In-Depth Analysis of the TON Inscription Ecosystem

1. Inscription Revolution From BTC to Multi-Chain

1.1 Analysis of the Driving Forces behind BTC Inscription Explosion

1) Capital Foundation: Benefiting from macro-capital liquidity improvement, spot ETF approval, and the expected 2024 BTC halving, the market identified BTC’s inscription ecosystem as a catalyst, attracting funds and initiating a bullish market cycle. Narrative-driven projects and value-driven projects took the lead in the market.

2) Consensus Foundation: BTC’s consensus is the most powerful in the crypto field, more influenced by the cryptocurrency’s historical narrative than the technology itself. Developing products based on the existing strong consensus is much simpler than creating new narratives or consensus in product development.

3) Growth Expectations: Financial markets look at expectations, and low valuation and an imperfect ecosystem imply significant growth potential. If comparing BTC’s ecosystem with Ethereum’s ecosystem worth hundreds of billions of dollars, the growth expectations for BTC’s ecosystem are still considerable. BTC is following the development path of Ethereum’s ecosystem, and speculative activities are driving its growth, bringing both funds and attention to the Bitcoin ecosystem. This trend has also attracted a large number of builders, laying the initial foundation for the development of the BTC track.

4) Diverse Competition: Although Bitcoin’s inscription protocol is primarily based on Ordinals, there are numerous competitors, including Atomical, Rune, SRC20, BRC420, Taproot Asset, etc., each with its own advantages, application scenarios, and followers.

5) Dominance of Leaders: Funds and liquidity are mainly concentrated in the leading inscription protocols of Ordinals, while other protocols usually have only the first few projects with some market value and liquidity. This situation shows a significant gap compared to the variety seen in previous bull markets.

1.2 Reasons why the popularity of multi-chain inscriptions continues

1）Spillover Effect: The transaction cost on the BTC chain, that is, the existence of miner fees, has become an entry barrier for many players. The prosperity of the BTC chain inscription ecology has brought about network congestion, which has increased the user’s mint inscription cost, which makes players seek other chains. Come and participate in the inscription project, thus bringing about the prosperity of other on-chain inscription projects.

2）Low development and deployment costs: The development costs and technical requirements for the Inscription Protocol are not high compared to infrastructure or even most Defi projects, which to a certain extent lowers the threshold for project parties to participate. If OP stack achieves one-click chain publishing, Inscription also achieves one-click deployment in many cases using protocol standards. Therefore, for the Inscription Project, the most important thing is the utility empowerment and development planning of the Inscription Project itself, and therefore it is more necessary to emphasize operations and the market.

3）Lottery properties of inscriptions: Users playing the Inscription protocol are similar to buying lottery tickets. A large number of targets are emerging in the Inscription protocol every day, so liquidity is scarce for the Inscription protocol. People rarely use large funds to play the Inscription protocol, and their mentality is more like buying lottery tickets with a small amount of money. , which makes the player’s behavior consistent. After diving into a lot of inscription communities, I found that the consensus among most players is - “Mint 30U for self-defense, 50U for a safety net.” This mentality represents that individual players actually do not want to miss any potential opportunity to make a fortune.

4）Fair Lanuch New Narrative: Every asset has a meme attribute. If a meme is the sum of a project’s mechanism, narrative, market value, background, and development history, then the most popular method in the secondary market is Fair Launch. From POW to ICO to Fair Launch, retail investors’ pursuit of a minting rights distribution system with equal opportunities to participate has never changed. Compared with Public Sales, Inscription has achieved this to the extreme. Users only need to pay a small amount of network gas to mint coins.

2. Overview of TON Inscription Ecosystem

As a significant blockchain in the crypto space, TON has also followed the trend of the inscription boom. From December to January, TON has witnessed the successive emergence of several inscription projects, including inscription protocols and inscription infrastructure. Some of these projects have achieved remarkable results, all contributing to the development of TON’s inscription ecosystem. They are actively expanding the ecosystem in areas such as mini-program frontends, asset trading, DeFi, protocol integration, and small-scale gaming applications.

2.1 Tone

Tonano is the first inscription protocol deployed on the TON blockchain, and TON20 is the first inscription. The initial minting process of the first TON20 inscription nano (early December 2023) had a significant impact on the TON ecosystem. The extensive user participation and triggered network transactions served as a de facto stress test of the infrastructure for the TON network.

Tonano launched its TON20 inscription protocol on December 5, 2023. Despite the absence of prior marketing activities, the minting activity of $nano (the first symbol) brought substantial traffic and transaction load to the TON blockchain, resulting in brief delays and network congestion in transaction processing. As a response, Tonano temporarily halted the minting activity. After the network recovery, Tonano resumed the inscription minting on December 11, 2023, completing the minting activity for $nano within a day. $nano generated over 20 million interactions and 37,000 unique minting addresses for the TON ecosystem.

Following the successful minting of $nano, other TON20 symbols were actively deployed. Bolt20 completed minting on December 16, attracting over 31,000 minters. Dedust.io similarly attracted more than 20,000 minters.

Tonano’s emergence signifies a dual reestablishment of user mentality and the inscription brand within the TON community. In the BTC inscription ecosystem, the sequence has a strong impact on the value of assets and protocols. For example, ordi’s significant influence as the first brc20 token has been instrumental in community consensus, aiding the project in becoming a “first mover.”

In addition to the mentioned TON20 inscription protocols (deployment, minting, querying, transferring), Tonano is also updating its product ecosystem. It has introduced the TON20 Inscription Index Query, TON20 Inscription Marketplace, and a cross-protocol asset bridge for TON inscription assets. Tonano’s Marketplace has generated over a million dollars in trading volume, providing necessary liquidity for TON20. The cross-protocol asset bridge enables asset swapping between TON20 and other inscription protocols and Jetton tokens, making a broader inscription ecosystem possible.

Tonano plans to launch mini-apps in 2024 Q1 to further address usability issues, consolidate its ecological position, and promote greater ease of use and adoption of inscriptions. In the future, Tonano will continue to focus on technological innovation, contribute to TON ecosystem development, leverage the high concurrency and low-cost features of the TON blockchain, and combine resources with the Telegram platform’s 800 million users to promote the widespread application of the TON network.

2.2 Gram20

Gram20 protocol is the second inscription protocol on TON. Different from TON20, this protocol has greater ease of use and more functions. Gram20 is the first inscription protocol that uses the Telegram applet front-end to perform the deployment, casting, and transfer of inscriptions, and has launched a trading market to provide users with trading services. The Gram20 protocol supports limiting the time interval for users to mint inscriptions, imposing penalties for early minting, and setting the starting time. This is an improvement over the basic inscription protocol.

The Gram20 team conducted good publicity before the minting, opened the minting on December 22, 2023, and held conversations with OKX Ventures and TON DevRel managers with the help of the Odaily platform. For the sustainable development of the protocol, Gram20 imposed a certain fee on the casting of inscriptions on its own platform, which reduced the enthusiasm of community members to participate. After seven days, the inscriptions were finally cast on December 29. The charging design of Inscription product design has brought backlash, not because the mechanism is bad, but because it is inconsistent with the mainstream narrative of freemint emphasized in the current inscription market.

Although the minting of Gram charges a protocol fee for minting, the platform promises that these funds will be used to meet future economic incentives and maintain the sustainability of the GRAM project, including 50% of the funds used to repurchase GRAM tokens and the other 50%. Used for infrastructure construction, ecological incubation investment, liquidity management, team building and market promotion. Subsequently, Gram20 opened the OTC market with the help of the Umbrella platform, and through publicity with multiple institutions and KOLs, it attracted the attention of users and conducted Gram inscription transactions on Umbrella.

Gram20’s market-making team is highly professional, backed by a variety of resources, including joint meetings and promotional campaigns with exchanges, venture capitalists (VC), and Key Opinion Leaders (KOL) in the market and promotion. As a newcomer, Gram20 has gained decent market attention. In terms of business cooperation, they have facilitated exchange listings and collaborated with Umbrella to pioneer OTC markets, establishing protocol asset reserves and leaving room for future operations.

As a product strategy, Gram20 leverages the TG mini-program as a focal point. This approach has somewhat differentiated them from direct competition with TON-20 in the early stages. It’s also a user-friendly product that aligns with Telegram’s mini-program planning. Implementing restrictions on mint command intervals with associated penalties is an effective method to increase platform user engagement, preventing scientist groups from raiding and running off. Additionally, Gram20 utilizes a charging model enabled by TON smart contracts, achieving an innovative form of Proof-of-Stake (POS) chain Initial Coin Offering (ICO), known as Inscriptions Coin Offering. However, unlike traditional ICOs, the token exchange ratio received by end-users can be determined by the project team.

In terms of ecosystem development, Gram20 has launched a $200,000 Ecosystem Grant Program to support Gram20 through wallet integration, browsers, and indexers, fostering the foundation of a more robust ecosystem. They are developing a bridge for inscriptions and utilizing the inscription ecosystem to build DeFi. Furthermore, they are constructing mini-games for Telegram Mini Apps, leveraging gaming to bring rich utility to Gram20.

2.3 TONOT

TONOT combines the concept of inscription with the social attributes of Telegram to create fair inscriptions for every community user. By binding and activating Telegram accounts, TONOT ensures the authenticity of Cast Inscription users. Each activated Telegram account bound address can mint 500 TONOT inscriptions, and each new invitation can mint an additional 50 inscriptions, with a maximum limit of 2,000.

TONOT was released on January 5, 2024, and the Inscription Protocol was launched. The extremely popular user participation was unexpected by the project team, causing problems with its front-end page. After being repaired, TONOT was re-released on January 11th, with full minting completed in nearly 24 hours. $TOT itself also brought a lot of interaction to the TON ecosystem. The 61,751 independent minting addresses broke the previous record held by nano. This is a rare participation in any blockchain project.

This is achieved through its unique invitation mechanism and casting mechanism. TONOT’s invitation mechanism requires users to be associated with Telegram accounts. TONOT’s casting mechanism can only be achieved through the Telegram applet and limits the total number of users casting within a certain period of time. It is also difficult for scientists to cheat by using scripts. TONOT effectively protects the interests of community users and provides a truly fair and transparent currency recording experience - the real FairMint. TONOT does not charge protocol fees and allows all users to inscribe TOT inscriptions for free, which greatly increases users’ enthusiasm for participation.

So what practical applications can TONOT achieve? According to the official product plan, TONOT will achieve:

1. Staking and Mining: Users can stake TONOT inscriptions and mine tokens from other projects within the TON ecosystem (similar to Binance Launchpool), providing additional profit opportunities and reaping dividends from the continued growth of the TON ecosystem.

2. Decentralized Identity (DID): Users can use TONOT inscriptions to generate exclusive decentralized identity attributes (DID). DID can be used for identity verification, digital signatures, encrypted emoticons, and more, making TONOT the social currency of Telegram.

3. In-game Token Consumption: As the Telegram app evolves, TON games will become a core business for TON. TONOT plans to collaborate with over 50 games in 2024, enriching the application scenarios of TONOT. In future GameFi collaborations, TONOT will serve as the consumption token, allowing users to make virtual item purchases and device upgrades within the GameFi ecosystem of the TON ecosystem, encouraging users to earn rewards while playing for free.

TONOT is currently the first social inscription on the TON blockchain, with over 60,000 holders. The integration of TONOT with Telegram ensures the fairness of inscriptions, and by binding with Telegram accounts, TONOT also ensures user authenticity. The product roadmap for TONOT aims to expand the application scenarios of inscriptions through inscription staking, in-game currency, and premium Telegram groups, contributing to the network ecosystem of TON.

2.4 FairTON

FairTON is a fairness-first, community-native and full-lifecycle project launch platform. FairTON’s positioning is not limited to the BRC20 inscription protocol. It focuses on the “localized” innovation of the TON blockchain, abandons the Achilles heel of off-chain indexers, and implements the primitive operation of inscriptions at the smart contract level.

Fairness first

The frenzy around BTC inscriptions has extended the wave of fair launches throughout the entire cryptocurrency ecosystem. Most inscription projects have copied Bitcoin’s off-chain indexing scheme. The technical approach of inscriptions is a compromise under the limitations of Bitcoin script capabilities, rather than its essence. Fair token minting accessible to everyone is in line with the original spirit of Bitcoin. On the other hand, off-chain indexing not only brings liquidity fragmentation to the public chain ecosystem but also poses risks to asset security, as witnessed by several security incidents during the development of Bitcoin inscriptions.

Native to the Community

The community is the key to the early start of the Web3 project and the basis for sustainable development. As the world’s most popular social software platform, Telegram has 800 million monthly active users, far exceeding existing participants in the cryptocurrency industry. With Telegram’s native TON support and extensive social network, FairTON aims to simplify the entry of more individuals and projects into the Web3 field.

Full lifecycle

FairTON is committed not only to an innovative project launch approach but also provides a range of token management solutions, including highly customizable vesting tools, anti-rug mechanisms to safeguard participant funds, and liquidity tools for projects.

JettonX

FairTON introduced JettonX (Jetton eXtension) for the first time in the TON ecosystem. It is fully compatible with the existing Jetton token specifications. Jetton (Russian for Token) is an ERC-20 token model on TON that supports the creation of homogeneous tokens like USDT, making it the most widely adopted token standard in the current TON ecosystem. FairTON’s customization allows for fair token minting, lottery minting, proof-of-work minting, social referral airdrops, and retroactive airdrops as project launch methods. Tokens minted through FairTON for projects can seamlessly integrate with the liquidity and on-chain infrastructure of the entire TON ecosystem.

2.5 TownSquare

TownSquare is committed to promoting mass adoption of the TON blockchain, effectively connecting Telegram’s extensive user base of 800 million with the privacy, transparency, openness and sovereignty inherent in the web3 world. The project focuses on developing the necessary infrastructure and critical applications within the TON ecosystem. TownSquare plans to launch the first decentralized, open-source inscription indexer. In addition, the team is actively committed to the exploration and development of protocols and application tools to achieve fair and safe asset insurance.

The data of the token inscription is on Layer 1, but the computation process and data results occur on the index, which is essentially an off-chain server and is no different from a web2 website server. The holdings and transaction records of the token inscription are all stored on a web server. If there are issues with the index service, assets relying on this index service may encounter problems, potentially leading to the collapse of the entire protocol ecosystem. There have been instances where a protocol’s index had a bug, resulting in arbitrary issuance, data misalignment between two index providers, and a halt to the entire protocol, causing significant losses to the community. Therefore, for the TON public chain, decentralization of the token inscription index is a necessary implementation.

Decentralized indexing is similar to nodes on a public chain, with unified code, ensuring consistency in data obtained by anyone downloading and running it. There is no risk of collusion among multiple index providers. This approach ensures high data security. Upgrading to a decentralized index can be achieved swiftly by simply updating the unified code, significantly enhancing the flexibility of the protocol.

Open source infrastructure

Looking at the development of the BTC ecosystem as a reference, the infrastructure of token inscriptions includes an indexer, wallet support, marketplace, minting tools, and data analysis. After nearly a year of development, the BTC ecosystem has flourished, while the TON ecosystem is still in its early stages. Fortunately, Tonano, Gram20, and TONOT, all launched purely by the community, have received positive feedback and popularity.

For the token inscription ecosystem to achieve long-term development, infrastructure construction is indispensable. Different token inscription standards lead to fragmentation and isolation of indexes. Inherent to the token inscription narrative is the idea of fair participation. TownSquare is about to launch a completely open-source third-party indexing service, reducing the entry barriers for potential token inscription projects. TON ecosystem developers no longer need to develop their own indexing system; they only need to run the open-source decentralized indexing program, making it convenient to use. The decentralized indexes planned by Unisat and IERC-20 also have incentive mechanisms, encouraging more people to build indexes and further enhancing decentralization.

Automation services

Making inscriptions itself is a kind of PoW (Proof of Work). In the release of Tonano and Gram, I have observed the asymmetric advantages of many scientists and programmers over ordinary retail investors. TownSquare will also launch a product that can be automated. The bot that creates inscriptions makes the casting of inscriptions fairer.

I look forward to TownSquare being able to bring protocol standards to TON’s inscription ecosystem, standardize the inscription protocol on TON and provide users with a fairer way to participate in the ecosystem.

3. Summary

There are some common shortcomings in the current inscription projects of various chains:

1. Completely Free Mint leads to the lack of sustainability for most projects. A few well-funded token inscription projects may repurchase chips from the secondary market, bear the cost of market-making, and list on exchanges, which is already a significant investment. Most startup projects, lacking token incentives and sustainable fundraising capabilities, find themselves in a difficult situation after the initial token inscription frenzy. Therefore, as token inscription projects, it is essential to balance the relationship between fair launches and the sustainable development of the project.

2. Copycat token inscription protocols lack technological and gameplay innovation. Most imitation projects simply replicate the data format and gameplay of BRC20, without considering the differences between the Bitcoin network and other general smart contract networks. In a sea of similar token inscription protocols, standing out requires innovation in technology, token economic models, and narrative aspects.

3. The token inscription market is severely fragmented. The implementation of most token inscription protocols involves off-chain indexing solutions, leading to a disconnect between on-chain and off-chain states. Overreliance on centralized services restricts the circulation and exchange of token inscription assets. The lack of programmability in smart contracts makes it challenging for token inscription protocols to leverage the composability and interoperability of blockchain.

1. Leveraging the Telegram social infrastructure, innovative social token inscription gameplay

Telegram’s mini-programs can quickly respond to a large number of access requests and provide seamless on-chain transactions using the built-in official wallet @wallet or the TON Network wallet TONSpace. Telegram accounts inherently possess features that prevent Sybil attacks, offering an effective way to prevent scientist groups from “running away,” “creating multiple accounts,” and monopolizing network resources. Making good use of Telegram’s mini-programs not only provides a better product experience for Web3 users but also facilitates the conversion of Web2 users, making it a better way to achieve mass adoption.

Protocols such as Gram-20, TONOT, FairTON, and others combine the advantages of Telegram and the TON Network to create innovative token inscription protocols through mini-program products, achieving success to a certain extent. For example, NEAR’s official endorsement and support by the founder, Illia, led to the NEAT token inscription project, with a final minting volume of 24,600 addresses. On the other hand, TONOT, a purely community-driven token inscription project without official endorsement, still achieved a minting volume of 61,751 addresses. In the era where users and traffic are paramount, TON users on the Telegram platform have high authenticity and low acquisition costs, making them a unique presence in today’s blockchain landscape.

2. Token inscription protocols introduce smart contract functionality, bringing programmability to token inscription

During a technical sharing session on the TON Network, I emphasized the flexibility of TON smart contracts. Through smart contracts, protocols, such as Gram-20, can directly add protocol fees to the contract to achieve sustainable development. Simultaneously, protocols can help users pay Gas Fees, truly achieving Free Mint. FairTON introduced the JettonX token framework, fully compatible with the ERC20 standard Jetton on the TON blockchain, providing a customizable solution for various innovative project launch mechanisms. With the use of TON Network smart contracts, a variety of flexible payment methods and launch mechanisms are entirely achievable, offering imaginative possibilities.

3. The TON blockchain token inscription ecosystem is flourishing

Similar to the token inscription protocols on the BTC blockchain, TON has seen the emergence of several protocols, including Tonano, Gram-20, TONOT, and FairTON, focusing on on-chain token inscription, TG mini-programs, social attributes, and on-chain smart token inscription. On the BTC blockchain, token inscription-based projects in trading, lending, stablecoins, etc., have gradually risen. Currently, TON’s token inscription ecosystem is taking shape, with various projects exploring the utility of token inscription. The ecosystem is contributing more utility to their token inscription products.

The above is my public analysis report on the TON blockchain token inscription ecosystem, and I would like to clarify that the entire content does not represent investment advice on behalf of the TON Foundation.

If you are interested in TON blockchain ecosystem projects or collaboration opportunities, feel free to contact me directly: [email protected]

Disclaimer：

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