It is impossible for TON official to build EVM second layer

Written by: Jaleel plus six , BlockBeats

Recently there have been some rumors that "TON is launching EVM L2, but I think this is impossible, at least not now.

Before formally analyzing the reasons, it is necessary to briefly mention the core technical features of TON (swipe down three lines to skip the technical content).

First, it should be clear that the smart contracts on the TON chain run on the TON Virtual Machine (TVM), which is completely incompatible with the Ethereum Virtual Machine (EVM).

Secondly, the smart contract programming language used by the TON chain is FunC, a language designed specifically for the TON blockchain. Unlike traditional programming languages, FunC emphasizes the decentralized technology of the asynchronous paradigm.

In addition, TON Dynamic sharding technology is used to automatically expand the blockchain into more shard chains according to the network load. TON's architecture includes a main chain and multiple working chains. The working chain can be further sharded, and each shard chain can handle some transactions.

Why is it impossible for TON to officially do EVM Layer 2?

From the perspective of the token price increase this year, TON's token price growth is the most obvious, far exceeding other head public chains.

If you bought TON on January 1, 2024, you have gained more than three times the profit by holding it until now. At present, TON's market value has surpassed Dogecoin, and its market value ranking has risen to ninth place.

TON has also risen along with the coin price.

The bridge is open, and the villagers left

TON does not want its TVL to flow out of TON to EVM. Analyzing the current TVL and liquidity data of TON, we can understand this more clearly.

From the perspective of TVL data growth, before this year, TON's TVL data has remained around 10 million US dollars, but in the 7 months after entering 2024, TON's TVL data has been rising, almost reaching a 70-fold increase.

According to DefiLlama data, TON's current total locked value (TVL) is $718 million, of which stablecoins account for $571 million. This shows that TON already has a certain financial foundation in the DeFi field, but compared with other top public chains, the scale is still insufficient.

In contrast, Ethereum's DeFi ecosystem is much larger. Currently, Ethereum's total locked value (TVL) is about $54.2 billion, about 80 times that of TON.

However, from a certain perspective, TON was not originally designed with high TVL as the goal.

"TON's native DeFi users account for less than 10% of the total number of users. The difference between TON and most L1s is that most projects, such as small games, are off-chain businesses, and settlement is done on the chain." said Vivi, head of research at the TON Foundation.

So from this point of view, TVL is not important at all, or the track that TON is good at is not to improve TVL data.

Moreover, TON is not good at retaining liquidity. The total amount transferred from Ethereum to TON is 18.95 million US dollars, while the total amount transferred from TON to Ethereum is 16.1 million US dollars,

In terms of the inflow and outflow of liquidity, if EVM compatibility is achieved one day, TON does not seem to have a particularly big advantage and can absorb long-term liquidity from Ethereum.

Backed by Telegram's over 800 million active users, Telegram's users are "rich as hell" or "huge wealth", and the TON chain has a more natural advantage in user growth. For TON, once EVM is realized, it will be working for Ethereum.

Without sports cars, why build highways?

In the past two months, the TVL of leading DEXs on TON, including STON.fi and DeDust, has also increased by nearly 20 times.

Just looking at the growth multiples seems amazing, but the specific data is actually very limited.

The total transaction volume of DEX on the TON chain is US$405 million, the buy and sell transaction volume is US$10.76 million, and the number of daily transactions is about 200.

It can be observed that a key catalyst for the rapid growth of TON DeFi data is the partnership with Tether, which has expanded USDT on TON and promoted payments on Telegram. This is the same as mentioned above. The difference between TON and most L1s is that most projects are off-chain businesses, and the chain is just a settlement.

Although there are some DEX and staking platforms running on the TON chain, the number is limited, and there is no mature lending agreement or CDP (collateralized debt position) system.

Compared with the transaction volume data of other public chains, it is even more obvious. DeFi applications in the TON ecosystem are still in the early stages of development and have not yet reached a mature stage.

In the chat records that have been widely circulated in the group recently, Vivi also said bluntly: "When the TON main chain has only 2 dex, 1 lending, and 0 CDP, we will push our own TVM first."

At the same time, we all know that TON's speed and low cost are its proud features. In 2023, it set a Guinness World Record for processing speed, reaching 104,715 transactions per second.

It is not high in terms of transaction costs. Specific costs: the average cost of sending any number of TON is 0.0055 TON; the average cost of sending any number of customized JetTON is 0.037 TON; the average cost of casting 1 NFT is 0.08 TON; the cost of storing 1MB of data on TON for one year is 6.01 TON.

At this stage, TON has almost no demand for the second layer, because in the current ecological environment, the first layer is already fast and cheap enough.

So where did the rumor come from?

So where did the rumor that TON is going to build a second layer come from? I found that the channel that first spread the misunderstanding was coindesk, and they have now corrected the explanation.

In fact, the project that will be doing the second layer of TON is a third-party project called TAC, which has nothing to do with TON.

The TAC project will utilize Polygon’s Chain Development Kit (CDK), a customizable toolkit that allows developers to create their own second-layer blockchain based on Polygon’s zero-knowledge technology, and Polygon’s AggLayer, an interoperability layer for solving blockchain fragmentation.

Polygon, zero-knowledge, 2 layers, it sounds like everything, but I don’t think this is what TON needs at the moment.

TVM is the only first-class citizen

While team members clarified that TON officials were not working on EVM L2, TVM was also a key word.

For example, Anthony Tsivarev, Director of Ecosystem Development at the TON Foundation, said: "Have you heard of Layer 2 on TON based on the Polygon stack? Some people may think that this is the official version of TON, but it is not. This is independently developed by a third-party team on TON. We believe in TVM!"

Inal Kardan, head of TON games, said bluntly: TVM is the only first-class citizen in TON.

Looking back at the white paper, TON officials clearly stated in their blockchain development strategy that TVM (Threaded Virtual Machine) is its top priority.

For TON, all the latest developments in decentralized technology will ultimately be based on the asynchronous paradigm. As a core component of the TON blockchain, it is designed to run smart contracts efficiently and securely. Unlike EVM (Ethereum Virtual Machine), TVM emphasizes an asynchronous paradigm, enabling it to handle more complex decentralized applications (DApps).

For example, TONNEL Network uses the latest updates of TVM to implement complex calculations and proof verification, which enables it to implement zero-knowledge proofs on smart contracts, thereby enhancing on-chain privacy. TONNEL Network uses TVM for private transactions and the deployment of the ZkNFT standard, further demonstrating the important position of TVM in the TON ecosystem.

It is impossible for TON to officially build an EVM layer 2, so is it possible in the future? In the TON white paper, there is a paragraph that basically explains this:

-Is there a need for L2 on the TON?

-At any transaction cost, there will always be applications that cannot sustain such a fee but can function at a much lower cost. Similarly, regardless of the latency achieved, there will always be applications that require even lower latency. Therefore, it is conceivable that there might eventually be a need for L2 solutions on the TON platform to cater to these specific requirements.

(No matter what the transaction cost is, there will always be some applications that cannot sustain such a fee but can function at a much lower cost. Similarly, regardless of the latency achieved, there will always be some applications that require even lower latency. Therefore, it is conceivable that there might eventually be a need for L2 solutions on the TON platform to cater to these specific requirements.)

In my opinion, TON layer 2 can exist, but it is not necessary. Because TON can fully utilize its own sharding technology to create a new working chain.

In the future, the only possibility for TON to be EVM-compatible is for developers. Because on TON, to run smart contracts, you need to use FunC, a specially created programming language. For most developers who currently learn Solidity, they need to "readjust" their way of thinking.

In short, it is difficult to develop, which is why there are currently few DeFi products in the TON ecosystem. "The second layer of TON is mainly for 99% of people who cannot develop projects on the main chain," Vivi said very directly.

But at this point, TON officials may also have other solutions, such as TVM SDK, which has begun to support multiple programming languages.

So this is why I think it is impossible for TON to officially build EVM layer 2, at least not now.

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