- TON Blockchain’s native token, Toncoin, has surged to become one of the top 10 cryptocurrencies in 2024
- Despite rapid growth, TON faces major challenges due to its reliance on Telegram and its founder’s recent legal troubles
- Bitget’s research highlights weak DeFi infrastructure and regulatory risks as major threats to TON’s long-term success
The TON blockchain has had a year of great success. It owes much to the extraordinary success of clicker games like Hamster Kombat and a strong bullish market.
Its native token, Toncoin, has more than doubled in value since January and is now one of the 10 largest cryptocurrencies by market capitalization, far surpassing the returns of Bitcoin and Ether.
Is the TON Blockchain in Danger?
TON is closely tied to the fate of Telegram, still. Last week, the cryptocurrency exchange Bitget confirmed that it participated in a $30 million strategic investment in TON. This means it will play a key role in the governance of the network.
So far, so good. But, surprisingly, Bitget also released the results of a thorough research identifying the critical issues of TON. The picture that emerges is not comforting, and clouds loom on the horizon.
While noting that it is one of the fastest-growing networks of 2024, the authors of the research stated that TON suffers from weak DeFi infrastructure and a low number of developers.
Telegram and TON
The real problem is tied to the close links between TON and the Telegram messaging app, now under the spotlight after the sensational arrest of its founder Pavel Durov. His arrest led Durov to give up on one of the platform’s fundamental points: the absolute guarantee of user anonymity.
According to Bitget, these legal issues could endanger TON in the long term. “Major challenges” could arise in its work to expand and achieve global adoption. The report states:
“TON’s development is tied to the traffic generated by Telegram, and the deep connection between TON and Telegram’s wallet and user base creates significant dependency on the messaging platform. Consequently, the regulatory risks associated with Telegram hang over the TON blockchain like a ‘Sword of Damocles.‘”
Indeed, the blockchain is already facing significant legal challenges. Just this week, the UK announced the suspension of the Wallet app pending the Financial Conduct Authority’s decision on the matter. This is the solution that allows users to send and receive cryptocurrencies like Toncoin directly on Telegram.
After Durov’s arrest, TON’s value plummeted sharply. According to Bitget, TON should completely distance itself from Telegram and sever its ties with the messaging app once and for all.
Conclusion
In conclusion, despite the initial success and rapid growth of the TON blockchain, its dependency on Telegram and the legal challenges surrounding the platform could represent serious obstacles for the future. To ensure sustainable and global expansion, TON will need to consider a strategic distancing from its connection with Telegram and strengthen its DeFi infrastructure.
