Tether’s USDT was the most active token on Toncoin in October

Tether (USDT) transfers have emerged as the leading source of activity on Toncoin. After a brief airdrop period, the network has returned to its usual pattern of value transfers across apps and DeFi hubs. 

Tether’s USDT was the most active token on Toncoin in October. The data examined revealed that Toncoin is not actually a meme token chain. It does not only primarily carry tap-to-earn games either. It is also one of the few specially selected networks to carry native USDT with the e-commerce and advertising infrastructure that needs the liquidity. 

Native USDT is also used in addition to TON as a utility and gas fee token. 

Over time, USDT supply on Toncoin has increased to 892M, bringing more liquidity. More than 2M traders use this version of the token. 

USDT’s growth on Toncoin is just a fraction of the toke’s total supply, which is at 120.4B. Toncoin holds more volume than smaller chains and even some L2 chains. Its supply has almost caught up with Optimism (OP), which holds 973M USDT.

The success of TON was followed by the plan to launch another native stablecoin, this time tied to the dirham, the currency of the United Arab Emirates. The announcement was made during the TON Gateway event in Dubai.

The native USDT is used far more than the bridged version and the small amount of USDC that found its way into Toncoin. 

At this stage, the Toncoin network does not offer incentives or encourage the usage of any token.

October’s USDT volumes include microtransactions, with over 3.25M transfers this month. Most of the traffic comes from mini-apps, new project launches, and older tapping games.

Catizen, one of the most active Toncoin games, handled around 469K transactions. Hamster Kombat’s user count has reduced, but it retained 41M users after its airdrop incentives ran out. 

Can Toncoin survive with DeFi?

The value from stablecoins on Toncoin has been sufficient to offset the slowdown of DeFi. While the network carries more than 829M USDT, the value stored in DeFi is diminishing. 

Toncoin carries just $352M in total value locked, lagging behind even niche L2 chains. Most of the value is concentrated on TonStakers, the native staking protocol. The two main DEXs, Ston.Fi and DeDust, also take a big part of the locked liquidity. 

One of the reasons for the slide in DeFi is the slowdown of TON, the native token. The value of staked TON fell as the asset traded under $5. 

During the latest market correction, TON fell to $4.56. Until recently, TON held in a relatively predictable range, serving its purpose as a utility token and a staked asset. TON open interest has also declined gradually for the first three months, to under $200M.

The asset also has around 30% of short positions, which may make long traders vulnerable to an attack. TON may also not benefit from a short squeeze from risk-takers. The shaky performance of TON may also undermine lending protocols, which will rely more on USDT for stability. 

Farming projects undermine TON

One of the main activities on Toncoin is various forms of farming. These task-based earning mechanisms go a step beyond tapping games, and issue missions or require booster packages. Some of the missions include transactions of 0.1 TON, which add to the network’s activity. 

Over the past month, new TON creation accelerated slightly. More than 74K new TON are created each day, potentially generating selling pressure. More than 69M TON are locked in liquid staking, slightly diminishing the circulating supply of TON. The asset has a total supply of 5.11B, with no cap on the amount of tokens produced. The Toncoin inflation rate of 0.6% per year is close to that of Ethereum and is achieved through TON burns. 

Farming games like DuckChain often have native tokens, but some also offer players the chance to earn actual TON. Other farming games with missions are being launched, leading to increased transactions, but also creating the need to sell TON rewards. As a result of the newly launched farming apps, TON appears oversold to traders.