18.06.2021

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Digital Meritocracy: how enthusiasts launched Telegram Open Network without investment and IC

Digital Meritocracy: how enthusiasts launched Telegram Open Network without investment and IC

The Free TON project was created on the basis of the Telegram Open Network concept and code base after the closure of the Pavel Durov project. Its main difference is in the decentralized management based on contests.

The work on the Telegram Open Network was first announced at the end of 2017. The development was carried out with the money raised on several closed rounds of the tokenscale (about $1.8 billion in total). Officially, the Telegram team did not comment on the progress of the work — only occasionally some details were leaked to the media.

At some point, the White Paper TON hit the Internet. Together with other documentation, it was subsequently published on the website test.ton.org — the only official source of information about the project. There, the developers also placed the open source code of the TON components as they were ready. The updates continued even after the start of the trial with the US regulator SEC, which accused Telegram of selling unregistered securities on the eve of the launch of the TON network in October 2019.

The injunction against the distribution of Gram (TON tokens) and the accusations from the SEC did not allow Pavel Durov to launch the project. After several court hearings in early 2020 Pavel Durov officially announced the closure of the Telegram Open Network.

Launching Free TON

This would be the end of the history of the Telegram Open Network, and the work of hundreds of programmers, along with the unique design of the TON ecosystem, described in the project’s White Paper By Nikolai Durov, could have been lost.

An important principle that was followed in Telegram helped to avoid this. Pavel Durov understood that TON would not be able to become the leader of the crypto industry if it did not make an open and decentralized project. To do this, it was necessary to develop an active community. Therefore, even during the creation of TON, Durov’s team attracted third-party development teams. Not only did they have a good understanding of how the Telegram Open Network works, but they also contributed to the development.

These companies, using the open source code of ready-made TON components, launched the Free TON network in early May 2020. In fact, they breathed new life into the development of Pavel Durov’s team. To avoid problems with the law, they decided to abandon the legal structure, and also released a new token — Crystal instead of Gram. The technical basis of Free TON at the same time corresponded to the “classic” TON, as it was conceived by Telegram.

In total, the founders of Free TON were more than 20 different organizations. Among them was, in particular, the company TON Labs, which was responsible for creating the TON OS operating system and a number of other technical components of TON — for example, a compiler for smart contracts on Solidity and LLVM, as well as a set of tools for developers (SDK). Also on the list of founders-Broxus, Cyberway, P2P.org, Certus One, Dokia Capital, and others.

Multi-layer blockchain, sharding and staking

Telegram Open Network was conceived as a “third generation” blockchain project after Bitcoin and Ethereum with extensive scaling and decentralization capabilities. This principle was inherited by Free TON. The network consists of three parts: masterchain, workchain, and shardchain.

Masterchain — the main blockchain of the network, which stores basic data, such as the current version of the protocol and its parameters, information about validators, stakes, etc. It controls the interconnectedness and relevance of all other parts of the network. Shardchains form the “base” level. Each shardchain is a chain of blocks that stores data about user addresses. Shardchains may differ from each other in the rules of operation and parameters, but the same shardchains are combined into workchains (there may also be several of them).

Sharding is built into this multi-layer structure from the very beginning — the ability to significantly increase network performance when the load increases. The throughput of Free TON can reach a million transactions per second. Tests conducted shortly after the launch of Free TON showed the ability to increase the network performance to 10 thousand transactions per second.

Since Free TON is designed to run a large number of decentralized applications, it would be impossible to achieve this goal without an effective system of smart contracts. Almost every element in Free TON (including user wallets) is a smart contract.

Free TON is built on a kind of Proof-of-Stake algorithm (more precisely, “Byzantine Fault Tolerance”, or Byzantine Fault Tolerance) called Catchain, also invented by Nikolai Durov.

Validators are responsible for generating new blocks and verifying blockchain data in Free TON. To participate in the staking, the Crystal coins must be locked in a special smart contract. But in order to become a validator, you need to manage a node with a large amount of coins in the stake.

Therefore, DePool — smart contracts that are managed by validators and thanks to which the holder of even a small amount of Crystal can participate in the staking-work in Free TON. To earn income from staking, it is enough to send your coins to depool through a third-party service that supports Crystal staking. And recently, the staking function was added to the official wallet of the ecosystem — TON Surf.

Contests instead of ICOs

How can you develop such a complex technical product and grow the community without financial support? The answer lies in the special way of distributing Crystal tokens.

The founders of Free TON fundamentally refused to conduct an ICO or build a classic business by attracting investment. Instead, they decided to focus on the technical development of the protocol. And the community is responsible for developing applications and other components.

As an incentive for the growth of the community and the development of Free TON, the meritocratic Crystal token distribution model is used. Its essence is that 85% of the coin issue is given out as a reward to those who contribute to the development of Free TON. To receive this award, you need to become a prize-winner of one of the competitions held by the project community.

Any user can suggest an idea for the contest. He must formulate the task and the time frame for its completion, specify the criteria for winning, and offer a prize fund. The contest proposal is published on the Free TON forum, where users discuss it and, if necessary, refine it. After that, the proposal is put to the vote via the blockchain. If the project is approved, the collection of applications begins.

Control system

Contests are the main tool of the flexible Free TON management system. It consists of two levels: on the first level is the council of the founders of the project (English Governance), which solves the tasks of developing the technical infrastructure. At the second level — a large number of self-managed “working groups”, “sub-governance” (English: Sub-governance), which are united for the development of narrow areas. For example, there is a working group dedicated to creating DeFi services, a group for developers, and so on.

Each of these groups has a selected “council” of the most active users, who formulate ideas for new contests and evaluate other proposals.

Anyone can submit their work to the current competition — you only need to specify the wallet address in the application, where the award will be credited in case of victory. You can get an address in any wallet that supports Crystal tokens (we recommend using the most popular ones — TON Surf or Crystal Wallet). All works are published on the Free TON forum, on the contest page. After the end of the collection of applications, their public evaluation begins: each member of the jury gives a vote for one of the works, explaining their choice. Often there are several prizes.

Awards for winning and the role of blockchain in voting

The topics of the contests are very different. So, in October, a competition was held for a new design of the Crystal Wallet wallet-the winner of only the first place received 25,000 Crystal tokens, which is about $15,000 at the current exchange rate. And this is only the average size of the reward.

From August to September, a competition was held to create the Free TON Wiki site, which later became the official encyclopedia of the project. At the same time, developers could participate in a competition to create a set of smart contracts for atomic swaps between Free TON and other popular blockchains.

Currently, several contests are in the active phase – for example, for the creation of the NFT marketplace or the development of the Free TON wallet extension for the Google Chrome browser. You can follow the progress of the competitions and the publication of new competitions on the website of the Free TON management system.

The voting process takes place in the Free TON blockchain, that is, it is completely transparent. The evaluation of each work by a member of the jury takes place in the form of a transaction, in the description of which he also indicates the reason for his decision. The results of the voting with all the details can be viewed even after the end of the contest.

Thus, the Free TON contests do not even kill two birds with one stone, but three at once. First, they help to solve specific problems of ecosystem development. Secondly, to determine the best applicants for obtaining Crystal tokens. Third — and this is perhaps the most important — they stimulate the natural development of the project. The most worthy are determined in conditions of fair and open competition, and for their efforts they receive a worthy reward.Thanks to the meritocratic distribution of Crystal tokens, today Free TON is a blockchain ecosystem with one of the largest decentralized communities. The latest news about Free TON can be found in the project blog.