The Open Network: A Comprehensive Overview

Introduction

The Open Network (TON), originally known as the Telegram Open Network, is a decentralized blockchain platform developed by Nikolai Durov, co-founder of the messaging app Telegram. Initially intended to launch its own cryptocurrency, Gram, the project faced regulatory hurdles in 2020, leading to its rebranding and evolution into an independent platform. Today, Toncoin serves as the primary cryptocurrency within the TON ecosystem, facilitating transactions and various applications.

Historical Background

Origins and Development

In 2017–2018, the Telegram team sought blockchain solutions to accommodate their vast user base. Recognizing that existing Layer 1 blockchains could not support their needs, they initiated the design of their own blockchain, initially named the Telegram Open Network. To fund this ambitious project, Telegram launched a token sale for Gram in early 2018, opting to avoid traditional venture capital routes.

As the project developed, funds raised were earmarked for server costs, bandwidth, and operational expenses. However, regulatory scrutiny, particularly from the U.S. Securities and Exchange Commission (SEC), ultimately led to Telegram's withdrawal from the TON project in May 2020.

Transition to Open Development

Following Telegram's exit, a small group of open-source developers resumed work on the TON codebase under the name NewTON. The original principles of the project remained intact as they continued developing the network. In September 2019, TON's code was released as open source, allowing broader community involvement.

Technical Features

Blockchain Design

The TON blockchain is designed as a scalable, multi-blockchain platform that supports decentralized applications (dApps) and smart contracts. Utilizing a proof-of-stake consensus mechanism, it can theoretically support up to 2^92 blockchains.

TON employs sharding to enhance scalability, enabling blockchains to automatically split and merge based on network demands. This design maintains consistent block generation speeds regardless of transaction volume, minimizing congestion and keeping operational costs low.

Hypercube Routing

TON's innovative hypercube routing mechanism facilitates efficient data transfer between blockchains, allowing the network to scale to millions of chains without sacrificing performance. This ensures rapid communication and robust functionality across the ecosystem.

Governance and Security

Governance within TON is decentralized, requiring majority approval from validators for network modifications. Security is bolstered through partnerships with various Security Assurance Providers (SAPs), which conduct testing and quality assurance to enhance the network's integrity.

Applications within TON

Toncoin

Toncoin, the primary cryptocurrency of the TON blockchain, is used for transaction fees, staking, governance, and gas payments for smart contract operations. Its integration within Telegram enables various functionalities, such as rewarding creators and purchasing services.

TON Proxy

The TON Proxy serves as a network anonymizer, facilitating decentralized VPN services and enhancing online privacy. This layer helps protect users against censorship while supporting the development of dApps.

TON DNS

Launched in June 2022, TON DNS simplifies access to decentralized applications by offering human-readable ".ton" domain names. This service allows users to interact with the network more easily, associating short names with complex addresses.

TON Storage

Introduced in December 2022, TON Storage is a decentralized file storage solution that uses a P2P network and smart contracts for reliability. This system aims to replace centralized web servers, enabling users to store and exchange large data volumes securely.

TON Payments

TON Payments, launched in June 2022, facilitates instant off-chain value transfers, ensuring security comparable to on-chain transactions. This feature supports seamless interactions between users, bots, and services.

Everscale and Community Development

In May 2020, as uncertainties surrounded Telegram's involvement, other projects began developing the TON technology. "Free TON," launched on May 7, 2020, utilized the open-source code under the GNU General Public License, fostering community participation and leading to the rebranding of the project as Everscale in 2021.

Regulatory Challenges

On October 11, 2019, just before the anticipated launch of TON, the SEC secured a temporary order to halt the distribution of Grams, arguing that the sale constituted an unregistered securities offering. Following a lengthy legal battle, Telegram announced its withdrawal from the project in May 2020.

Subsequently, the company settled with the SEC, agreeing to return $1.22 billion to investors and pay an $18.5 million penalty. Telegram’s liabilities eventually included a debt of $625.7 million, leading to the issuance of $1 billion in bonds to cover these obligations.

Conclusion

The Open Network has emerged as a significant player in the blockchain space, adapting from its origins within Telegram to an independent and decentralized platform. With a focus on scalability, governance, and security, TON continues to attract developers and users alike, fostering a vibrant ecosystem supported by innovative applications and community engagement. As the project evolves, it remains a testament to the potential of decentralized networks in the digital age.