Telegram (TON)

Telegram is a cloud-based mobile and desktop messaging app with a focus on security and speed.

About Telegram (TON)

Telegram (TON) intends to leverage its expertise in encrypted distributed data storage to create TON (Telegram Open Network), an all-encompassing decentralized network solution including a unique multi-blockchain architecture, a peer-to-peer network, distributed file storage, a third-party service layer with standardized interfaces, a micropayment platform, network proxy, DHT, and DNS. TON is designed to be fast and inherently scalable, so as to be capable of hosting a new generation of cryptocurrencies and decentralized applications.TON will allow easy integration with third-party messaging and social networking applications, the primary integration being with the Telegram Messenger. TON light wallets will be built into Telegram applications, which will then also double as TON clients. The TON tokens which will serve as the principal currency on the platform and in Telegram’s in-app economy will be called Grams.
Telegram declares itself as uniquely positioned to establish the first mass-market cryptocurrency by providing a platform that combines speed and scalability, intuitive user interfaces, and an engaged user base. The team will rely on its cumulated experience to create light wallets, exchanges, and identification services that will allow users to get on board with cryptocurrencies in an intuitive way, and will leverage its existing ecosystem of communities, developers, publishers, payment providers, and merchants to drive demand and value for TON cryptocurrency.

Disclaimer: The review is based on a leaked whitepaper and is pending for official verification from Telegram.

Token Sale Use of Blockchain

Product

3.4
Product
Readiness

Is the product ready for use? Is there a working prototype or MVP? How long until it is operational?

1.0
N/A
1 - Nothing yet, just an idea.
Appeal

How appealing is the product? How good or necessary is it? Does it have a distinct edge?

4.0
N/A
4 - Captivating.
Target User Base

Is it mass market or niche?

4.0
N/A
4 - Large audience / wide market.
Competition

Are there many other similar solutions or is this one of just a few, or even one of a kind?

3.0
N/A
3 - Some normal competition.
Innovation

How innovative or inventive is the product, either conceptually or technologically?

5.0
N/A
5 - Highly specialized, proprietary.

Product

The Telegram Open Network (TON) is meant to be a fast, secure, scalable, and user-friendly blockchain and network project. “One might think about TON as a huge distributed supercomputer, or rather a huge “superserver”, intended to host and provide a variety of services.” TON is comprised of the following components:
• TON Blockchain – a flexible multi-blockchain platform, capable of processing millions of transactions per second, with Turing-complete smart contracts, upgradable formal blockchain specifications, multi-cryptocurrency value transfer, support for micropayment channels and off-chain payment networks.
• TON Network – a peer-to-peer network.
• TON Storage – a distributed file storage torrent-like technology, accessible through the TON Network, used by the TON Blockchain to store archive copies of blocks and status data (snapshots), and also available for storing user or service files.
• TON Proxy – a network proxy/anonymizer layer, similar to the I2P (Invisible Internet Project), used to hide the identity and IP addresses of TON Network nodes if necessary.
• TON Services – a platform for arbitrary third-party services, residing in and available through TON Network and TON Proxy, with formalized interfaces enabling browser or app interaction for decentralized apps and smart contracts.
• TON DHT – A Kademlia-like distributed hash table used as a “torrent tracker” for TON Storage, as an “input tunnel locator” for TON Proxy, and as a service locator for TON Services.
• TON DNS – a service for assigning human-readable names to accounts, smart contracts, services and network nodes.
• TON Payments – a platform for micropayments and a micropayment channel network. It can be used for fast off-chain value transfers, and for paying for services powered by TON Services.

The TON Blockchain will support up to 2^32 different basic coins (each of which can have several additional tokens as well). The fundamental TON coin will be called Gram. Telegram will offer streamlined interfaces for TON transactions and TON’s primary integration will be with the Telegram Messenger. Telegram’s existing ecosystem will offer simple ways of buying and spending Grams via its Bot Platform and a TON-based ad exchange, allowing for trade in cryptocurrencies, paid promotional advertising, paid content and subscription services, virtual storefronts, etc. Telegram will also offer a searchable registry of available decentralized services, with lists and recommendations, similar to Google Play / App Store. Grams will also be used as gas paid to validator nodes, stakes deposited by validators, capital lent out to validators, voting power on protocol parameters, as well as payment for use of TON platform components and services (unless these are rendered free by the application owners). In addition, Telegram aims to provide users with a secure universal ID via registration on its platform.

Product Whitepaper

Use of Blockchain

3.8
Use of Blockchain
Blockchain Development

Is blockchain technology essential? Does it make the solution significantly different and better?

5.0
N/A
5 - Novel blockchain and service.
Disruptive Blockchain Advantage

How disruptive is the introduction of blockchain technology into the product's market space?

4.0
N/A
4 - Generally disruptive.
Need for a Custom Token (vs. BTC or ETH)

Is the token essential or could it be done just as well or better with fiat or Bitcoin?

4.0
N/A
4 - Token is essential to platform.
System Decentralization (besides token)

How decentralized is the system architecture other than the token (e.g., data collection, storage, access, and use, or decision making processes, etc.)?

2.0
N/A
2 - Centralized with some plans to decentralize.
Contribution to Blockchain Ecosystem

How compelling is the solution's contribution to the evolution of blockchain infrastructure and economy?

4.0
N/A
4 - Captivating.

Use of Blockchain

• The TON Blockchain will be comprised of a primary masterchain, along with up to 2^32 workchains, each of which can be further divided into up to 2^60 shardchains. The masterchain will contain general information about the protocol and parameter values, the set of validators and their stakes, the set of currently active workchains and their “shards”, and the set of hashes of the most recent blocks of all workchains and shardchains. The workchains will contain value transfers and smart-contract transactions. Different workchains may have different rules, formats, VMs, cryptocurrencies, etc., but they will all have to satisfy certain basic interoperability criteria. Shardchains will have the same rules and block format as their parent workchain, but will be responsible only for a subset of the accounts. Once the hash of a block of a shardchain is incorporated into a block of the masterchain, it will be considered fixed and immutable.
• TON will use a Proof-of-Stake approach, in which processing nodes (validators) deposit stakes (large amounts of TON coins) via a special masterchain transaction in order to be eligible for new block generation and validation, and reach consensus through a variant of the Byzantine Fault Tolerant protocol. A subset of eligible validators will be assigned to each shard in a deterministic pseudorandom way, changing approximately every 1024 blocks. When consensus is reached and a new block is created, validators will divide between themselves the transaction fees plus some newly-minted coins. When a new masterchain block is generated, it will include the hashes of the latest blocks of all shardchains, according to BFT consensus of at least two thirds (by stake) of validators. If a validator signs an invalid block candidate, it may be automatically punished by losing part or all of its stake, or by being suspended from the set of validators for some time.
• To achieve scalability, shardchains will be able to automatically split and merge to accommodate changes in load, and smart routing mechanisms will be employed for swift interchain transactions. Furthermore, each shardchain block will itself be a small ‘vertical’ blockchain, ordinarily consisting of a single block, but capable of being updated with a new ‘vertical’ block for incorporating replacements and fixes without a fork. (Strict rules are to forbid changing account-chains that are not really affected, and changes will be reflected in new ‘vertical’ masterchain blocks as well). Many of the TON Blockchain parameters will be configurable, so that they can be changed by certain special proposal/vote/result transactions in the masterchain, without a need for hard forks. Such changes will require two-thirds of validator votes and more than half of the votes of all other participants.
• The TON Blockchain will support up to 2^32 different basic coins via its workchains (each of which can have several additional tokens as well). Initiating a new workchain will require high masterchain transaction fees (for publishing the formal specification) and a two-thirds consensus of validators (who will need to upgrade their software and signal their readiness via special masterchain transactions). The TON coin, aka the Gram, will be the basic cryptocurrency of Workchain Zero, and will be used for transaction fees and validator stakes.
• The TON Virtual Machine will be the one to execute smart-contract code in the masterchain and in the basic workchain. (Other workchains will have the option of using it as well, but won’t have to.) It is intended to work “not just with 256-bit integers, but with (almost) arbitrary “records”, “structures”, or “sum-product types””, and high-level languages along the lines of Java (imperative) and Haskell or ML (functional) are envisioned.
• The founders of Telegram will be responsible for the efficient use of funds resulting from any sale of tokens from the TON Reserve. During the initial stage of development, at least 52% of the entire token supply will be retained by the TON Reserve. Over time, all responsibilities related to TON and its Reserve will be transferred to the TON Foundation, a not-for-profit organization. By 2021, when TON is planned to have been implemented and deployed, TON will become “The Open Network” (rather than “Telegram Open Network”), and from then be maintained by the TON Foundation.

Use of Blockchain Roadmap

Whitepaper

3.6
Whitepaper
Comprehensiveness

Does it cover the full scope of the problem and solution?

4.0
N/A
4 - Satisfactory coverage, well written.
Readability

Is it easy enough to understand?

3.0
N/A
3 - Readable, takes some time.
Transparency

Does it candidly describe and disclose where the project now stands, how much exists and how much still needs to be done, etc.?

4.0
N/A
4 - Informative disclosure.
Business Plan Presentation

Does it contain a viable, comprehensive business plan?

3.0
N/A
3 - More information required.
Technology Presentation

Does it present a well thought out technological architecture? Does it address implementational challenges?

4.0
N/A
4 - Clear, well thought out, realistic.

Whitepaper

Confirmed official whitepaper is not yet available, however leaked versions are available of a 23-page whitepaper providing an overview, and a whopping 132-page technical whitepaper  (claiming to focus only on the platform’s uniquely defining features so as to “reduce the size of this document to reasonable proportions”). The short whitepaper is easy to understand and hugely ambitious. The long, technical whitepaper is indeed highly technical and very long, and contains a lot of parentheses, examples, and non-committal arguments, making it difficult to get through and comprehend, but at the same time it is also very detailed and thorough with regard to design considerations.

Whitepaper Compliance

Roadmap

3.4
Roadmap
Concreteness

Is there a concrete and practical development plan (vs. just a conceptual vision)?

3.0
N/A
3 - An overall plan, major milestones stated.
Feasibility

Is the development plan realistic? Is it based on reasonable goals and timelines?

3.0
N/A
3 - Optimistic.
Vision

Is there a larger, long-term vision?

5.0
N/A
5 - Paving the way for the future.
Dependencies (services or capabilities)

How available, operational, or trusted are the other systems or capabilities on which the project relies?

4.0
N/A
4 - Available and trusted.
Current Position

Where is the project now, relative to its vision and plans?

2.0
N/A
2 - Critical obstacles ahead.

Roadmap

Q3 2013 Launch of Telegram Messenger and the Telegram API
Q2 2015 Launch of the Bot API and Platform
Q2 2017 Launch of the Payments Platform
Q2 2017 Start of the development of TON
Q1 2018 Launch of Telegram External Secure ID
Q2 2018 Launch of the Minimal Viable Test Network of TON
Q3 2018 Testing and security audits of TON
Q4 2018 Deployment of the stable version of TON
Q4 2018 Launch of Telegram Wallet
Q1 2019 Creation of TON-based economy in Telegram
Q2 2019 Launch of TON Services, TON Storage, and TON Proxy

Roadmap Company and Team

Compliance

3.8
Compliance
Token Utility (value through usage)

How much use is there for the token itself (regardless of its value as an investment vehicle)?

5.0
N/A
5 - Foundational or varied use cases.
Token as Security (tradable instrument)

How valuable is the token as an investment vehicle or financial instrument?

4.0
N/A
4 - Not as such, or compliance is assured.
Token/Smart-Contract Readiness

Is the blockchain infrastructure of the project ready for use? Is there a working prototype or MVP? How long until it is operational?

1.0
N/A
1 - Nothing yet, just an idea.
Attention to Compliance Issues

How much attention is given to compliance (via token and ecosystem design, token sale participation, etc.)? Is this issue addressed directly and coherently?

5.0
N/A
5 - Professional, audited.
Legal Review/Risk Assessment

What kind of legal documentation (reviews or agreements) and risk assessment are provided?

4.0
N/A
4 - Professional.

Compliance

• The principal cryptocurrency of the TON Blockchain, and in particular of its masterchain and basic workchain, is the TON Coin, also known as the Gram (GRM). It will be used to make deposits required to become a validator, as well as for transaction fees, gas payments (i.e., smart-contract message processing fees), and persistent storage payments. • The token sale will likely use a SAFT to be converted 1:1 to native TON tokens (Grams) after the deployment of the TON Blockchain in Q4 2018. (Full launch planned for Q2 2019.) • Telegram plans to provide users with virtual passports for logging into services that require user verification – this will require passing KYC/AML. • Further information relating to compliance is not currently available, however the document submitted to the SEC regarding the $850 million raised can be viewed online.

Compliance Token Sale

Company and Team

5.0
Company and Team
Company Stage and Foundation

Is the company already established? Has it raised funds before? Is it mature?

5.0
N/A
5 - Well established, has raised significant funds.
Background of Lead Team Members

Do we know who they are? Do they have LinkedIn profiles? Do they have solid, relevant backgrounds?

5.0
N/A
5 - Accomplished, recognized.
Team Assembly and Commitment

Is a solid, fully committed core team in place? Do they have online (e.g. LinkedIn) profiles showing sufficient relevant experience? Is their participation transparent?

5.0
N/A
5 - Skilled and balanced, fully committed.
Team Skill Set Relevance

Does the amount of talent and skill in each area seem to fit the project requirements?

5.0
N/A
5 - Meeting and exceeding project requirements.
Team Skill Set Balance

Is the team well-rounded (biz/tech/blockchain)? Is there sufficient talent and skill in all areas of required development?

5.0
N/A
5 - Excellent, all aspects covered.

Company and Team

• “Telegram was founded in 2013 by libertarians to preserve freedom through encryption. The project has declared not-for-profit goals and remains independent and self-funded… Telegram deploys a distributed server infrastructure to synchronize encrypted data across multiple independent server clusters spread across different continents and jurisdictions. The resulting combination of speed, encryption, and independence attracted millions of users within a few months after the project’s launch in 2013. Telegram kept evolving with an average of 12 major updates a year. By February 2016, it had 100 million monthly active users and was delivering 15 billion messages daily. In October 2017, Telegram reached 170 million monthly users, delivering 70 billion messages every day. At least 500,000 new users join Telegram daily. At this rate, the service is expected to hit 200 million monthly users in Q1 2018.”
• “Telegram has a world-class team of 15 developers that were selected from thousands of contenders over the last ten years. To become part of the team, each of its current members had either to win in the world’s top programming contests or to take the first place in one of the nationwide multi-level coding competitions held by the founder of Telegram. Core team members have ten years of experience in building scalable projects for tens of millions of users… The Telegram backend team, which has an unparalleled ratio of winners of worldwide coding competitions, specializes in creating secure data storage engines for distributed server infrastructures. All networking, cryptographic, and database engine software running on thousands of Telegram servers is custom-built by these developers.”
• Founded by brothers Nikolai and Pavel Durov, who had previously founded the social networking site VK (VKontakte.com, worth an estimated $3 billion). According to Pavel Durov’s Wikipedia page, the Durov brothers “have traveled the world in self-imposed exile as citizens of Saint Kitts and Nevis” since resigning from VK amidst controversy regarding freedom of expression on the platform at the time of the crisis in Ukraine. Nikolai is a renowned mathematician and a world-class programmer, who, as CTO, scaled VK and then Telegram to tens of millions of daily users. “In 2014 Nikolai became interested in Bitcoin and related technologies. His research on these topics culminated in TON’s Technical White Paper, where he summarized the advancements of blockchain technology and proposed a novel architecture for scalable decentralized ledgers”. “Pavel first gained international recognition for founding VK, which under his leadership commanded a 70% market share in Russia, Ukraine and Belorussia. An outspoken libertarian, he has published free market manifestos urging the Russian government to deregulate and decentralize the country’s economy… Pavel founded Telegram and became interested in cryptocurrencies in 2013, when he spent $1.5 million of his savings on Bitcoin that he holds to this day.”
• The whitepaper also introduces 11 additional ‘notable team members’: Aliaksei Levin, Vitalik Valtman, Arseny Smirnov, and eight who are listed by first name only. Needless to say, LinkedIn profiles and such are not provided, but team members are presented with their positions at Telegram and VK, and contests each has won.

Company and Team Product

Token Sale

2.4
Token Sale
Raise Amount Max

Is there a clear cap? Is the maximum raise amount modestly sufficient (as opposed to either greedy or insufficient)?

1.0
N/A
1 - Very greedy (e.g. uncapped).
Raise Amount Min

Is the minimum raise reasonable considering the development plan? Are there raise-amount dependent milestones?

1.0
N/A
1 - None or nonsensical.
Fund Allocation

Is fund distribution and allocation reasonable and justified?

2.0
N/A
2 - Use of funds only loosely defined.
Token Allocation

Is the ratio of tokens sold to those kept reasonable? Does it prevent the company from having too much control?

3.0
N/A
3 - Sufficient company/community interest balance.
Media Presence and Following

Is the sale being talked about in Reddit, Bitcointalk, Social Media, Medium, etc.? Is information available and accessible? Is there interest?

5.0
N/A
5 - Exceptional presence and interest, having credibility.

Token Sale

• Telegram has launched a token sale in Q1 2018, purportedly aiming to raise as much as $1.2 Billion, about half in a private presale and half in a public sale, using the SAFT structure. Updated information shows that $850 million have already been raised in the highly demanded pre-sale.
• More than 80% of the raised funds will be spent on equipment, bandwidth, colocation, and user verification costs, while the rest will be allocated to wages, offices, and legal and consulting services. This is based on Telegram’s $70 million 2017 annual budget, of which $62 million were spent on equipment, etc. Telegram states that its projected spending over the next three years is $400 million, and that a total spending of about $620 million should allow it to reach one billion active users by 1/1/2022.
• The total supply of native TON tokens (Grams) is originally limited to 5 Gigagrams (i.e., five billion Grams). 4% (200 million Grams) will be reserved for the development team with a 4-year vesting period, and 10% will be allocated to the company. During the initial stage of development, at least 52% of the entire supply will be retained by the TON Reserve, which will use the bulk of “unallocated” Grams primarily as validator stakes, giving the TON Foundation a majority of votes during the first deployment phase of the platform. The remaining 44% (2.2 billion Grams) “can” be sold in accordance with the formula p_n:= 0.1 × (1 + 10−9)^n USD, causing supply coming from the TON Reserve to always be more expensive than the exchange price. Token price in bulk pre-sale to institutional investors will depend on the vesting period and volume. Telegram is purportedly requiring a minimum investment of $20 million for large presale discounts (possibly more than 70% of the final public sale price, which is targeted at $0.97), with varying lock-up periods (that could range from 3 to 18 months depending on the discount). After the TON Blockchain is fully deployed, the annual inflation rate is projected at 2% (as mining rewards to validators accumulate).

Product

The Telegram Open Network (TON) is meant to be a fast, secure, scalable, and user-friendly blockchain and network project. “One might think about TON as a huge distributed supercomputer, or rather a huge “superserver”, intended to host and provide a variety of services.” TON is comprised of the following components:
• TON Blockchain – a flexible multi-blockchain platform, capable of processing millions of transactions per second, with Turing-complete smart contracts, upgradable formal blockchain specifications, multi-cryptocurrency value transfer, support for micropayment channels and off-chain payment networks.
• TON Network – a peer-to-peer network.
• TON Storage – a distributed file storage torrent-like technology, accessible through the TON Network, used by the TON Blockchain to store archive copies of blocks and status data (snapshots), and also available for storing user or service files.
• TON Proxy – a network proxy/anonymizer layer, similar to the I2P (Invisible Internet Project), used to hide the identity and IP addresses of TON Network nodes if necessary.
• TON Services – a platform for arbitrary third-party services, residing in and available through TON Network and TON Proxy, with formalized interfaces enabling browser or app interaction for decentralized apps and smart contracts.
• TON DHT – A Kademlia-like distributed hash table used as a “torrent tracker” for TON Storage, as an “input tunnel locator” for TON Proxy, and as a service locator for TON Services.
• TON DNS – a service for assigning human-readable names to accounts, smart contracts, services and network nodes.
• TON Payments – a platform for micropayments and a micropayment channel network. It can be used for fast off-chain value transfers, and for paying for services powered by TON Services.

The TON Blockchain will support up to 2^32 different basic coins (each of which can have several additional tokens as well). The fundamental TON coin will be called Gram. Telegram will offer streamlined interfaces for TON transactions and TON’s primary integration will be with the Telegram Messenger. Telegram’s existing ecosystem will offer simple ways of buying and spending Grams via its Bot Platform and a TON-based ad exchange, allowing for trade in cryptocurrencies, paid promotional advertising, paid content and subscription services, virtual storefronts, etc. Telegram will also offer a searchable registry of available decentralized services, with lists and recommendations, similar to Google Play / App Store. Grams will also be used as gas paid to validator nodes, stakes deposited by validators, capital lent out to validators, voting power on protocol parameters, as well as payment for use of TON platform components and services (unless these are rendered free by the application owners). In addition, Telegram aims to provide users with a secure universal ID via registration on its platform.

Category Breakdown
Readiness

Is the product ready for use? Is there a working prototype or MVP? How long until it is operational?

1.0
N/A
1 - Nothing yet, just an idea.
Appeal

How appealing is the product? How good or necessary is it? Does it have a distinct edge?

4.0
N/A
4 - Captivating.
Target User Base

Is it mass market or niche?

4.0
N/A
4 - Large audience / wide market.
Competition

Are there many other similar solutions or is this one of just a few, or even one of a kind?

3.0
N/A
3 - Some normal competition.
Innovation

How innovative or inventive is the product, either conceptually or technologically?

5.0
N/A
5 - Highly specialized, proprietary.
Product Score:
3.4

Use of Blockchain

• The TON Blockchain will be comprised of a primary masterchain, along with up to 2^32 workchains, each of which can be further divided into up to 2^60 shardchains. The masterchain will contain general information about the protocol and parameter values, the set of validators and their stakes, the set of currently active workchains and their “shards”, and the set of hashes of the most recent blocks of all workchains and shardchains. The workchains will contain value transfers and smart-contract transactions. Different workchains may have different rules, formats, VMs, cryptocurrencies, etc., but they will all have to satisfy certain basic interoperability criteria. Shardchains will have the same rules and block format as their parent workchain, but will be responsible only for a subset of the accounts. Once the hash of a block of a shardchain is incorporated into a block of the masterchain, it will be considered fixed and immutable.
• TON will use a Proof-of-Stake approach, in which processing nodes (validators) deposit stakes (large amounts of TON coins) via a special masterchain transaction in order to be eligible for new block generation and validation, and reach consensus through a variant of the Byzantine Fault Tolerant protocol. A subset of eligible validators will be assigned to each shard in a deterministic pseudorandom way, changing approximately every 1024 blocks. When consensus is reached and a new block is created, validators will divide between themselves the transaction fees plus some newly-minted coins. When a new masterchain block is generated, it will include the hashes of the latest blocks of all shardchains, according to BFT consensus of at least two thirds (by stake) of validators. If a validator signs an invalid block candidate, it may be automatically punished by losing part or all of its stake, or by being suspended from the set of validators for some time.
• To achieve scalability, shardchains will be able to automatically split and merge to accommodate changes in load, and smart routing mechanisms will be employed for swift interchain transactions. Furthermore, each shardchain block will itself be a small ‘vertical’ blockchain, ordinarily consisting of a single block, but capable of being updated with a new ‘vertical’ block for incorporating replacements and fixes without a fork. (Strict rules are to forbid changing account-chains that are not really affected, and changes will be reflected in new ‘vertical’ masterchain blocks as well). Many of the TON Blockchain parameters will be configurable, so that they can be changed by certain special proposal/vote/result transactions in the masterchain, without a need for hard forks. Such changes will require two-thirds of validator votes and more than half of the votes of all other participants.
• The TON Blockchain will support up to 2^32 different basic coins via its workchains (each of which can have several additional tokens as well). Initiating a new workchain will require high masterchain transaction fees (for publishing the formal specification) and a two-thirds consensus of validators (who will need to upgrade their software and signal their readiness via special masterchain transactions). The TON coin, aka the Gram, will be the basic cryptocurrency of Workchain Zero, and will be used for transaction fees and validator stakes.
• The TON Virtual Machine will be the one to execute smart-contract code in the masterchain and in the basic workchain. (Other workchains will have the option of using it as well, but won’t have to.) It is intended to work “not just with 256-bit integers, but with (almost) arbitrary “records”, “structures”, or “sum-product types””, and high-level languages along the lines of Java (imperative) and Haskell or ML (functional) are envisioned.
• The founders of Telegram will be responsible for the efficient use of funds resulting from any sale of tokens from the TON Reserve. During the initial stage of development, at least 52% of the entire token supply will be retained by the TON Reserve. Over time, all responsibilities related to TON and its Reserve will be transferred to the TON Foundation, a not-for-profit organization. By 2021, when TON is planned to have been implemented and deployed, TON will become “The Open Network” (rather than “Telegram Open Network”), and from then be maintained by the TON Foundation.

Category Breakdown
Blockchain Development

Is blockchain technology essential? Does it make the solution significantly different and better?

5.0
N/A
5 - Novel blockchain and service.
Disruptive Blockchain Advantage

How disruptive is the introduction of blockchain technology into the product's market space?

4.0
N/A
4 - Generally disruptive.
Need for a Custom Token (vs. BTC or ETH)

Is the token essential or could it be done just as well or better with fiat or Bitcoin?

4.0
N/A
4 - Token is essential to platform.
System Decentralization (besides token)

How decentralized is the system architecture other than the token (e.g., data collection, storage, access, and use, or decision making processes, etc.)?

2.0
N/A
2 - Centralized with some plans to decentralize.
Contribution to Blockchain Ecosystem

How compelling is the solution's contribution to the evolution of blockchain infrastructure and economy?

4.0
N/A
4 - Captivating.
Use of Blockchain Score:
3.8

Whitepaper

Confirmed official whitepaper is not yet available, however leaked versions are available of a 23-page whitepaper providing an overview, and a whopping 132-page technical whitepaper  (claiming to focus only on the platform’s uniquely defining features so as to “reduce the size of this document to reasonable proportions”). The short whitepaper is easy to understand and hugely ambitious. The long, technical whitepaper is indeed highly technical and very long, and contains a lot of parentheses, examples, and non-committal arguments, making it difficult to get through and comprehend, but at the same time it is also very detailed and thorough with regard to design considerations.

Category Breakdown
Comprehensiveness

Does it cover the full scope of the problem and solution?

4.0
N/A
4 - Satisfactory coverage, well written.
Readability

Is it easy enough to understand?

3.0
N/A
3 - Readable, takes some time.
Transparency

Does it candidly describe and disclose where the project now stands, how much exists and how much still needs to be done, etc.?

4.0
N/A
4 - Informative disclosure.
Business Plan Presentation

Does it contain a viable, comprehensive business plan?

3.0
N/A
3 - More information required.
Technology Presentation

Does it present a well thought out technological architecture? Does it address implementational challenges?

4.0
N/A
4 - Clear, well thought out, realistic.
Whitepaper Score:
3.6

Roadmap

Q3 2013 Launch of Telegram Messenger and the Telegram API
Q2 2015 Launch of the Bot API and Platform
Q2 2017 Launch of the Payments Platform
Q2 2017 Start of the development of TON
Q1 2018 Launch of Telegram External Secure ID
Q2 2018 Launch of the Minimal Viable Test Network of TON
Q3 2018 Testing and security audits of TON
Q4 2018 Deployment of the stable version of TON
Q4 2018 Launch of Telegram Wallet
Q1 2019 Creation of TON-based economy in Telegram
Q2 2019 Launch of TON Services, TON Storage, and TON Proxy

Category Breakdown
Concreteness

Is there a concrete and practical development plan (vs. just a conceptual vision)?

3.0
N/A
3 - An overall plan, major milestones stated.
Feasibility

Is the development plan realistic? Is it based on reasonable goals and timelines?

3.0
N/A
3 - Optimistic.
Vision

Is there a larger, long-term vision?

5.0
N/A
5 - Paving the way for the future.
Dependencies (services or capabilities)

How available, operational, or trusted are the other systems or capabilities on which the project relies?

4.0
N/A
4 - Available and trusted.
Current Position

Where is the project now, relative to its vision and plans?

2.0
N/A
2 - Critical obstacles ahead.
Roadmap Score:
3.4

Compliance

• The principal cryptocurrency of the TON Blockchain, and in particular of its masterchain and basic workchain, is the TON Coin, also known as the Gram (GRM). It will be used to make deposits required to become a validator, as well as for transaction fees, gas payments (i.e., smart-contract message processing fees), and persistent storage payments. • The token sale will likely use a SAFT to be converted 1:1 to native TON tokens (Grams) after the deployment of the TON Blockchain in Q4 2018. (Full launch planned for Q2 2019.) • Telegram plans to provide users with virtual passports for logging into services that require user verification – this will require passing KYC/AML. • Further information relating to compliance is not currently available, however the document submitted to the SEC regarding the $850 million raised can be viewed online.

Category Breakdown
Token Utility (value through usage)

How much use is there for the token itself (regardless of its value as an investment vehicle)?

5.0
N/A
5 - Foundational or varied use cases.
Token as Security (tradable instrument)

How valuable is the token as an investment vehicle or financial instrument?

4.0
N/A
4 - Not as such, or compliance is assured.
Token/Smart-Contract Readiness

Is the blockchain infrastructure of the project ready for use? Is there a working prototype or MVP? How long until it is operational?

1.0
N/A
1 - Nothing yet, just an idea.
Attention to Compliance Issues

How much attention is given to compliance (via token and ecosystem design, token sale participation, etc.)? Is this issue addressed directly and coherently?

5.0
N/A
5 - Professional, audited.
Legal Review/Risk Assessment

What kind of legal documentation (reviews or agreements) and risk assessment are provided?

4.0
N/A
4 - Professional.
Compliance Score:
3.8

Company and Team

• “Telegram was founded in 2013 by libertarians to preserve freedom through encryption. The project has declared not-for-profit goals and remains independent and self-funded… Telegram deploys a distributed server infrastructure to synchronize encrypted data across multiple independent server clusters spread across different continents and jurisdictions. The resulting combination of speed, encryption, and independence attracted millions of users within a few months after the project’s launch in 2013. Telegram kept evolving with an average of 12 major updates a year. By February 2016, it had 100 million monthly active users and was delivering 15 billion messages daily. In October 2017, Telegram reached 170 million monthly users, delivering 70 billion messages every day. At least 500,000 new users join Telegram daily. At this rate, the service is expected to hit 200 million monthly users in Q1 2018.”
• “Telegram has a world-class team of 15 developers that were selected from thousands of contenders over the last ten years. To become part of the team, each of its current members had either to win in the world’s top programming contests or to take the first place in one of the nationwide multi-level coding competitions held by the founder of Telegram. Core team members have ten years of experience in building scalable projects for tens of millions of users… The Telegram backend team, which has an unparalleled ratio of winners of worldwide coding competitions, specializes in creating secure data storage engines for distributed server infrastructures. All networking, cryptographic, and database engine software running on thousands of Telegram servers is custom-built by these developers.”
• Founded by brothers Nikolai and Pavel Durov, who had previously founded the social networking site VK (VKontakte.com, worth an estimated $3 billion). According to Pavel Durov’s Wikipedia page, the Durov brothers “have traveled the world in self-imposed exile as citizens of Saint Kitts and Nevis” since resigning from VK amidst controversy regarding freedom of expression on the platform at the time of the crisis in Ukraine. Nikolai is a renowned mathematician and a world-class programmer, who, as CTO, scaled VK and then Telegram to tens of millions of daily users. “In 2014 Nikolai became interested in Bitcoin and related technologies. His research on these topics culminated in TON’s Technical White Paper, where he summarized the advancements of blockchain technology and proposed a novel architecture for scalable decentralized ledgers”. “Pavel first gained international recognition for founding VK, which under his leadership commanded a 70% market share in Russia, Ukraine and Belorussia. An outspoken libertarian, he has published free market manifestos urging the Russian government to deregulate and decentralize the country’s economy… Pavel founded Telegram and became interested in cryptocurrencies in 2013, when he spent $1.5 million of his savings on Bitcoin that he holds to this day.”
• The whitepaper also introduces 11 additional ‘notable team members’: Aliaksei Levin, Vitalik Valtman, Arseny Smirnov, and eight who are listed by first name only. Needless to say, LinkedIn profiles and such are not provided, but team members are presented with their positions at Telegram and VK, and contests each has won.

Category Breakdown
Company Stage and Foundation

Is the company already established? Has it raised funds before? Is it mature?

5.0
N/A
5 - Well established, has raised significant funds.
Background of Lead Team Members

Do we know who they are? Do they have LinkedIn profiles? Do they have solid, relevant backgrounds?

5.0
N/A
5 - Accomplished, recognized.
Team Assembly and Commitment

Is a solid, fully committed core team in place? Do they have online (e.g. LinkedIn) profiles showing sufficient relevant experience? Is their participation transparent?

5.0
N/A
5 - Skilled and balanced, fully committed.
Team Skill Set Relevance

Does the amount of talent and skill in each area seem to fit the project requirements?

5.0
N/A
5 - Meeting and exceeding project requirements.
Team Skill Set Balance

Is the team well-rounded (biz/tech/blockchain)? Is there sufficient talent and skill in all areas of required development?

5.0
N/A
5 - Excellent, all aspects covered.
Company and Team Score:
5.0

Token Sale

• Telegram has launched a token sale in Q1 2018, purportedly aiming to raise as much as $1.2 Billion, about half in a private presale and half in a public sale, using the SAFT structure. Updated information shows that $850 million have already been raised in the highly demanded pre-sale.
• More than 80% of the raised funds will be spent on equipment, bandwidth, colocation, and user verification costs, while the rest will be allocated to wages, offices, and legal and consulting services. This is based on Telegram’s $70 million 2017 annual budget, of which $62 million were spent on equipment, etc. Telegram states that its projected spending over the next three years is $400 million, and that a total spending of about $620 million should allow it to reach one billion active users by 1/1/2022.
• The total supply of native TON tokens (Grams) is originally limited to 5 Gigagrams (i.e., five billion Grams). 4% (200 million Grams) will be reserved for the development team with a 4-year vesting period, and 10% will be allocated to the company. During the initial stage of development, at least 52% of the entire supply will be retained by the TON Reserve, which will use the bulk of “unallocated” Grams primarily as validator stakes, giving the TON Foundation a majority of votes during the first deployment phase of the platform. The remaining 44% (2.2 billion Grams) “can” be sold in accordance with the formula p_n:= 0.1 × (1 + 10−9)^n USD, causing supply coming from the TON Reserve to always be more expensive than the exchange price. Token price in bulk pre-sale to institutional investors will depend on the vesting period and volume. Telegram is purportedly requiring a minimum investment of $20 million for large presale discounts (possibly more than 70% of the final public sale price, which is targeted at $0.97), with varying lock-up periods (that could range from 3 to 18 months depending on the discount). After the TON Blockchain is fully deployed, the annual inflation rate is projected at 2% (as mining rewards to validators accumulate).

Category Breakdown
Raise Amount Max

Is there a clear cap? Is the maximum raise amount modestly sufficient (as opposed to either greedy or insufficient)?

1.0
N/A
1 - Very greedy (e.g. uncapped).
Raise Amount Min

Is the minimum raise reasonable considering the development plan? Are there raise-amount dependent milestones?

1.0
N/A
1 - None or nonsensical.
Fund Allocation

Is fund distribution and allocation reasonable and justified?

2.0
N/A
2 - Use of funds only loosely defined.
Token Allocation

Is the ratio of tokens sold to those kept reasonable? Does it prevent the company from having too much control?

3.0
N/A
3 - Sufficient company/community interest balance.
Media Presence and Following

Is the sale being talked about in Reddit, Bitcointalk, Social Media, Medium, etc.? Is information available and accessible? Is there interest?

5.0
N/A
5 - Exceptional presence and interest, having credibility.
Token Sale Score:
2.4

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