Toncoin just became the center of one of the most ambitious experiments in crypto history, as Telegram took control of its underlying blockchain in a move that CoinShares says no company of this scale has ever attempted.
Key Takeaways:
- Telegram is now the primary validator of TON, the first company of its scale to run its own blockchain.
- TON’s annual inflation rate is rising from 0.6% to 3.6% as faster processing prioritizes utility over scarcity.
- DIME offers investors a way to capture Layer 1 altcoin growth without picking individual projects.
Telegram, the encrypted messaging app with nearly one billion active users, officially became the primary validator of The Open Network, or TON, in early May, according to a recent CoinShares report. A validator is an entity responsible for confirming transactions and maintaining a blockchain’s operations. The TON Foundation previously held the position.
TON is a Layer 1 altcoin, meaning it operates as a foundational blockchain network that runs on its own technology. That is the specific category of digital asset targeted by the CoinShares Altcoins ETF (DIME), which targets Layer 1 altcoin exposure through a regulated structure.
See more: Are Altcoins Still Just Venture Capital?
Telegram is the first company of its size to run its own blockchain, according to CoinShares. Meta, Reddit, and X, formerly known as Twitter, all explored similar efforts before eventually walking away.
To mark the transition, Telegram launched a relaunch program called MTONGA, short for Make Ton Great Again, structured around seven steps, according to CoinShares. Two upgrades are already in place. Catchain 2.0, a technical update, now enables near-instant transaction processing. Fees have been reduced to 0.00039 TON per transaction.
TON sits at the center of Telegram’s advertising business. Advertisers pay for campaigns in Toncoin, while channel owners collect their revenue share in TON through Telegram’s monetization tools, according to CoinShares. Telegram’s advertising platform, crypto wallet, and other services all depend on the blockchain running around the clock.
What Toncoin's Takeover Means for Altcoin Investors
Telegram’s deep financial ties to TON give it a direct incentive to keep the network stable, CoinShares noted. But the takeover also comes with a trade-off. Faster block processing pushes TON’s annual inflation rate from 0.6% to 3.6%, which could weigh on investors holding Toncoin as a store of value rather than using it for transactions, according to the report.
Centralization is the other concern that CoinShares has flagged. Telegram’s lead validator role gives it control over the network’s direction, counter to the decentralized model that most blockchains follow. Given the founders’ history with Russia, CoinShares noted that state-level influence remains a real question.
CoinShares said that a Telegram success could challenge the broader model for how Layer 1 blockchains are built and governed. Most present their infrastructure as neutral. Telegram is betting that direct ownership can drive faster execution.
The governance complexity surrounding TON illustrates a broader challenge for Layer 1 altcoin investors. Evaluating a project like TON requires tracking not just price performance but validator structures, inflation schedules, and the political backdrop of its founders.
For investors who want exposure to the Layer 1 infrastructure trend that Telegram’s takeover represents, without having to navigate those variables independently, DIME offers a regulated, equally weighted structure that screens holdings for liquidity and applies oversight across a basket of Layer 1 altcoin products.
For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.
