TON blockchain freezes $2.6B worth of inactive tokens

Miners’ wallets were suspended for four years if they have been inactive with no outgoing transactions.

According to the results of a community vote on Feb. 22, users and validators of The Open Network (TON), a layer-1 blockchain previously created by Telegram, have voted to suspend miners’ wallets for four years if they are inactive and have never made an outgoing transaction. The decision resulted in 1,081,389,416 Toncoin (TON) being suspended, worth an estimated $2.58 billion at the time of publication and accounting for over 20% of TON tokens outstanding.

The validator vote, which began on Feb. 21, 2023, was passed after the first two rounds without requiring a third tie-breaker round. The TON Foundation requested miners to show their activity by undertaking a transaction on the TON blockchain on Dec. 17, 2022. Since that announcement, 24 of the 195 inactive addresses have been activated. As a result, the vote concerned the remaining 171 addresses, or less than 0.009% of the total number of wallets on the network, holding a total of 1,081,389,416 TON. The addresses will be suspended for a period of four years following today’s vote.

As told by developers, the distribution of TON began in July 2020, when 98.55% of the total supply became available for mining for anyone to participate. Placed in special “Giver” smart contracts, the approach allowed TON to benefit from the decentralization offered by proof-of-work while remaining a proof-of-stake blockchain. By suspending these wallets, developers say it would lead to greater clarity regarding the volume of TON currently circulating and “that the active community participating in the open-source project will continue to grow and thrive.”

TON’s tokenomics optimization

On Feb. 21, on @ton_blockchain the validators will vote on a proposal to optimize tokenomics. If the proposal is accepted, the circulating supply of Toncoin will be reduced by ~20% by freezing it for the next 48 months and then unfreezing it. pic.twitter.com/MXwWjt7YAZ

— Tonstarter (@ton_starter) February 20, 2023

The TON community has long speculated that access to these inactive wallets may have been lost. Some say that the existence of unutilized TON only increases the uncertainty for network participants. TON is used as a gas fee required to obtain access to decentralized services on the TON network. Approximately three years prior, Telegram abandoned development on TON after the United States Securities and Exchange Commission accused the firm of breaching security laws with regards to a $1.7-billion initial coin offering in 2018. The project has since been turned to community developers.