sharding technology. Besides TON, sharding is also utilized in projects like Zilliqa and Near, and it is planned for future implementation in Ethereum.
The primary goal of TON is to enable the creation of a wide range of decentralized applications (dApps), including marketplaces, file storage solutions, decentralized VPN services, and more.
The TON whitepaper, published in 2018, outlined the following key aspects:
The initial sale raised $1.7 billion, making the TON token sale the second-largest ICO by funds raised, surpassed only by EOS, which raised $4.1 billion.
Telegram attempted to contest the decision, but in 2020, the project announced it would cease its involvement in TON's development. The SEC mandated that the Durovs return $1.2 billion raised during the ICO and pay an $18.5 million fine.
With the TON source code publicly available, the community took over the project’s development after Telegram's exit. Following the roadmap, they continued the work started by the Durovs. The current network was developed by Anatoliy Makosov and Kirill Emelianenko.
To avoid further legal issues with the SEC, the blockchain was rebranded as The Open Network, GRAM was replaced with Toncoin, and tokens were distributed through mining instead of an ICO. The final Toncoin was mined on June 28, 2022, after which the blockchain transitioned to a Proof-of-Stake consensus algorithm.
Workchains. These are blockchains designated to handle specific types of transactions. For example, a GameFi project requiring high transaction speeds could operate on its own workchain, avoiding resource competition with other projects.
Each workchain can have its own set of rules, consensus mechanisms, and tokenomics. However, all workchains synchronize with the masterchain to ensure network integrity.
Shardchains. These are subnetworks within workchains. Each shardchain can be identified by a shard prefix, which denotes the addresses belonging to that shardchain.
For instance, a shard prefix of 01 indicates that the shardchain processes transactions for all accounts with addresses starting with 01.
The core idea of sharding is simple: when something becomes too large, it needs to be divided into smaller parts. Sharding applies this principle by segmenting the blockchain into autonomous, interconnected sections called "shards."
Benefits of Sharding:
When designing sharding, it’s crucial to determine the number of shards to divide the blockchain into. However, predicting this number is challenging due to the unknown future load on the network.
Features of TON’s Sharding:
Together with the features of the architecture, sharding is a key aspect of TON's operation.
The infinite sharding paradigm makes TON one of the fastest blockchains. In February 2023, the TON Foundation conducted a stress test of the TON blockchain, revealing that the network could handle 104,715 transactions per second (TPS). In comparison, Visa, the largest payment system, has a TPS rate of 65,000.
TON Storage is a decentralized data storage solution similar to Filecoin. It utilizes torrent technology for peer-to-peer file sharing. Users can upload data to the blockchain and identify it using unique codes. Anyone with the file identifier can retrieve the stored information.
TON Domain Name Service (DNS) allows users to create unique, readable names for addresses on the TON blockchain, such as example.ton. This makes addresses easier to remember and share, similar to the Ethereum Name Service (ENS).
TON Proxy is a technology that enables users to connect to the TON network while maintaining their privacy. Users can either use available proxies or set up their own.
TON Sites is a service for launching websites on the TON network. According to TON’s documentation, the blockchain provides automatic security and privacy through built-in encryption and authentication tools.
Ton Bridge is a service for converting cryptocurrencies between TON and other blockchains. As of April 2024, Ton Bridge supports transfers to and from Ethereum and Binance Smart Chain.
However, the synergy between TON and Telegram is not only an advantage but also a breeding ground for conspiracy theories. Rumors suggest that the Durov brothers, rather than the community, are behind the revival of TON.
According to these rumors, the distribution of Toncoin might be fictitious, with a small group of enthusiasts led by Pavel Durov and his close associates possibly controlling hundreds of wallets. If this is true, the price of TON could be susceptible to manipulation and sudden drops.
TON stands as one of the few blockchains that have successfully implemented sharding technology. Besides TON, sharding is also utilized in projects like Zilliqa and Near, and it is planned for future implementation in Ethereum.
The primary goal of TON is to enable the creation of a wide range of decentralized applications (dApps), including marketplaces, file storage solutions, decentralized VPN services, and more.
History of TON's creation
After emigrating from Russia, Pavel Durov focused on ensuring internet freedom through the continued development of Telegram. Naturally, integrating a financial exchange tool like the Telegram Open Network (TON) became a logical enhancement for the messaging platform.
The TON whitepaper, published in 2018, outlined the following key aspects:
- The operating principles of the TON blockchain;
- Internal functions and ecosystem products;
- The application of the GRAM token, which users purchased during the ICO.
The initial sale raised $1.7 billion, making the TON token sale the second-largest ICO by funds raised, surpassed only by EOS, which raised $4.1 billion.
Top 5 ICOs by Funds Raised. Source: protos.com
The team, led by the Durov brothers, brought the project to its final stages. However, on December 11, 2019, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against TON, claiming that the sale of GRAM tokens constituted an illegal securities offering.
Telegram attempted to contest the decision, but in 2020, the project announced it would cease its involvement in TON's development. The SEC mandated that the Durovs return $1.2 billion raised during the ICO and pay an $18.5 million fine.
With the TON source code publicly available, the community took over the project’s development after Telegram's exit. Following the roadmap, they continued the work started by the Durovs. The current network was developed by Anatoliy Makosov and Kirill Emelianenko.
To avoid further legal issues with the SEC, the blockchain was rebranded as The Open Network, GRAM was replaced with Toncoin, and tokens were distributed through mining instead of an ICO. The final Toncoin was mined on June 28, 2022, after which the blockchain transitioned to a Proof-of-Stake consensus algorithm.
As of April 2024, TON is supported by the non-profit organization TON Foundation.
The Architecture of The Open Network
TON is not just a single blockchain; it’s a network of interconnected blockchains. It features a masterchain, up to 2^32 workchains, and 2^60 shardchains. This architecture distributes the load, enabling the network to handle more transactions with lower fees.
The Architecture of TON. Source: blog.ton.org
Masterchain. This central blockchain contains vital protocol information, such as the list of active validators, and details about the workchains and their associated shardchains.
Workchains. These are blockchains designated to handle specific types of transactions. For example, a GameFi project requiring high transaction speeds could operate on its own workchain, avoiding resource competition with other projects.
Each workchain can have its own set of rules, consensus mechanisms, and tokenomics. However, all workchains synchronize with the masterchain to ensure network integrity.
Shardchains. These are subnetworks within workchains. Each shardchain can be identified by a shard prefix, which denotes the addresses belonging to that shardchain.
For instance, a shard prefix of 01 indicates that the shardchain processes transactions for all accounts with addresses starting with 01.
Sharding
Sharding is one of the scalability solutions for blockchains. As of April 2024, TON is considered the only blockchain where sharding has been effectively implemented.
The core idea of sharding is simple: when something becomes too large, it needs to be divided into smaller parts. Sharding applies this principle by segmenting the blockchain into autonomous, interconnected sections called "shards."
Benefits of Sharding:
- Transaction Speed. Distributing transaction processing across shards reduces the load on each individual node, increasing overall speed.
- Scalability. Sharding allows for a higher volume of operations to be processed simultaneously, making the blockchain more accessible to a large number of users.
- Lower Fees. More efficient transaction processing leads to reduced transaction fees.
- Security. The distributed architecture of sharding enhances the network’s resilience against failures and attacks.
When designing sharding, it’s crucial to determine the number of shards to divide the blockchain into. However, predicting this number is challenging due to the unknown future load on the network.
TON introduces the infinite sharding paradigm, a feature that sets it apart from other blockchains with sharding. For example, Ethereum plans to divide its network into 64 segments, while TON dynamically adjusts the number of shards based on network load.
Features of TON’s Sharding:
- Splitting. As transaction volumes increase, the TON blockchain splits into two shards. If one shard becomes overloaded, it further splits in half.
- Merging. When transaction volumes decrease, shards merge.
Together with the features of the architecture, sharding is a key aspect of TON's operation.
Principle of TON’s Sharding. Source: medium.com
Imagine TON as a city, with sharding being the process of dividing the city into districts. Here’s how it works:
- Masterchain: Acts as the city administration, coordinating the activities of all districts to ensure order and consistency.
- Workchains: Function like city departments, each responsible for a specific area, such as education or healthcare.
- Shardchains: Represent the districts. They manage specific areas while adhering to the rules set by the city administration.
The infinite sharding paradigm makes TON one of the fastest blockchains. In February 2023, the TON Foundation conducted a stress test of the TON blockchain, revealing that the network could handle 104,715 transactions per second (TPS). In comparison, Visa, the largest payment system, has a TPS rate of 65,000.
Internal Solutions of TON
The Open Network is designed to address a wide range of user needs, from messaging and cryptocurrency transfers to data storage and proxy services. In addition to DeFi services and dApps, TON offers several other solutions.
TON Storage is a decentralized data storage solution similar to Filecoin. It utilizes torrent technology for peer-to-peer file sharing. Users can upload data to the blockchain and identify it using unique codes. Anyone with the file identifier can retrieve the stored information.
TON Domain Name Service (DNS) allows users to create unique, readable names for addresses on the TON blockchain, such as example.ton. This makes addresses easier to remember and share, similar to the Ethereum Name Service (ENS).
TON Proxy is a technology that enables users to connect to the TON network while maintaining their privacy. Users can either use available proxies or set up their own.
TON Sites is a service for launching websites on the TON network. According to TON’s documentation, the blockchain provides automatic security and privacy through built-in encryption and authentication tools.
Ton Bridge is a service for converting cryptocurrencies between TON and other blockchains. As of April 2024, Ton Bridge supports transfers to and from Ethereum and Binance Smart Chain.
Conclusion
TON has the potential to provide a user-friendly infrastructure for the widespread adoption of cryptocurrencies. In conjunction with Telegram, users can access a variety of services in one place: money transfers, gaming, marketplaces, data storage services, and more.
However, the synergy between TON and Telegram is not only an advantage but also a breeding ground for conspiracy theories. Rumors suggest that the Durov brothers, rather than the community, are behind the revival of TON.
According to these rumors, the distribution of Toncoin might be fictitious, with a small group of enthusiasts led by Pavel Durov and his close associates possibly controlling hundreds of wallets. If this is true, the price of TON could be susceptible to manipulation and sudden drops.
