5 Real Reasons Why Toncoin (TON) is So Hot Right Now

Yashu Gola
Updated: Jun 21, 2024, 11:32 GMT+00:00

Key Points:

  • Toncoin's Total Value Locked (TVL) has skyrocketed by 1,372% to 87.47 million TON in 2024.
  • The success of the play-to-earn game Notcoin and its integration within the TON ecosystem significantly boosted Toncoin's demand.
  • The Open Network team's funding and incentive programs for dApp developers indicates strong market engagement and confidence.
Toncoin, FX Empire

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Toncoin (TON) has emerged as a standout performer in the cryptocurrency market for 2024. By June 21, it boasted year-to-date returns exceeding 200%, outpacing even the market heavyweights like Bitcoin (BTC) and Ethereum (ETH). This surge is particularly notable given the recent buzz around exchange-traded funds (ETFs) for Bitcoin and Ethereum. Still, it is Toncoin that has captured the spotlight with its remarkable growth.

Let’s discuss the primary factors that have made Toncoin one of the hottest assets in 2024.

Toncoin’s TVL is Booming

Notably, Toncoin is the native cryptocurrency of the Open Network, a layer-one blockchain initially developed, dumped, and later reclaimed by Telegram. TON powers dApps, staking, and paying for decentralized services, facilitates DeFi activities, enables fast transactions, and supports network scalability through sharding​ within the Open Project ecosystem.

By June 21, the total-value-locked (TVL) across the Open Network blockchain had skyrocketed to 87.47 million TON from 5.94 million TON at the start of the year—a staggering 1,372% increase.

The total-value-locked across the Open Network ecosystem. Source: Defi Llama

Toncoin Adoption is Rising, As Well

This TVL surge coincided with the growth in TON’s transfer volume and net holders count.

Throughout June, Toncoin’s transfer volume has been oscillating between $5 billion and $10 billion. To put this into context, Bitcoin’s average daily transfer volume is roughly $50 billion. This comparison reveals that Toncoin has already achieved around 10% of Bitcoin’s transfer volume capacity, a significant feat for a cryptocurrency that is only four years old.

TON transfer volume. Source: CryptoQuant

Meanwhile, the number of Toncoin holders surged to 32 million in June, up from 2.9 million just a year ago. This represents a remarkable 10-fold increase, highlighting the rapidly growing popularity and adoption of the TON token in the cryptocurrency market.

TON holder count. Source: CryptoQuant

The substantial increases in TVL, transfer volume, and holder count indicate that Toncoin’s demand is growing due to its perceived utility, primarily when it comes to participating in DeFi activities such as staking, lending, and providing liquidity, which require holding and utilizing TON tokens.

The substantial increases in TVL, transfer volume, and holder count indicate a growing demand for Toncoin, driven by its utility in DeFi activities like staking, lending, and providing liquidity, which requires holding and using TON tokens.

Notcoin’s Success Boosted TON Demand

Notcoin is a play-to-earn game embedded in Telegram, where users earn Notcoin tokens (NOT) by tapping on a virtual coin. By early 2024, the game had attracted over 35 million players, making it one of the most popular crypto games at the time​​.

The NOT token launched on major exchanges like Binance and OKX on May 16, 2024. Within 24 hours, its price surged 600%, reaching a market capitalization of $715.7 million and a trading volume exceeding $1.2 billion​. As of June 21, NOT was trading for $0.014, up by over 1,700% since its trading debut.

NOT/USD daily performance chart. Source: TradingView

Notcoin’s integration within the TON ecosystem allowed players to earn NOT tokens by depositing Toncoin, thereby creating a direct link between the two tokens and boosting the utility and demand for TON. This integration around Notcoin contributed to a rally in Toncoin’s price this year.

As of June, Telegram had launched “Telegram Stars,” a new in-app token for purchasing digital goods and services. In April, it launched Tether (USDT) on the TON blockchain as part of a strategic partnership with the stablecoin issuer.

Toncoin Funding And Incentive Programs

The Open Network team attracted further demand for TON tokens by launching back-to-back funding and incentive programs for decentralized app (dapp) developers.

For instance, in March, the team announced the allocation of 30 million TON tokens, valued at $115 million then, for community rewards. In doing so, it distributed the funds across four key areas: $38 million toward token mining and user incentives, $22 million for airdrops, $15 million to support the League developer ecosystem, and $40 million for boosting liquidity pools.

The next month, the Open Network’s official ecosystem fund, the TONcoin Fund, secured an initial commitment of up to $250 million from prominent industry players, namely Huobi Incubator, KuCoin Ventures, MEXC Pioneer Fund, and others.

The funding and incentives will likely attract more developers to build on the TON blockchain, leading to a more diverse ecosystem of decentralized applications. Meanwhile, these programs have boosted the adoption of TON tokens, making them more integral to the TON ecosystem. This can further lead to increased usage of TON-based services and applications on Telegram.

TON Open Interest is Booming

TON’s price rise this year coincides with the rise in its open interest in the futures market. As of June 21, the Toncoin OI was over $263 million, compared to $17.11 million at the year’s beginning.

TON futures open interest. Source: Coinglass

The growing open interest indicates that more futures contracts are being initiated, indicating more participants taking positions on TON, which typically signifies greater market engagement and confidence.

Interestingly, TON’s rising price and OI coincide with negative funding rates.

TON OI-Weighted funding rate. Source: Coinglass

Funding rates are periodic payments made between traders to keep the price of perpetual futures contracts aligned with the spot price. When these rates are negative, traders with short positions are paying those with long positions, indicating that a significant portion of the futures market is betting on a price decline, even as the spot price of TON rises.

The presence of negative funding rates amidst rising prices and open interest earlier in May led to a short squeeze. Short sellers were forced to buy back the asset to cover their positions amid rising TON prices, thus further driving up the price.

Further upward momentum in the TON price could lead to another short squeeze.

About the Author

Yashu Gola is a journalist focusing on cryptocurrency markets since 2014. He writes for Cointelegraph and CoinChapter and has previously served as the chief editor for NewsBTC.

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