Telegram Open Network (TON) is shaking things up Focusing specifically on the NFT space. We’re reading headlines celebrating the triumph of heavy transaction volumes that already match and in some cases surpass Ethereum and Solana. Pavel Durov is celebrating. Before you go all in on TON, let’s put the brakes on and analyze the data. Beneath the surface of this amazing success story, some very disturbing trends are beginning to surface. These commonsense changes would benefit creators and help protect the whole ecosystem from needless destabilization.

Are Creators Really Cashing In?

Here's the million-dollar question: is this NFT boom actually benefiting the artists and creators who are supposed to be at the heart of it? Or are we simply pumping up another speculative bubble that fills the coffers of platforms and sophisticated traders but leaves creators in the dust?

The data paints a concerning picture. Indeed, even though TON can be proud of massive transaction volumes, the royalty mechanisms are shrouded in secrecy at worst. On Ethereum, royalty enforcement is typically built into the smart contracts. By comparison, TON’s approach appears to rely almost entirely on the honesty of various marketplaces. Let’s be real—good faith is frequently lacking in the Wild West of crypto.

Consider this: if off-chain trading volume dwarfs on-chain volume, as the data suggests, how are royalties being tracked and distributed? Are creators getting their due from each transaction or only the ones that occur on-chain. We need transparency. We need verifiable data. To arrive at good, competitive marketplaces, we’ll need them to commit to enforceable royalty standards. If they fail to, this newest boom could quickly become a bust for the very people it was designed to empower.

Think of it like this: it's like streaming music. Imagine that Spotify only pays an artist once the first time someone listens to their song. From then on, artists are paid nothing for streams anywhere else. Outrageous, right? And that’s possibly exactly what’s going on here, and that’s a recipe for disaster.

Manipulated Markets or Organic Growth?

The “more expensive, more popular” moving pattern we saw with Plush Pepes on Getgems is fascinating. It raises red flags. So, is this real demand we’re looking at, or are we just witnessing the classic signs of wash trading? Wash trading is when traders markedly inflate an asset’s trading volume by buying and selling an asset back and forth to themselves. It's a classic market manipulation tactic, and it's surprisingly easy to execute in the relatively unregulated world of NFTs.

Let's look at the numbers. So, can we trace patterns of repetitive trade between the same addresses? But are there huge increases in trading volume immediately followed by massive price runs that do so without any fundamental underlying value? Those are the questions we should all be asking, and the data we should all be analyzing.

As a result, the emergence of TONNEL, an off-chain marketplace, that has now outperformed OpenSea in daily trading volume is certainly both fascinating and alarming. While it demonstrates robust proliferation among Telegram users, it poses a monumental risk. Off-chain transactions are simply more difficult to track, which would allow wash trading, among other types of manipulation, to be more easily hidden. This is largely due to the “cooling-off period” that creates price arbitrage between the on-chain and off-chain markets. This can create very profitable arbitrage opportunities, but it can cheat unwitting consumers.

Think about it like the stock market, but even less regulated and controlled. Imagine if you could trade stocks in a dark pool, completely hidden from public view, and then manipulate the price on the main exchange. That’s pretty much the same thing that’s going on with TON NFTs, and it’s a time bomb.

Practical Use Cases Solve All Problems?

The story behind TON’s NFT renaissance usually focuses on “real world use cases” such as Telegram “gifts” and the MapleStory Chain MMORPG. The theory is that these use cases are powering real adoption, pushing NFTs past the speculation bubble. And there's some truth to that. NFTs can be more than just JPEGs.

Let's not be naive. Just because something has a “practical use case” doesn’t exempt it from bad actors looking to manipulate or exploit it. After all, a hammer is an effective tool to build houses, but in the wrong hands it could be used as a weapon. The same applies to NFTs.

The use of Telegram “stars” as currency for primary market purchases is yet another potential red flag. How are these "stars" valued? Are they subject to inflation or deflation? What does this new system mean for the creators making earnings? We require more transparency and more data. Only then can we honestly say that these “practical use cases” are in fact good for the ecosystem at large.

Here's the cold, hard truth: NFTs are evolving beyond the hype, but they are not evolving beyond the need for regulation and oversight. Just because TON NFTs are being used in a newly “practical” way it doesn’t mean we can overlook the potential risks.

TON’s NFT boom is certainly an exhilarating time, but it’s a bit dangerous. We deserve more complete data, more transparency on who is conducting these inspections, and a real discussion about how we enforce these royalties. Without these, this boom threatens to turn into yet another cautionary tale in the hyperbolic crypto cosmos. The potential is indeed there, but potential alone isn’t worth anything. We can’t protect creators if we sell them out. It’s time to stop cherry-picking markets and invest in an equitable environment, one that lifts up all players—large and small.

TON's NFT boom is exciting, but it's also fraught with peril. We need better data, greater transparency, and a serious conversation about royalty enforcement. Without these things, this boom risks becoming another cautionary tale in the volatile world of crypto. The potential is there, but potential alone isn't enough. We need to protect creators, ensure fair markets, and build a sustainable ecosystem that benefits everyone, not just a select few.