Toncoin Staking

The Open Network (TON) is a high-performance, sharded Proof-of-Stake blockchain designed for scalability to millions of transactions per second.

Key characteristics:

• Sharded architecture: TON uses dynamic sharding to parallelize transaction processing, enabling throughput that scales with network demand.
• Telegram integration: TON has deep integration with Telegram's 1B+ user base, providing unique distribution for applications and wallets built on the network.
• Low inflation: TON has one of the lowest annual inflation rates among major PoS networks, resulting in minimal dilution for non-stakers.
• Native token: Toncoin (TON) is used for transaction fees, staking, governance, and on-chain storage deposits.

More information: ton.org

TON operates on a modified Proof-of-Stake consensus known as Catchain Consensus, consisting of two layers:

Catchain Protocol (low-level): Handles data broadcasting between shardchains and the masterchain. It also detects protocol violations by validators.

Block Consensus Protocol (BCP, high-level): Achieves consensus within each validator group responsible for a specific shardchain or the masterchain.

Validator selection: Validators are elected for validation cycles. During each cycle, all elected validators split TON rewards, distributed proportionally to their stake. The network is secured by a growing set of validators with significant TON staked.

Historical note: TON's initial token distribution was conducted via a Proof-of-Work mining phase (June 2020 - June 2022), but the blockchain itself has always operated on Proof-of-Stake consensus. The Catchain system provides BFT-level security with deterministic finality.

TON has no hard supply cap; ongoing inflation from validator rewards adds to supply. The annual inflation rate is among the lowest of major PoS networks.

Key tokenomics features:

• Low inflation: New TON is created during the validation process and distributed to validators.
• Fee structure: Transaction fees include gas fees paid to validators, proportionally distributed based on stake.
• No pre-mine advantage: TON's initial distribution occurred through a Proof-of-Work mining phase, providing broader initial distribution compared to typical VC-funded token launches.

Institutional consideration: TON's low inflation rate means staking yield is primarily derived from transaction fees and a small inflation component, making the real (inflation-adjusted) yield relatively attractive compared to higher-inflation PoS networks.

TON staking can be accessed through native staking (direct validator delegation) or liquid staking protocols. For most institutional allocators, liquid staking offers operational simplicity.

Liquid staking via Tonstakers (most accessible):

Step 1: Ensure you have at least 1 TON in your wallet.

Step 2: Go to app.tonstakers.com and connect your wallet.

Step 3: Enter the amount of TON to stake.

Step 4: Click "Stake" and sign the transaction. You receive tsTON, a liquid staking receipt token.

Native staking: Running a validator requires a minimum self-stake of approximately 300,000+ TON and dedicated technical infrastructure. Nomination pools allow participation with lower minimums (typically 10,000+ TON). Native staking is suitable for institutions with dedicated staking operations.

Institutional providers: Major staking infrastructure providers including Chorus One, Everstake, and Kiln offer institutional-grade TON staking with custodial integration, SLA guarantees, and compliance features.

View the detailed TON staking tutorial.

Stakers earn through the following sources:

Gas fees: Users include additional Toncoin in transactions as gas fees, which are distributed proportionally among validators elected for each validation cycle based on their stake.

Inflation (block rewards): During validation, new TON is created and distributed to validators. This contributes a low annual inflation rate to the total supply.

Current yield: Use the TON Staking Calculator to check current staking APR. Liquid staking protocols may offer slightly higher effective yields due to compounding effects.

Yield dynamics: As the total amount of staked TON increases, per-token rewards decrease. Conversely, higher network transaction volume increases fee-based rewards.

Explore return scenarios on the TON Staking Calculator.

TON Liquid Staking (LSt) enables TON holders to participate in validation without operating infrastructure or meeting high minimum stake requirements.

How it works:

• Pooling: Stakers deposit TON into pools managed by smart contracts. The pooled funds are delegated to validators for network validation.
• Receipt tokens: Depositors receive liquid staking Jettons (e.g., tsTON) representing their pool share. These tokens accrue value as the pool earns validation rewards.
• Redemption: Users can exchange their Jettons back to TON at any time, receiving their original deposit plus accumulated rewards.

Tonstakers market position: Tonstakers is the dominant TON liquid staking protocol by TVL.

Institutional advantages of liquid staking:

• No minimum stake requirement (1 TON minimum vs. 10,000+ for native staking)
• No infrastructure management
• Liquid receipt tokens can be used in DeFi for additional yield
• Automatic reward compounding through exchange rate appreciation

Risk factors for TON staking:

Slashing risk: TON validators can be penalized for failing to participate in block creation and transaction signing during a validation round. The standard fine is 101 TON per infraction. Liquid staking protocols like Tonstakers maintain 99.9% uptime, making slashing events rare for well-operated infrastructure.

Unbonding period: TON has a short unstaking period of approximately 18-36 hours, aligned with the network's validation cycle structure. This is significantly shorter than most major PoS networks, reducing liquidity risk.

Smart contract risk (for liquid staking): Liquid staking protocols introduce smart contract risk. Evaluate audit history, code maturity, and total value locked when selecting a liquid staking provider.

Protocol security risk: Inherent risk of undiscovered bugs in the TON blockchain protocol. This applies broadly to the network, not only to staking.

Validator concentration risk: TON's validator set is smaller than some other major PoS networks. Monitor decentralization metrics and avoid over-concentration in any single validator or staking pool.

This is not an exhaustive list. Conduct due diligence aligned with your institutional risk framework.

Maintenance requirements depend on the staking method:

Liquid staking (via Tonstakers or similar):

• Minimal maintenance required. The protocol manages validator selection, infrastructure, and reward compounding.
• Rewards accrue automatically through the appreciation of your receipt token (e.g., tsTON) exchange rate.
• Periodically review the liquid staking provider's operational status, audit reports, and TVL trends.

Native staking (direct delegation):

• Monitor validator performance and uptime during each validation cycle.
• Rewards are distributed per validation cycle and may require manual compounding depending on the staking tool used.

Unstaking: To convert liquid staking tokens back to TON, use the unstaking interface (e.g., app.tonstakers.com/unstake). You will receive your deposited TON plus accumulated rewards after the short unstaking period.

Institutions should note that liquid staking through established providers -- particularly those certified through the VSP Program -- minimizes ongoing operational requirements.