Recently there have been some rumors that "TON is launching EVM L2, but I don't think that's possible, at least not for now.

Before we begin to analyze the causes, we need to briefly mention the core technical features of TON (scroll down three paragraphs to skip the technical content).

First of all, it is important to be clear that 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, which is a language designed specifically for the TON blockchain. Unlike traditional programming languages, FunC places more emphasis on the decentralization of asynchronous paradigms.

In addition, TON uses dynamic sharding technology, which automatically scales the blockchain to more shard chains based on network load. TON's architecture consists of a main chain and multiple worker chains, which can be further sharded, and each shard chain can process part of the transaction.

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

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

If you buy TON on January 1, 2024, you will have more than tripled your earnings by holding it so far. At present, TON's market capitalization has surpassed Dogecoin, and its market capitalization ranking has risen to ninth.

Along with the price of the coin, there is also the ecological data of TON, but it is obvious that it has not reached the level of the need for layer 2.

The bridge was opened, and the villagers left

The TON does not want its TVL to flow out of the TON to the EVM. This can be understood more clearly by analyzing the TVL and liquidity data of the current TON.

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

According to DefiLlama, TON currently has a total locked volume (TVL) of $718 million, of which stablecoins account for $571 million. This shows that TON has a certain capital base in the DeFi field, but the scale is still insufficient compared to other top public chains.

In contrast, Ethereum's DeFi ecosystem is much larger, with Ethereum's total lock-up (TVL) currently around $54.2 billion, which is about 80 times that of TON.

However, in a way, TON was not designed with high TVL in mind.

"TON's native DeFi users are less than 10% of the total number of users. The difference between TON and most L1s is that most projects are off-chain businesses, and on-chain settlements are made." said vivi, a member of 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 itself to improve TVL data.

Also, TON is not good at storing liquidity. The total amount transferred from Ethereum to TON was $18.95 million, while the total amount transferred from TON to Ethereum was $16.1 million,

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 will be able to absorb long-term liquidity from Ethereum.

Backed by Telegram's more than 800 million active users, Telegram's users are "pouring wealth" or "huge wealth", and the TON chain has a more natural advantage in user growth. For TON, once the EVM is implemented, it is working for Ethereum.

No sports car, what to build high-speed

The leading DEXs on TON, including STON.fi and DeDust, have also seen a nearly 20x increase in TVL over the past two months.

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

The total trading volume of DEXs on the TON chain is $405 million, the buying and selling volume is $10.76 million, and the number of daily transactions is about 200.

While trading volume has increased in recent years, overall market activity remains limited.

It can be observed that a key catalyst for the rapid growth of TON DeFi data is a partnership with Tether to expand USDT on TON and promote payments on Telegram, which is the same as mentioned above, TON is different from most L1 projects in that most projects are off-chain businesses, and on-chain settlements are just done.

Although there are a number of DEXs and staking platforms running on the TON Chain, there are only a limited number of them, and there is no mature lending protocol or CDP (collateralized debt warehouse) system.

When 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 maturity.

In the recent chat records that have been widely circulated in the group, vivi also bluntly said: "In the case that the TON main chain only has 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, setting a Guinness World Record for processing speed in 2023 with 104,715 transactions per second.

It's also 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 custom JetTON is 0.037 TON; The average fee to mint 1 NFT is 0.08 TON; The cost of saving 1MB of data on TON for a year is 6.01 TON.

At the current stage, there is almost no demand for the second floor, because in the current ecological environment, the first floor is fast and cheap enough.

So where did the rumors come about?

So where did the rumor that TON was going to do the second layer come about? I found that the first source of misreading was Coindesk, and they have now corrected the explanation.

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

The project, called TAC, will leverage Polygon's Chain Development Kit (CDK), a customizable toolkit that allows developers to create their own Layer 2 blockchains based on Polygon's zero-knowledge technology, as well as Polygon's AggLayer, an interoperability layer used to address blockchain fragmentation.

Polygon, zero-knowledge, layer 2, sounds like it's all there should be, but I don't think that's what TON needs at the moment.

TVM is the only first-class citizen

While the team members clarified that TON was not officially doing EVM L2, it could be seen that TVM was also a key word.

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

Inal Kardan, head of TON Games, is even more blunt: TVM is the only first-class citizen in TON.

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

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 the EVM (Ethereum Virtual Machine), TVM emphasizes an asynchronous paradigm, allowing it to handle more complex decentralized applications (DApps).

TONNEL Network, for example, leverages the latest updates to TVM for complex computation and proof verification, which enables it to implement zero-knowledge proofs on smart contracts, enhancing on-chain privacy. TONNEL Network's use of TVM for private transactions and the deployment of the ZkNFT standard further demonstrates the importance of TVM in the TON ecosystem.

It is impossible for TON to officially do EVM Layer 2, so is it possible in the future? In TON's 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.

(Regardless of transaction costs, there will always be applications that can't sustain such a fee, but can run at a much lower cost.) Again, regardless of the latency of the implementation, there will always be some applications, so it is conceivable that eventually an L2 solution on the TON platform may be required to meet these specific requirements. ）

In my opinion, TON layer 2 can be had, but it is not necessary. Because TON can use its own sharding technology to make a new work chain.

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

In short, it is difficult to develop, which is why there are very few Defi products in the TON ecosystem. "The second layer of TON is mainly because 99% of people can't develop projects with the main chain," vivi said directly.

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

So that's why, I don't think it's possible for TON to officially do EVM Layer 2, at least not for now.