Research: These limitations of TON may make it difficult to become the next SOL or ETH

Author: Blockworks Research; Compiler: Felix, PANews

Recently, the narrative about TON and Telegram has been very popular, and many people believe that TON will be the next SOL or ETH. Blockworks Research published an article to interpret it, believing that TON's subsequent growth is weak and may fail to live up to expectations.

TelegramUser stickiness is not high

Telegram has global influence, and its considerable number of daily active users (DAU) can divert users to TON. By this standard, Telegram is one of the most used applications in the world.

According to data provided by Telegram, Telegram is one of the most popular applications in the world. The total number of users is 900 million, ranking 8th among global applications.

However, measured by DAU, Telegram's user stickiness is overestimated.

The DAU/MAU ratio of each social application in the figure below shows that although Telegram's MAU (monthly active users) is high, its DAU is relatively low (around 55 million to 200 million, which is very low compared to competing applications), and the DAU/MAU ratio is only 15%.

In comparison, Facebook's ratio is 69%, WeChat is about 67%, Instagram is 60%, TikTok (only the US market is counted) is 49%, and Twitter (X) is 45%. This shows that Telegram has low market penetration and a lower profitable user base than the market expected.

PANewsNote:DAU/MAUratio can measure the user stickiness of a network or application

IncompatibleEVM, few programming languages

The TON ecosystem team will face challenges from lack of EVM compatibility and FunC (the native programming language of blockchain).

The Ton Virtual Machine (TVM) is not compatible with the Ethereum Virtual Machine (EVM) because TON uses a completely different architecture (TON is asynchronous, while Ethereum is synchronous). Therefore, the TON ecosystem does not support development in Ethereum's Solidity programming language.

According to a 2023 developer survey report (with more than 90,000 developers participating), Rust is the most respected language, with more than 80% of developers hoping to use it again next year. 46.4% of developers expect to use Solidity.

The three programming languages ​​available on TON are Fift, FunC, and Tact. The most used language among the three is FunC. Although FunC looks a lot like C, it is generally not known or respected.

End-market coverage is limited

A big part of the growth of the TON narrative is that Telegram will be the next WeChat. But WeChat is blocked from the US market and only serves the Chinese market.

In stark contrast, today's application market is dominated by financially strong tech giants with well-established network effects, and Telegram's largest markets are scattered across the Asia-Pacific region (excluding China and Eastern Europe), adding a layer of complexity to startups using Telegram for distribution.

Here is the distribution of Telegram's full-year downloads in 2022:

• India: 104 million downloads.

• Russia: 34 million downloads.

• Indonesia: 27 million downloads

• United States: 26 million downloads.

• Brazil: 21.94 million downloads.

• Egypt: 14.85 million downloads.

• Vietnam: 11.84 million downloads.

• Mexico: 11.61 million downloads.

• Ukraine: 10.76 million downloads.

• Turkey: 9.79 million downloads.

FDV is overvalued

Despite these realities, TON still has huge growth potential and new investors have little safety margin.

The figure below shows that among all public chains, TON's FDV is 8.6 times its network's annualized DEX trading volume, ranking first and at the highest level.

In addition, FDV is 927 times its network's annualized fee, ranking high among all public chains.