{ "openapi": "3.0.0", "info": { "description": "OpenAPI specification for the entire Messari API", "title": "Messari API - Research V1", "version": "1.0.0" }, "servers": [ { "description": "Messari API", "url": "https://api.messari.io" } ], "security": [], "paths": { "/research-basic/v1/basic/reports": { "get": { "description": "Returns a list of basic research reports based on filters like asset ID and tags", "operationId": "getBasicResearchReports", "parameters": [ { "in": "query", "name": "limit", "description": "Limit must be less than or equal to 1000", "schema": { "format": "int64", "type": "integer", "default": 10 } }, { "in": "query", "name": "page", "schema": { "format": "int64", "type": "integer", "default": 0 } }, { "in": "query", "name": "assetId", "description": "Example: `4515ba15-2719-4183-b0ca-b9255d55b67e`", "schema": { "format": "byte", "type": "string" } }, { "in": "query", "name": "tags", "description": "Example: `stablecoins`, `defi`", "schema": { "items": { "type": "string" }, "type": "array" } }, { "in": "query", "name": "includeContent", "description": "Whether to include full report content in the response", "schema": { "type": "boolean", "default": false } } ], "responses": { "200": { "content": { "application/json": { "schema": { "properties": { "data": { "items": { "$ref": "#/components/schemas/ResearchReport" }, "type": "array" }, "error": { "type": "string" }, "metadata": { "$ref": "#/components/schemas/Pagination" } }, "required": [ "data" ], "type": "object" }, "example": { "error": null, "data": [ { "id": "16d6619b-9416-46cc-8fd2-13fdcd9bae2b", "createdAt": "2026-04-06T23:37:35Z", "updatedAt": "2026-04-07T16:00:58Z", "assetIds": [ "2023433a-23f4-4901-822d-a537b0c71676" ], "assets": [ { "id": "2023433a-23f4-4901-822d-a537b0c71676", "name": "Toncoin", "symbol": "TON", "slug": "the-open-network" } ], "authors": [ { "id": "872be9a6-e5d6-47c4-ac6d-95bb1720adf9", "name": "Whynonah", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/8ac8076d5648490dd40511ab3b81c602a03be811-681x793.jpg?w=100", "linkedinUrl": "" }, { "id": "2b10859c-dd75-472e-afde-1d1df4d2f576", "name": "Jonny Kreiser", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/5f0238a98921e3b37e6b3034ebe88c6561fd393c-400x400.jpg?w=100", "linkedinUrl": "" } ], "content": "## **Key Insights**\n\n* **Toncoin (TON) functions as the network\u2019s core execution asset (i.e., paying gas, supporting DeFi liquidity, securing Proof-of-Stake consensus, and acting as a settlement layer)** and as the foundation of Telegram's in-app economy.\n* **2025 activity shows TON shifting from early-year viral surges into a steadier baseline** (~100K\u2013150K daily active users and ~1.5\u20132.5 million daily transactions).\n* **TON\u2019s ecosystem** is evolving into a Telegram-native financial stack, with stablecoins, yield products, and RWAs increasingly embedded in wallets and mini-apps; **highlighted by xStocks, Ethena, Tether, Affluent, and liquidity routing via STON.fi + Omniston.**\n* **TON's 2026 roadmap pivots from infrastructure refactoring to performance and developer accessibility**. Catchain 2.0 targets sub-second finality, the Rust Node reimplements the validator stack, and a unified developer layer that includes developer kits for smart contracts, apps, wallets and payments.\n* **TON is emerging as a native infrastructure layer for AI** inside Telegram, with Cocoon providing decentralized compute, AgentKit connecting autonomous agents to onchain actions, and vibe-coding workflows enabling builders to quickly generate and share working prototypes.\n\n## **Introduction**\n\nConsumer crypto adoption typically breaks down into two bottlenecks: distribution and cost/latency. Most blockchains rely on standalone wallets and browser-based dApps, creating multi-step onboarding funnels that deter mainstream users. Even when infrastructure works, blockchain interactions often feel slow, expensive, or fragmented compared to Web2 applications; particularly in consumer use cases like payments, gaming, and social applications, where users expect instant feedback and low friction.\n\nTON\u2019s thesis is that mass adoption requires both scalable infrastructure and native distribution. At the base layer, TON is built as a dynamically sharded Proof-of-Stake (PoS) network with asynchronous smart contracts, allowing parallel execution and horizontal scalability. Rather than relying solely on high single-chain throughput, TON\u2019s architecture is designed to maintain stable performance under load. Complementing the Layer-1 are native protocol services, including (i) [TON DNS](https://dns.ton.org/) (human-readable \u201c.ton\u201d names), (ii) [TON Storage](https://docs.ton.org/foundations/services#ton-storage) (decentralized file storage), (iii) [TON Payments](https://docs.ton.org/foundations/services#ton-payments) (payment channels), (iv) [TON Proxy](https://docs.ton.org/foundations/services#ton-proxy) (censorship-resistant routing), (v) [TON Sites ](https://ton.org/en/ton-sites)(decentralized websites), and (vi) [Tolk](https://docs.ton.org/languages/tolk/overview#tolk-language) (smart contract language), and (vii) [AppKit](https://docs.ton.org/ecosystem/appkit/overview) (an all-in-one SDK for building Telegram Mini Apps with TON), which together form a vertically integrated blockchain stack with easy developer tooling.\n\nWhat differentiates TON is its distribution and tight integration with [Telegram](https://telegram.org/). [**TON Wallet**](https://wallet.tg/ton), natively embedded in the messenger, allows users to transact onchain without leaving the app. [**TON Connect**](https://docs.ton.org/ecosystem/ton-connect/overview), the wallet-connection protocol for **Telegram Mini Apps (TMAs)**, opens this to any compatible third-party wallet, though TON Wallet remains unique as Telegram's built-in wallet. Combined with in-chat app distribution, the result is onchain actions that feel like normal in-app behaviour, collapsing the traditional crypto UX stack into a single consumer environment.\n\n[Website](https://ton.org/en) / [X (Twitter)](https://x.com/ton_blockchain) / [LinkedIn](https://www.linkedin.com/company/ton-blockchain)\n\n\n\n## **Background**\n\nTON was founded in 2018 as the \u201cTelegram Open Network\u201d by Telegram co-founders [Pavel Durov ](https://x.com/durov?lang=en)and [Nikolai Durov](https://x.com/Kolja_Durov?lang=en), and raised $1.7 billion across two private token sales in February\u2013March 2018 to fund development. In October 2019, [the](https://aurum.law/newsroom/telegram-ton-1-7-bill-raise-sec-decentralization-the-legal-tale-and-insights) U.S. Securities and Exchange Commission (SEC) filed an emergency action against Telegram alleging an unregistered token offering, and Telegram ultimately ceased active involvement in May 2020. Development continued through the community-led \u201cNewton\u201d effort initiated by [Anatoliy Makosov](https://x.com/anatoly_makosov) and Kirill Emelyanenko, and in May 2021, the community voted to formalize governance under the TON Foundation and promote the V2 testnet into TON Mainnet.\n\nFollowing the community relaunch, TON attracted additional strategic and private investment. Since 2022, TON has [completed](https://messari.io/project/the-open-network/fundraising/funding) eight additional funding rounds, with at least three publicly disclosed raises totaling $50 million ($10 million from [DWF Labs](https://messari.io/organization/dwf-labs) in 2022, $30 million in a private sale backed by Foresight Ventures and Bitget in 2024, and $10 million in a strategic investment from [Gate](https://messari.io/organization/gate-io) in 2024).\n\nSince 2022, TON has attracted significant institutional backing. In [March 2025](https://www.tradingview.com/news/cointelegraph:d27a07a06094b:0-venture-capital-firms-invest-400m-in-ton-blockchain/), the TON Foundation disclosed that a group of investors, including Sequoia Capital, Pantera Capital, and Ribbit Capital, collectively purchased over $400 million in Toncoin. Combined with earlier rounds and subsequent investments from Coinbase Ventures, Pantera Capital, and others, publicly confirmed capital inflows exceed $550 million. Later in [August 2025](https://cryptoslate.com/verb-secures-558m-to-become-first-ton-treasury-vehicle-plans-ton-strategy-rebrand/), two publicly traded Toncoin treasury vehicles, [TON Strategy Co.](https://cryptoslate.com/verb-secures-558m-to-become-first-ton-treasury-vehicle-plans-ton-strategy-rebrand/) and [AlphaTON Capital](https://decrypt.co/news-explorer?pinned=1150165&title=portage-biotech-rebrands-as-alphaton-capital-corp-invests-100m-in-ton-digital-asset-treasury), have also launched, modeled on MicroStrategy's BTC accumulation strategy.\n\nIn [March 2025](https://www.tradingview.com/news/cointelegraph:d27a07a06094b:0-venture-capital-firms-invest-400m-in-ton-blockchain/), TON Foundation disclosed that a group of investors - including Sequoia Capital, Ribbit Capital, Benchmark, Draper Associates, Kingsway Capital, Vy Capital, Libertus Capital, CoinFund, SkyBridge, Hypersphere, and Karatage - collectively purchased and held $400 million in Toncoin. Pantera Capital, which has called Toncoin its largest single investment to date, reportedly deployed over $100 million. In [August 2025](https://www.theblock.co/post/366414/coinbase-ventures-buys-ton-tokens-directly-from-telegram-says-ton-foundation-exec), Coinbase Ventures purchased Toncoin directly from Telegram as a long-term venture position. In total, publicly confirmed capital inflows into TON exceed $550 million since 2022 across at least ten discrete investment events.\n\nA later turning point came through renewed alignment with Telegram distribution. In September 2023, the TON Foundation [announced](https://wublock.substack.com/p/ton-ecosystem-overview-deep-integration) a partnership with Telegram, aiming to integrate and promote the TON ecosystem for Telegram\u2019s userbase. Thanks to this partnership, Telegram natively integrated a crypto wallet known as @Wallet, supported TON Sites in an in-app browser, and issued Fragment collections (usernames, collectable numbers, and gifts) on TON.\n\nA later turning point came through renewed alignment with Telegram distribution. In January 2025, TON [became](https://www.prnewswire.com/news-releases/ton-foundation-expands-partnership-with-telegram-as-ton-becomes-the-exclusive-blockchain-for-telegrams-mini-app-platform-302356251.html#:~:text=Jan%2021%2C%202025%2C%2010:,950%20million%20monthly%20active%20users.) the exclusive blockchain infrastructure for Telegram\u2019s Mini App platform, with TON Connect positioned as the standard wallet connection method and Toncoin (TON) serving as the exclusive cryptocurrency for non-fiat payments across Telegram services (e.g., Stars, Premium, Ads). This shifted TON to a technically differentiated L1 focused on consumer distribution, with Telegram serving as its primary onboarding and application surface.\n\nToday, TON is maintained through a foundation and open-source contributors, so leadership is best understood through its public-facing executives and operating entities rather than a single corporate team. Makosov and Emelyanenko are cited as founding/core members of the TON Foundation. [Steve Yun](https://www.linkedin.com/in/steve-yun/) served as President of the TON Foundation Council and later launched the $100 million ecosystem venture fund, [TVM Ventures](https://www.linkedin.com/company/tvm-ventures/), in February 2025, while remaining on the board. [Maximilian Crown](https://www.linkedin.com/in/maxcrown/) was appointed CEO in April 2025 and later President in August 2025, with prior experience as a [MoonPay](https://www.moonpay.com/) co-founder (CFO/COO).\n\n\n\n## **Technology**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/972584fb3a7b024c29dea31c96fd5ba87c03268a-1600x867.jpg?w=800)\n\nTON\u2019s architecture is commonly described as a \u201cblockchain of blockchains.\u201d Instead of relying on a single monolithic chain, TON is built as a hierarchical system in which a top-level chain coordinates with multiple parallel chains, which can be further subdivided. This structure is designed to enable scalability at the consumer scale while maintaining interoperability and shared security. At a high level, TON consists of three core components: (i) the masterchain, (ii) the workchains, and (iii) the shardchains, which are explained below in more detail.\n\n### **Architecture**\n\n#### **Masterchain**\n\nThe masterchain is the top-level coordinating chain. It does not process regular user transactions. Instead, it maintains critical network state, including (i) network configuration parameters, (ii) the validator set and their stakes, and (iii) references to the latest finalized blocks of all workchains and shardchains. In simple terms, the masterchain acts as the global source of truth for the TON network, ensuring consistency and finality across all parallel chains.\n\n#### **Workchains**\n\nWorkchains operate in parallel under the coordination of the masterchain. Each workchain can, in theory, define its own rules (e.g., virtual machine, token standards, or execution logic) while remaining interoperable within the TON ecosystem. The architecture theoretically supports up to 2\u00b3\u00b2 workchains, though in practice, only the base workchain is currently active in most production contexts. The workchain layer enables long-term flexibility, allowing TON to support specialized environments without fragmenting security.\n\n#### **Shardchains**\n\nFrom there, each workchain can be split into shardchains, i.e., smaller partitions of the network state. Sharding allows transactions and smart contract execution to be processed in parallel across multiple shards rather than sequentially on a single chain. TON\u2019s design theoretically supports up to 2\u2076\u2070 shardchains per workchain, although the network dynamically creates and merges shards as needed. The defining feature of TON\u2019s scalability model is dynamic sharding. Rather than permanently fixing the number of shards, shardchains split automatically under high load to increase processing capacity and merge when activity declines, reducing unnecessary overhead. This allows network capacity to expand or contract in response to real-time demand. The goal is to maintain stable performance and predictable transaction times even as user activity scales to consumer levels.\n\n#### **Consensus**\n\nTON uses a Proof-of-Stake (PoS) consensus model. Validators are selected based on the amount of TON staked and participate in block production and validation. Consensus is achieved using a Byzantine Fault Tolerant (BFT) protocol called Catchain, which is specifically designed to operate efficiently in a sharded environment. Catchain enables validators to coordinate across shards while preserving security and finality guarantees.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/bcd958d7d07d39294a656df30a0fa6bf9d9b60ff-1600x872.jpg?w=800)\n\nTON Core is [releasing Catchain 2.0](https://t.me/toncore/99), a consensus upgrade targeting sub-second finality to bring the onchain experience closer to Web2 responsiveness. The upgrade reduces block intervals from ~2.5s to 200\u2013400ms, delivers roughly 2.5\u20135x throughput improvement, and cuts finalization lag from ~10s to ~1s.\n\nDevelopment is complete: the testnet, updated on January 23, 2026, has been running stably at ~450ms block intervals with ~1\u20132s finalization. Mainnet validators were updated on February 12, 2026 with the Catchain 2.0 code and accelerated network layer, though activation remains dormant pending final testnet validation.\n\n### **Validators**\n\nWithin the above architecture, there are two primary roles: (i) Validator and (ii) Nominators.\n\nValidators [secure](https://ton.org/en/validators) TON\u2019s PoS network by staking Toncoin to participate in block production and validating transactions across shardchains. Operators must run high-performance, highly available infrastructure and stake a minimum of 300,000 TON to enter validator elections, though winning typically requires ~700,000 TON or more, depending on competition and the cycle's validator cap. Validators stake for a fixed validation term, with stake and rewards returned after the round completes.\n\nValidators [earn rewards](https://docs.ton.org/v3/documentation/nodes/validation/staking-incentives) from (i) transaction fee surpluses (users attach small extra Toncoin amounts as validator incentives) and (ii) newly issued Toncoin with proportional distribution based on stake weight. Validators can be [penalized](https://docs.ton.org/v3/documentation/smart-contracts/contracts-specs/governance) in two ways: (i) idle behavior: If a validator fails to participate in block creation or transaction signing during a validation round, it may be fined; and (ii) malicious misbehavior, where any network participant can submit a complaint with cryptographic proof to the [Elector contract](https://docs.ton.org/v3/documentation/smart-contracts/contracts-specs/governance). Validators vote on the complaint, and if 66.0% of validators approve, a slashing penalty is deducted from the validator's stake. To receive rewards, a validator must successfully (i) win election into a validation cycle, and (ii) validate blocks throughout the entire cycle without being penalized.\n\n[Nominators](https://docs.ton.org/v3/documentation/smart-contracts/contracts-specs/nominator-pool), on the other hand, (i) delegate TON to validators, and (ii) share in staking rewards. They do not operate the infrastructure directly. The cited minimum delegation amount is ~10,000 TON. Nominators increase validator stake weight and help decentralize participation in consensus.\n\nBeyond direct nomination, [pooled staking](https://docs.ton.org/ecosystem/staking/overview) services such as TON Whales, Kiln, ChorusOne, and P2P aggregate smaller stakes to meet validator thresholds. Alternatively, [liquid staking](https://docs.ton.org/ecosystem/staking/overview) protocols (Tonstakers, KTON, bemo, Hipo) issue transferable receipt tokens that let holders earn staking rewards while keeping capital liquid across DeFi.\n\n### **AI**\n\nTelegram is emerging as a native interface for AI agents, with TON positioning itself as the settlement and infrastructure layer for this convergence.\n\n[Cocoon](https://cocoon.org/) (Confidential Compute Open Network) is a decentralized AI compute network built on TON, [announced](https://x.com/durov/status/1995208789600182391?lang=en) by Pavel Durov at Blockchain Life 2025 and launched on mainnet in December 2025. GPU owners contribute computing power and earn Toncoin, while user data remains encrypted throughout execution via Trusted Execution Environments (TEEs). Telegram already routes lightweight AI operations through Cocoon, including message translation and summarization, with heavier workloads such as media processing and conversational assistants planned next. With Telegram's 1B+ user base as built-in distribution and Telegram\u2019s recent efforts to simplify the creation of [agentic products](https://telegram.org/blog/ai-editor-mighty-polls-and-more), Cocoon represents one of the most significant real-world deployments of decentralized AI compute to date.\n\nTelegram's bot infrastructure has also evolved toward AI-native use cases. In early 2026, Telegram shipped [streaming responses for bots](https://t.me/BotNews/113) (purpose-built for AI assistants) and threaded conversations for multi-topic chats. Third-party traction reinforces the direction: OpenClaw, the most popular self-hosted AI assistant framework, defaults to Telegram as its messaging layer. Additionally, a [Telegram developer](https://x.com/steipete/status/2037197024081195188) became its new maintainer. [BotFather](https://identityhub.app/blog/telegram-default-ai-interface), Telegram's built-in tool for creating and configuring bots, reached 7.3M monthly active users (MAUs) by early 2026, more than doubling from 3.5 million in January 2025. Combined with native Toncoin withdrawal support for bot earnings, these updates tighten the economic link between Telegram's bot ecosystem and the TON network.\n\nTON's deeper integration with onchain AI agents remains at an earlier stage. To accelerate development, TON Foundation is running dedicated [AI contests](https://identityhub.app/contests) to bootstrap tooling and adoption.\n\n## **Putting It All Together**\n\nThe components described above (i.e., masterchain coordination, dynamic shardchains, asynchronous smart contracts, TVM execution, cell-based data storage, and hypercube routing) operate within a broader multi-layer architecture designed for consumer-scale usage inside Telegram. Rather than functioning as a single monolithic execution engine, TON operates as an interconnected system composed of: (i) User Interface Layer, (ii) Application Layer, (iii) Execution Layer, (iv) Routing & Sharding Layer, (v) Consensus Layer, (vi) Validator Infrastructure Layer, (vii) Indexing & API Layer, (viii) Storage & Data Layer. Together, these layers allow TON to support real-time financial interactions embedded directly inside Telegram\u2019s social graph.\n\nFor example, consider a user sending USDT to a friend inside Telegram:\n\n* The transaction begins inside the Wallet in Telegram. The user enters an amount and taps send. The experience feels identical to sending a message.\n* The wallet constructs a Jetton (TEP-74) transfer transaction. Because TON uses an asynchronous model, a message is sent to the sender\u2019s USDT contract, which then sends a follow-up message to the recipient\u2019s wallet contract.\n* The TON Virtual Machine executes the smart contract logic:\n * Validates balances\n * Deducts TON for gas\n * Updates Jetton balances\n * Emits internal messages\n * Each contract runs independently\n* If the sender and receiver reside on different shardchains, the message is routed using Hypercube Routing. Rather than broadcasting globally, the system calculates the shortest path between shards, minimizing latency.\n* If network load increases, shardchains may automatically split to distribute execution load. This is TON\u2019s \u201cinfinite sharding\u201d in action.\n* Validators on the relevant shardchain produce and validate the block. The masterchain later finalizes shard references to ensure global consistency.\n* Collators assemble transactions while validators confirm them, enabling parallelization and improved stability.\n* Toncenter APIs and indexers immediately update transaction status. Wallets can display \u201cpending\u201d and then a confirmed state using trace APIs and action parsing.\n* All state changes are stored in TON\u2019s cell-based structure and packaged into a Bag-of-Cells (BoC), ensuring compact storage and verifiable hash-linked data.\n\nTo the user, this entire multichain, asynchronous, routed, validated process appears as a simple chat-based transfer.\n\n\n\n## **Toncoin (TON Token)**\n\n### **Token Functions**\n\nAs the project\u2019s documentation outlines, Toncoin is a native coin of the TON blockchain. It serves several key functions within the network, including:\n\n* **Paying for network execution:** Toncoin is required to execute transactions (e.g., asset transfers and swaps), with fees paid in Toncoin and designed to remain low for consumer-scale usage.\n* **Securing the network:** Validators stake Toncoin to participate in PoS consensus and earn rewards, with penalties for downtime or misbehavior. Nominators can delegate Toncoin to share in validator staking rewards.\n* **Telegram in-app economy:** Telegram uses TON as its blockchain layer for ownership, transfers, and payouts. Toncoin serves as the payment rail for collectible usernames, SIM-less phone numbers, and collectible gifts - all of which are onchain assets. Creator earnings from ads and in-app purchases (for channel authors, bot developers, and mini-app owners) are withdrawn exclusively via **Fragment.com** in Toncoin. Toncoin is also the currency for purchasing ads on the **Telegram Ads** platform.\n* **Storage of blockchain data:** Toncoin is required to maintain smart contracts onchain, where validators charge storage rent proportional to the data held. For larger files, TON Storage provides a decentralized persistence layer where storage providers are paid in Toncoin and must cryptographically prove file integrity to claim rewards.\n\n### **Tokenomics**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/b2151ab671ef344c39124f5876bbcaaa1af85962-1600x868.jpg?w=800)\n\nThe initial TON supply of 5 billion tokens was placed into [20](https://ton.org/en/mining) Proof-of-Work Giver smart contracts and mined permissionlessly between July 2020 and June 2022. Since the PoS transition (June 28, 2022), new TON is minted via validator block rewards (~0.5\u20130.7% annually). The current total supply is ~5.16 billion TON. At [$1.33](https://www.coingecko.com/en/coins/toncoin) (Mar. 26, 2026), this implies a fully diluted valuation (FDV) of ~$6.9 billion. Note: TON has no max supply cap.\n\nThe pie chart above depicts the current supply distribution of ~5.15 billion Toncoin as of March 2026, broken into 14 categories. For simplicity, these can be grouped into four macro buckets:\n\n* **Freely Circulating:** ~48% (~2.46B TON). Includes Regular Wallets, Staking (Elector), Centralized Exchanges, CEX Custodial, DeFi, Smart Contracts & Others, Uninit Wallets, TON Ecosystem Reserve, TON Foundation, and Other Labeled.\n* **TON Believers Fund:** 25% (~1.32B TON). A voluntary lockup where existing holders deposited tokens into a [Locker smart contract](https://github.com/ton-blockchain/locker-contract) (Jul\u2013Oct 2023). Now vesting in 36 monthly installments (~36.6M TON/month) through Oct 2028. As of March 2026, 6 of 36 periods have been completed; actual claim rates have been low, with only a fraction of unlocked tokens withdrawn so far. [Onchain data.](https://tonviewer.com/UQDtFpEwcFAEcRe5mLVh2N6C0x-_hJEM7W61_JLnSF74p9dz)\n* **Frozen Inactive Miners:** 20.9% (~1.08B TON). 171 addresses that mined TON during the PoW phase but never transacted. [Frozen by community governance vote](https://blockworks.co/news/ton-governance-votes-to-freeze-20-of-its-ton-supply) (Feb 2023) for 48 months. After expiration (~Feb 2027), owners must manually activate, and many keys are likely lost. The community could vote to extend the freeze or burn these tokens before expiration, though no formal proposal has surfaced as of this writing. [Address list.](https://tontech.io/stats/#/early-miners)\n* **Telegram:** ~6% (~327M TON). Tokens held by Telegram, plus ~21M in vesting contracts deployed to team members and partners (1,440-day vesting, 360-day cliff). Sell pressure from vesting recipients has been negligible thus far.\n\n### **Token Vesting**\n\n[Unlock schedules](https://defillama.com/unlocks/ton) for the parties mentioned above include:\n\n* **IPoW Mining (Premine):** Fully mined and distributed. The original ~5B TON was mined from [20 Giver contracts](https://ton.org/en/mining) between July 6, 2020, and June 28, 2022. Mining was permissionless with a variable rate based on PoW difficulty, not a linear release schedule. No further unlocks.\n* **TON Believers Fund:** Unlocks through 36 fixed monthly releases of ~36.59 million TON/month (~2.8% of the fund). As of March 2026, 6 of 36 periods have been completed; 30 periods remain (~1.098 billion TON still to unlock through ~Oct. 2028).\n* **Frozen Inactive Miners:** The 48-month [freeze](https://blockworks.co/news/ton-governance-votes-to-freeze-20-of-its-ton-supply) on 171 addresses (~1.081 billion TON) expires around Feb. 2027. This does not mean tokens enter circulation: these wallets have never transacted, owners must manually activate them, and many keys are likely permanently lost. The TON community could also vote to extend the freeze or burn these tokens before expiration. [Address list.](https://tontech.io/stats/#/early-miners)\n* **[Vesting contracts](https://github.com/ton-blockchain/vesting-contract):** Use a 1,440-day schedule with a 360-day cliff. Most early contracts have already fully vested; remaining contracts continue vesting at ~3.45M TON/month (per CEX listing model).\n* **PoS Emission (Inflation):** Ongoing, perpetual issuance at[ ~73,000\u201397,000 TON/day](https://www.tonstat.com/) (1.7 TON per masterchain block + 1.0 TON per basechain block). 50% of transaction fees are [burned](https://dune.com/ton_foundation/staking).\n\n### **Governance**\n\nTON's governance spans three layers: validators, core development, and ecosystem coordination.\n\nAt the protocol layer, approximately 400 validators distributed across 40 countries, with over 450M Toncoin staked, govern upgrade decisions directly. Any change to network parameters or consensus rules must pass an onchain vote among active validators, ensuring no single entity can push through protocol changes unilaterally. According to Chainspect, TON ranks 3rd among Layer-1s by Nakamoto coefficient, placing it among the most decentralized Proof-of-Stake networks.\n\nTON Core, the network's core development arm, maintains the TON node software, ships protocol upgrades, and builds node tooling. The TON Foundation, a non-profit dedicated to the ecosystem's long-term growth, provides grants, resources, and technical support to projects building on TON.\n\nBeyond these two bodies, a growing set of independent teams contributes to infrastructure and developer tooling. TonTech, an engineering team supported by the TON Foundation, maintains core developer primitives including AppKit, AgentKit, WalletKit, and TON Connect. RSquad, a blockchain development team active in the TON ecosystem since its early days, has contributed critical infrastructure, including the Rust TON Node, TON Pay, and TON Teleport, a trustless cross-chain bridge for asset transfers between TON and external networks.\n\n## **TON Ecosystem**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/90ef2406fbeb86c2ab37eeda22a4a75ff7fe5b39-1600x1093.jpg?w=800)\n\n### **Partners and Projects**\n\nKey projects that highlight the variety of benefits the TON ecosystem and blockchain provide:\n\n* **[The Open Platform (TOP)](https://top.co/):** The largest Web3 product development company within the Telegram ecosystem, building and investing in infrastructure and consumer applications on TON. TOP's portfolio includes Wallet in Telegram, Tonkeeper, STON.fi, and Getgems, and the company reached a [$1 billion valuation](https://www.theblock.co/press-releases/361030/the-open-platform-is-first-unicorn-in-web3-ecosystem-in-telegram-at-1bn-valuation) in 2025 after raising over $70 million from Ribbit Capital, Pantera Capital, and others.\n* **[Wallet in Telegram](https://wallet.tg/ton):** A crypto wallet natively integrated into Telegram, developed by TOP, supporting both custodial and self-custodial modes dependent on region. It serves as the primary onramp for Telegram's 1B+ user base, enabling in-chat transfers, Toncoin purchases, and direct access to Telegram Mini Apps without leaving the messenger.\n* **[Tether (USDT)](https://tether.to/):** The dominant stablecoin on TON by circulating supply and the default asset for payments and most DeFi activity across the ecosystem. TON currently holds roughly [$1.28 billion in stablecoins](https://defillama.com/stablecoin/tether), with USDT serving as the primary settlement unit for wallets, DEXs, and merchant payments.\n* **[Ethena](https://ethena.fi/):** Introduced synthetic yield-bearing digital dollars (USDe and sUSDe) into TON's Telegram-native DeFi stack, expanding stablecoin use cases beyond payments into passive yield products. Eligible users holding [tsUSDe](https://blog.ton.org/ethena-ton-foundation-usde-on-ton) in a TON wallet earn boosted yields, with plans for neobanking and peer-to-peer payments powered by Ethena within Telegram.\n* **[xStocks](https://www.ton.org/en/x-stocks-are-live-on-ton-real-world-stocks-now-on-chain):** Tokenized U.S. equities launched on TON, bringing real-world stock exposure (e.g., Apple, Tesla, Microsoft) directly into TON wallets with a self-custodial UX. The platform currently supports over 60 tokenized stocks and ETFs powered by [Backed Finance](https://www.coindesk.com/business/2026/03/10/kraken-s-tokenized-stock-venue-starts-points-program-hinting-at-possible-ecosystem-token/) under Kraken's institutional framework, with plans to expand to 500+ by end of 2026.\n* **[Fragment](https://fragment.com/):** Onchain marketplace integrated into Telegram where collectible usernames, SIM-less phone numbers, and digital gifts are minted and traded as NFTs powered by Toncoin. Fragment is the primary driver of TON's [#2 ranking in NFT trading volume](https://dune.com/ton_foundation/nft) behind Ethereum, with transaction activity tied directly to Telegram's social graph.\n\nOther notable projects building on TON include [Affluent](https://www.affluent.org/), [Bidask](https://bidask.finance/), [Boinkers](https://t.me/boinker_bot), [CapsGame](https://t.me/capsgamebot), [DeDust](https://dedust.io/), [Gamee](https://t.me/gamee), [Gatto](https://t.me/gattoton_bot), [Getgems](https://getgems.io/), [MyTonWallet](https://mytonwallet.app/), [RedStone](https://redstone.finance/), [Storm Trade](https://stormtrade.io/), [Swap Coffee](https://swap.coffee/), [TeleTON](https://teletonagent.dev/), [TONCO](https://tonco.io/), [Torch Finance](https://torch.finance/), [xRocket](https://t.me/xrocket_bot), and [Zargates](https://zargates.com/).\n\nRecent partnerships and integrations:\n\n* [**Mar. 31, 2026**](https://www.tradingview.com/news/cointelegraph:11581f704094b:0-dynamic-adds-embedded-wallet-infrastructure-to-ton-for-telegram-apps/): [Dynamic](http://www.dynamic.xyz) launched embedded wallet infrastructure for TON, letting developers automatically deploy wallets inside their apps and Telegram Mini Apps.\n* **[Mar. 26, 2026](https://blockchain.news/flashnews/walletconnect-integrates-with-ton-blockchain-for-seamless-connectivity):** [WalletConnect](https://walletconnect.com/) launched production support on TON, enabling standardized wallet connections across dApps and Telegram Mini Apps.\n* **[Feb. 17, 2026](https://www.theblock.co/post/390138/ton-foundation-osl-banxa-stablecoin-payments):** [TON Foundation](https://ton.foundation/en) partnered with OSL's Banxa to expand stablecoin payment infrastructure for Asia-Pacific merchants.\n* **[Jan. 7, 2026](https://x.com/ton_blockchain/status/2008966919530090821):** TON announced Toncoin support in [Atomic Wallet](https://atomicwallet.io/), expanding TON's reach into a multichain, non-custodial wallet user base.\n* **[Dec. 24, 2025](https://x.com/ton_blockchain/status/2003764859138199985):** [Fonbnk](https://www.fonbnk.com/) + [Tether](https://tether.to/) expanded USDt on Telegram Wallet, positioning mobile-money conversion as the core bridge for Africa-focused remittances and stablecoin banking flows.\n* **[Dec. 23, 2025](https://x.com/ton_blockchain/status/2003490653645246825):** [HoudiniSwap](https://houdiniswap.com/) launched private TON payments, allowing users to request payments without exposing wallet addresses or transaction history, with inbound support across 120+ chains.\n* **[Dec. 22, 2025](https://investors.shift4.com/news-events/press-releases/detail/288/shift4-launches-global-stablecoin-settlement-platform-unlocking-faster-payments-for-merchants):** [Shift4](https://www.shift4.com/) launched a global stablecoin settlement platform, unlocking faster payments for merchants.\n* **[Aug. 5, 2025](https://x.com/ton_blockchain/status/1952723911130456184):** [Zengo](https://zengo.com/) wallet added native Toncoin support, expanding TON's presence across non-custodial mobile wallets.\n* **Upcoming:** [Chainlink CCIP](https://chain.link/cross-chain) cross-chain interoperability integration (announced 2025, launch pending). [Revolut](https://www.revolut.com/) soft-launched TON support in select regions, with broader availability now live.\n* Toncoin is also listed on major U.S. exchanges, including [Robinhood](https://thedefiant.io/news/nfts-and-web3/robinhood-adds-toncoin-to-u-s-crypto-platform-ahead-coinbase-563a1ec6) (Aug. 2025), [Gemini](https://www.gemini.com/blog/toncoin-usdton-is-now-available-on-gemini) (Sep. 2025), and [Coinbase](https://www.businesswire.com/news/home/20251118274287/en/TON-Strategy-Company-Welcomes-Coinbases-Launch-of-$TON-Trading-Across-Global-Platforms) (Nov. 2025).\n\nFor a recap of category-specific ecosystem developments, please read the following [DeFi](https://blog.ton.org/defi-on-ton), [Institutional](https://blog.ton.org/institutions-on-ton), and [NFT](https://blog.ton.org/how-nfts-evolved-on-ton) reports.\n\n### **Network Metrics**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/bc2d8fe851fa2beb18fb54c218df48a61fb5422d-1600x868.jpg?w=800)\n\nTON\u2019s network activity in 2025 reflects a chain that has moved past the initial hype spike and is settling into a more durable, consumer-driven usage baseline. Daily active users peaked sharply in early 2025 (~600K), then normalized throughout the year, finishing Q4 2025 with ~1.0% QoQ growth and a relatively stable range of ~100K\u2013150K.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/5bffb8b96c5364c552301765703380535e272400-6400x3472.png?w=800)\n\nIn parallel, TON has sustained meaningful throughput, with daily transactions spiking above ~7 million during early 2025 surges, then stabilizing around ~1.5\u20132.5 million/day, with periodic bursts and an end-of-year lift similar to daily user data.\n\nTON's NFT market ranks [second only to Ethereum by trading volume](https://dune.com/ton_foundation/nft), driven largely by Telegram-native assets like collectible usernames, numbers, and gifts.\n\n## **Roadmap**\n\nOn Jan. 22, 2025, the TON Core team [published](https://t.me/toncore/6) its H1 2025 roadmap, centered on shipping the long-in-the-works \u201cAccelerator\u201d upgrade, an architecture-level refactor intended to better realize the sharded execution model described in the TON whitepaper and to keep performance stable as load scales. The roadmap prioritized (i) scaling and stability at the protocol layer, (ii) validator operability and resilience, and (iii) faster, more human-readable UX through better APIs and indexing.\n\nBuilding on the Accelerator foundation, TON's [2026 roadmap](https://ton.org/en/roadmap) shifts focus from the infrastructure-level refactoring of the Accelerator era toward developer accessibility and its top priority, sub-second finality. At the protocol layer, Catchain 2.0 targets sub-second block finalization, while the Rust Node brings institutional-grade operability and resilience to the validator set.\n\nOn the developer side, the roadmap prioritizes four workstreams: (i) smart contract tooling through [Tolk 1.3](https://docs.ton.org/v3/documentation/smart-contracts/tolk/overview) and toolchain, the successor language and SDK stack to FunC, offering TypeScript/Rust-inspired syntax and up to 40% lower gas costs; (ii) [AppKit](https://ton.org/dev/appkit), a unified application layer via development kits for apps, wallets, and payments ([TON Pay](https://ton.org/en/ton-pay-a-new-payments-layer)), compressing the path from idea to shipped Telegram Mini App; (iii) vibe-coding workflows that let developers describe an app to an AI agent and receive a working prototype, ready to share on Telegram; and (iv) AgentKit, an MCP-based toolkit giving autonomous AI agents structured access to wallets, transfers, and DeFi modules on TON.\n\n## **Closing Summary**\n\nTON is positioning itself as one of the few L1s explicitly engineered for consumer-scale adoption, not just DeFi-native throughput benchmarks. Its core bet is that mainstream crypto use breaks on two constraints, distribution and latency/cost, and that solving both requires more than a fast chain. TON\u2019s dynamically sharded, asynchronous architecture is designed to maintain stable performance under load, while its vertically integrated protocol services (DNS, Storage, Payments, Proxy, Sites) reduce reliance on third-party infrastructure. Most importantly, TON\u2019s deep integration with Telegram collapses the traditional crypto UX stack (wallet \u2192 browser \u2192 dApp) into a single messaging-native environment where onchain actions can feel like normal in-app behavior.\n\nIn 2025, TON shifted to a technically differentiated L1 focused on consumer distribution, with Telegram serving as its primary onboarding and application surface. The ecosystem has increasingly matured into a Telegram-native financial stack while network activity reflects a chain transitioning from hype-driven spikes to a steadier transactional baseline.\n\nLooking forward, TON's 2026 roadmap shifts from infrastructure refactoring to performance and developer accessibility. Catchain 2.0 targets sub-second finality, the Rust Node reimplements the validator stack, and a unified developer layer (Tolk, AppKit, TON Pay) compresses the path from idea to shipped Telegram Mini App. In parallel, Telegram is becoming a native interface for AI agents, with Cocoon providing decentralized compute and AgentKit connecting autonomous agents to onchain actions. If the vibe-coding loop works at scale, where builders generate working prototypes from a natural-language prompt, share them inside Telegram for instant feedback, and iterate daily rather than quarterly, TON becomes not just a settlement layer for digital finance inside Telegram, but the fastest path from idea to testable product in crypto.", "hook": "TON has quietly assembled the ingredients most Layer-1s lack: 1B+ captive users via Telegram, $550M+ in institutional capital, and a financial stack (stablecoins, tokenized equities, yield products) embedded directly in the messenger. This IoC covers the architecture, tokenomics, ecosystem, and 2026 roadmap driving TON's bet that consumer crypto adoption starts inside the chat window.", "publishDate": "2026-04-07T16:00:00Z", "readingTimeInMinutes": 21.80333333333333, "slug": "understanding-ton-a-comprehensive-overview", "subscriptionTier": "free", "summary": "TON is the only Layer-1 with native distribution inside a 950M MAU messaging app. This Initiation of Coverage breaks down the network's architecture, validator economics, DeFi ecosystem, tokenomics, and 2026 roadmap. At ~$6.9B FDV, the question is whether Telegram's user base converts into sustained onchain activity.", "tags": [ { "id": "8ef53cf6-d66a-48e3-bf0d-03da8cfdca14", "name": "Consumer" }, { "id": "9d1f93f6-d15c-40ea-b384-58c2a9419fd8", "name": "Layer-1" } ], "title": "Understanding TON: A Comprehensive Overview", "previewImage": "https://cdn.sanity.io/images/2bt0j8lu/production/cf321d93bc0b99464d29d02c79b4eda23941bfeb-6400x3600.png" }, { "id": "ce62bc98-3825-479a-b419-18b33d4ad5f0", "createdAt": "2026-04-02T20:16:42Z", "updatedAt": "2026-04-02T20:44:02Z", "assetIds": [ "9cc76ef5-f68f-45b3-930d-98af8f6513fc" ], "assets": [ { "id": "9cc76ef5-f68f-45b3-930d-98af8f6513fc", "name": "Sai", "symbol": "Sai", "slug": "sai-dot-fun" } ], "authors": [ { "id": "cbe1f170-343a-461c-abd3-9ceee66022b8", "name": "Eric Manoukian", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/d311e4315bfaa623b347b8ad6d1ce1e4f48023ff-400x400.jpg?w=100", "linkedinUrl": "" } ], "content": "## Key Insights\n\n* Sai is a perpetual decentralized exchange (perp DEX) built on Nibiru that launched publicly on Feb. 18, 2026. It offers up to 100x leverage with oracle-settled pricing and pools liquidity through Sai Liquidity Positions (SLPs) that back markets and absorb trader P&L.\n* The launch coincided with Let's Go Saicho, a $25,500 trading competition split into two phases. Phase 1 (Feb. 18 to March 4) rewarded the top 25 traders by percentage ROI with up to $20,000, and Phase 2 (March 5 to March 19) distributes $5,500 across volume-based tracks.\n* As of March 16, TVL reached $47,211, cumulative perp volume hit $6 million, and the platform collected $21,560 in fees. Open interest peaked at $549,628 on March 3, the same day volume reached its single-day high of $1.27 million.\n* Sai saw 134 unique traders, with 52.9% executing six or more trades. Returning traders accounted for 58.2% of Phase 2 daily activity. The liquidation rate dropped from 12.9% in Phase 1 to 6.7% in Phase 2 despite average leverage increasing from 33.1x to 44.2x.\n* The roadmap extends beyond perps: a white-label Perps-as-a-Service product, Sai Savings with ~5% yield on idle stables, automated strategy vaults, real-world asset markets, and a mobile application positioning Sai as trading infrastructure rather than an isolated venue.\n\n## Primer\n\n[Sai](https://sai.fun/) is a perpetual decentralized exchange (perp DEX) that aims to simplify, predict, and make leveraged trading more accessible. Users [connect](https://docs.sai.fun/guides/wallet-setup) to the application with standard EVM wallets, deposit collateral such as USDC or stNIBI, and trade perp markets through an interface that resembles a centralized futures exchange. They can open long or short positions, set up to 100x leverage on certain assets, and use familiar order types, including market, limit, stop, and conditional (stop-loss/take-profit) orders.\n\nSai was created by members of the Nibiru team with experience in distributed systems, infrastructure, and financial protocols. The creators are led by Nibiru founder and CEO [Unique Divine](https://www.linkedin.com/in/unique-divine/), who has a background in applied mathematics and machine learning, as well as prior experience at [IBM](https://www.ibm.com/us-en) and [Sommelier Protocol](https://somm.finance/).\n\nSai is built on [Nibiru](https://nibiru.fi/) Chain, a high-throughput Layer-1 with a unified EVM and [Wasm execution](https://nibiru.fi/docs/concepts/wasm/) environment. Nibiru combines an EVM-equivalent runtime ([Nibiru EVM](https://nibiru.fi/docs/evm/)) and a Wasm environment in a single state machine, allowing Solidity and Rust contracts to coexist, share accounts and gas, and call each other through built-in system contracts that bridge the two VMs. Its consensus layer, [Nibiru BFT](https://nibiru.fi/docs/concepts/arch/nibiru-bft/), is an evolution of [CometBFT](https://docs.cometbft.com/v0.38/), delivering fast finality and sub-two-second settlements. Alongside core modules for staking, governance, IBC, and a native oracle, this architecture provides Sai with the low-latency execution, deterministic settlement, and oracle support necessary to offer a CEX-like onchain derivatives platform. Sai\u2019s defining characteristic is its approach to pricing and risk: execution is anchored to decentralized oracles and backed by pooled vaults called Sai Liquidity Positions (SLPs), emphasizing consistent behavior across different market regimes.\n\n## Let\u2019s Go Saicho: The Trading Competition\n\nSai's [public launch](https://x.com/SaiDotFun/status/2024080216474497407?s=20) on Feb. 18, 2026, coincided with the start of [Let's Go Saicho](https://docs.sai.fun/resources/blogs/lets-go-saicho), a one-month trading competition designed to bootstrap both trading activity and platform liquidity. The competition runs through March 19 and distributes a $25,500 prize pool across two phases, each targeting a different type of trader behavior.\n\n### Phase 1: PnL Competition\n\n[Phase 1](https://docs.sai.fun/resources/blogs/lets-go-saicho#phase-1-pnl-competition-feb-18-march-4) ran from Feb. 18, 2026, to March 4, 2026, and allocated $20,000 to the top 25 traders ranked by percentage ROI rather than absolute profit. A trader who earned a 50% return on a $500 account could outrank a trader who earned 5% on a $50,000 account. Only closed positions counted toward PnL, and unrealized gains were excluded.\n\nEligibility thresholds scaled with rank. Traders competing for the top three positions needed at least $1 million in cumulative volume and $250 in profit. Ranks 4 through 10 required $50,000 in volume and $50 in profit, while ranks 11 through 25 required $50,000 in volume with no minimum profit. The prize distribution was structured as follows:\n\n* Rank 1: $6,250\n* Rank 2: $3,125\n* Rank 3: $1,250\n* Rank 4-10: $625 each\n* Ranks 11-25: $250 each\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/677eda723599cfbacb2cabeb0cb4263b0a68ad4c-2048x1262.png?w=800)\n\nNo [traders](https://app.sai.fun/leaderboard/) met the $1 million volume threshold required for the top three positions, so none of the top three prizes were distributed. The remaining prizes were awarded to qualifying traders in ranks 4 through 25.\n\n### Phase 2: Volume Competition\n\n[Phase 2](https://docs.sai.fun/resources/blogs/lets-go-saicho#phase-2-volume-based-march-5-march-19-live-now) ran from March 5, 2026, to March 19, 2026, and shifted the incentive from profitability to volume, distributing $5,500 across three tracks. The largest pool, $4,000, is shared among all traders who cross $50,000 in volume, with each trader's share proportional to their total volume. All activity from Phase 1 counts toward Phase 2 thresholds in this segment. A $1,000 pool is split evenly among the first 50 traders to reach $10,000 in Phase 2 volume, creating an early-mover incentive. A single $500 prize goes to the highest-volume trader in Phase 2.\n\nUnlike Phase 1, Phase 2 did not require profitability to qualify. The competition enforces rules against sybil attacks, wash trading, fake volume, and malicious bots. A minimum position holding time of 10 to 20 minutes applies during Phase 2 to discourage instantaneous round-trip trades designed to inflate volume. Winners are expected to be announced shortly.\n\n## Early Traction and Key Metrics\n\n### Volume\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/fb2f62edb191d86fbce3dd0899ea17d13e25cd33-2048x1111.png?w=800)\n\nCumulative [perpetual volume](https://defillama.com/protocol/sai?tvl=false) from Feb. 18, 2026, through March 16, 2026, reached $6 million. Phase 1 accounted for $3.1 million of that total, with the final three days of Phase 1 generating $2.4 million as traders pushed to lock in PnL rankings. Phase 2 volume through March 16, 2026, totaled $2.9 million across 12 days, a higher daily average than Phase 1's first 10 days but below the Phase 1 closing sprint. Volume spiked again on March 11, 2026, at $573,420 before tapering to $36,810 on March 16, 2026, the lowest daily figure since launch, as Phase 2 approached its final days.\n\n### TVL and Open Interest\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/3c755fdca31ba083fc327a184cdfd371da87b29c-2048x1178.png?w=800)\n\nAs of March 16, 2026, Sai's [total value locked](https://defillama.com/protocol/tvl/sai) (TVL) was at $47,210, up 14x from $3,380 on launch day. Growth came in two distinct waves. TVL held relatively steady between $3,200 and $4,400 during Sai's first week, then increased to $15,140 on Feb. 25, 2026, and climbed to $26,650 by Feb. 28, 2026, as early competition activity drew deposits. A second leg carried TVL from $29,120 on March 5, the start of Phase 2, to $47,210 by March 16, a 62% increase over 12 days, driven in part by new SLP deposits entering the platform after Phase 1 concluded.\n\n[Open interest](https://defillama.com/protocol/sai?openInterest=true) peaked at $549,630 on March 3, the same day perp volume hit its single-day high of $1.27 million. By March 16, open interest had settled to $27,620 as the competitive intensity of Phase 1's final days gave way to Phase 2's steadier volume-building pace.\n\n### Fees\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/878907efbda3f8a560c1f79c0190bdabfd4d2708-2048x1111.png?w=800)\n\nSai collected $21,560 in cumulative [fees](https://defillama.com/protocol/sai?tvl=false&perpVolume=false&fees=true) from launch through March 16. Phase 1 generated $19,600, and Phase 2 contributed $1,960 through its first 12 days. Daily fees peaked at $3,310 on Feb. 27, 2026, during a stretch from Feb. 24, 2026, to March 1, 2026, where fees exceeded $1,000 every day. After the Phase 2 transition, daily fees dropped sharply and remained subdued, falling below $100 on four of the first five days as trading shifted from high-conviction PnL plays to lower-cost volume accumulation.\n\nThe effective fee rate, fees as a percentage of volume, averaged 0.36% across the full period but diverged between phases at 0.64% in Phase 1 versus 0.07% in Phase 2. This gap likely reflects differences in sizing and trade mechanics. Phase 1 traders opened larger positions and held them through wider price moves to accumulate PnL, generating more fee-bearing events per dollar of volume. Phase 2 traders used smaller positions with higher leverage, producing high notional volume relative to the fees collected.\n\n### User Activity and Trade Frequency\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/4f1f59162f7e8c9352bb60bc675bbea52e7a66a9-2048x1235.png?w=800)\n\nAs of March 16, 2026, Sai had 134 [unique traders](https://dune.com/queries/6825342/10709246). The platform had an existing base of 39 traders from its private launch period before Feb. 18, 2026, and the Let\u2019s Go Saicho competition brought in 95 additional participants, 62 during Phase 1 and 33 during Phase 2.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/139a34198ba2c47be91b498028b9b1747c22575f-2048x1111.png?w=800)\n\nThe trader frequency [distribution](https://dune.com/queries/6825355/10709839) reveals a relatively engaged base for a new platform. Only 3.4% of traders executed 1 trade. The largest cohort, 43.6%, executed 2 to 5 trades, while 35.9% places 6 to 20 trades. The most active decile, 10 traders at 50+ trades each, averaged 11.8 active trading days, indicating a core group that traded consistently across both phases.\n\n### User Retention\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/be30ea424fa2e679a7353ae194753406ea4ad350-2048x1185.png?w=800)\n\n[Retention](https://dune.com/queries/6825351/10709830) patterns during Phase 2 provide a window into user stickiness. Returning traders [accounted](https://dune.com/queries/6825349/10709258) for 58.2% of daily active trader appearances from March 5, 2026, through March 16, 2026. After the March 5 spike of 60 active traders, including 37 new arrivals, daily activity settled at an average of 8.7 traders. The pattern suggests that Sai retained a meaningful share of Phase 1 participants in Phase 2 but struggled to attract new entrants after the Phase 2 launch-day momentum passed. \n\n### Risk Behavior: Liquidations and Leverage\n\nThe shift in competition incentives produced a clear change in risk behavior. The [liquidation rate](https://dune.com/queries/6825407/10709162) dropped from 12.9% of trades in Phase 1 to 6.7% in Phase 2, a 48% relative decline. This occurred despite [average leverage](https://dune.com/queries/6825407/10709162) increasing from 33.1x to 44.2x. Phase 1\u2019s ROI-based rewards incentivized directional bets with higher risk tolerance, meaning getting liquidated was an acceptable cost to pursue outsized returns. Phase 2\u2019s volume-based rewards penalized liquidations indirectly, since blown-up capital can\u2019t generate more volume.\n\n## Community: The SaiClone Ambassador Program\n\nAlongside the trading competition, Sai launched the [SaiClone Ambassador Program](https://docs.sai.fun/resources/blogs/saiclone-ambassador), a three-tier progression system that operates entirely through Sai's [Discord](https://discord.com/invite/saidotfun) server. The program uses the [Mee6](https://mee6.xyz/en) bot to track contributions and assign XP, rewarding community engagement, content creation, and platform advocacy across the following tiers:\n\n* [Saicho](https://docs.sai.fun/resources/blogs/saiclone-ambassador#id-1.-saicho) (levels 0-5, up to 1,624 XP): The entry tier, granted automatically upon engaging with the Discord community.\n* [Saiborg](https://docs.sai.fun/resources/blogs/saiclone-ambassador#id-2.-saiborg) (Levels 6-15, 1,625-13,799 XP): Trusted, highly engaged members who receive special community recognition and increased influence on community decisions.\n* [Sage](https://docs.sai.fun/resources/blogs/saiclone-ambassador#id-3.-sage) (Level 16+, 13,800+ XP): Reserved for top contributors. Unlike other tiers, Sage requires a formal application reviewed by the Sai team. Benefits include direct team access, exclusive merchandise, bi-monthly raffles, collaboration opportunities, and early access to platform updates.\n\n[XP](https://docs.sai.fun/resources/blogs/saiclone-ambassador#how-to-earn-xp) accrues through trading activity, technical analysis and signals, community events, video and educational content, X engagement, bug reports, and Discord messages. The program ties community growth directly to platform usage, creating a feedback loop between trading activity and ambassador progression.\n\n## Looking Ahead\n\nSai's roadmap positions the platform as a trading infrastructure rather than a standalone venue. The most differentiated planned product is a white-label Perps-as-a-Service offering, with the first [iteration](https://x.com/SaiDotFun/status/2032458407899209822) from [Coded Estate](https://app.codedestate.com/perps/trades), an RWA platform that now offers perpetual trading powered by Sai. If executed, this would extend Sai's liquidity and infrastructure beyond its own front end.\n\nOn the product side, planned additions include [Sai Savings](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=products%20and%20yield-,Sai%20Savings,-%3A%20A%20way%20for), which targets ~5% yield on idle stable balances, [automated strategy vaults](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=control%20and%20flexibility-,Automated%20strategies,-%3A%20Launch%20vaults), expanded [market listings](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=Real%20world%20asset%20markets) that include real-world asset-style instruments, and DeFi integrations connecting SLP vaults to swaps and routing protocols. The [account](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=with%20one%20click-,Accounts%3A,-A%20true%20CEX) experience is also evolving. Gasless trades are already live, and the team plans to add multichain and fiat funding routes, [cross-chain USDC deposits](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=Cross%20chain%20and%20fiat%20funding) via improved on-ramps, and a [mobile application](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=or%20bank%20account-,Mobile%20app%3A,-Release%20a%20mobile).\n\nFor developers, Sai plans to ship a [data platform](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=the%20Sai%20platform-,Data%20platform,-%3A%20Backtesting%2C%20historical%20data) with historical data access, backtesting tools, and support for custom order types.\n\n## Closing Summary\n\nSai's Let's Go Saicho trading competition reached 134 traders, generated $6 million in volume, grew TVL 14x in under a month, and collected $21,560 in fees. The two-phase incentive structure produced distinct behavioral shifts, with liquidation rates halving and position sizes shrinking as traders adapted from ROI-focused to volume-focused trading. A 58.2% retention rate in Phase 2 suggests the platform established a sustained baseline of recurring users, though new trader acquisition dropped sharply after the Phase 2 launch spike.\n\nThe next phase for Sai begins after the competition ends. Whether the platform can retain its active traders without incentives, grow SLP liquidity organically, and begin delivering on a roadmap spanning Perps-as-a-Service, Sai Savings, real-world asset markets, and a mobile application will determine whether Sai converts early traction into lasting positioning within the perp DEX landscape.", "hook": "Sai launched on Nibiru with a two-phase trading competition that attracted 134 traders and generated $6 million in perpetual volume in under a month.", "publishDate": "2026-04-06T13:50:00Z", "readingTimeInMinutes": 10.556666666666667, "slug": "sai-bootstrapping-a-perp-dex-on-nibiru", "subscriptionTier": "free", "summary": "Sai is a perpetual DEX on Nibiru offering up to 100x leverage with oracle-settled pricing and pooled SLP-backed liquidity. Its public launch coincided with Let's Go Saicho, a $25,500 competition split between a PnL phase and a volume phase, each targeting different trader behavior. TVL grew 14x to $47,210, cumulative fees hit $21,560, and returning traders accounted for 58.2% of Phase 2 daily activity. The effective fee rate diverged sharply between phases, from 0.64% in Phase 1 to 0.07% in Phase 2, reflecting a shift from high-conviction directional bets to smaller, higher-leverage volume plays. Sai's roadmap extends into Perps-as-a-Service, yield products, RWA markets, and a mobile app, positioning it as trading infrastructure rather than an isolated venue.", "tags": [ { "id": "8f138ee0-fb4f-42b8-919c-9feffd558d88", "name": "Perp DEX" }, { "id": "3fdf6b6b-cfac-426d-b20f-3e4794dec982", "name": "Pulse Reports" } ], "title": "Sai: Bootstrapping a Perp DEX on Nibiru", "previewImage": "https://cdn.sanity.io/images/2bt0j8lu/production/a4aec153be082d301a6690dc37248c9c4ed649d5-6068x3560.png" }, { "id": "283895eb-251b-416c-99b1-ed5c3cb67f9c", "createdAt": "2026-03-29T21:09:41Z", "updatedAt": "2026-03-31T16:11:30Z", "assetIds": [ "3748291f-99cb-4002-9bf2-1a23edc0af77" ], "assets": [ { "id": "3748291f-99cb-4002-9bf2-1a23edc0af77", "name": "Nexus Labs", "symbol": "NEX", "slug": "nexus-labs" } ], "authors": [ { "id": "25fb4f17-1b40-4477-8e6b-be982a87b349", "name": "Alice Hou", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/57dad35450be1a47f2ff6628e6f5fca213499ab4-400x400.jpg?w=100", "linkedinUrl": "" }, { "id": "ac138b81-4baf-4a63-8dbc-e8592c93ba17", "name": "Matt Kreiser", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/a09ff5484ce95234175e5e49131ab71bd1b1726d-1024x1024.png?w=100", "linkedinUrl": "" } ], "content": "## Key Insights\n\n* Nexus embeds **high-performance financial engines directly into the protocol through its co-processor model**, moving exchange, margin, and liquidation logic from contract-level simulation into native execution.\n* The **dual-execution architecture allows performance-critical financial workloads and programmable smart contracts to operate in parallel**, avoiding the typical tradeoff between latency and composability.\n* **The Nexus zkVM anchors execution to cryptographic proofs** rather than full validator re-execution, positioning **proof verification as the primary mechanism for scalable correctness.**\n* **With mainnet and exchange deployment in 2026**, Nexus shifts from infrastructure buildout to market validation, where **liquidity formation, and proof-generation efficiency will determine long-term viability. Central to achieving market validation are USDX, the native U.S. dollar stablecoin of the Nexus ecosystem, and the Nexus Exchange, a non-custodial, central limit order book (CLOB) embedded directly into the Nexus Layer 1 (L1).**\n* **The Nexus Exchange is designed to deliver CEX-parity performance in a more self-custodial, verifiable environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.**\n\n## Introduction\n\nFinancial infrastructure depends on complex computational systems that remain largely unverifiable to external participants. Risk models, margin calculations, settlement logic, and internal reconciliation processes operate behind institutional boundaries, requiring users to rely on reporting and oversight rather than direct proof. While public blockchains introduced deterministic execution and transparent state transitions, most existing architectures are not designed to support the performance and computational demands of modern financial markets.\n\nGeneral-purpose chains prioritize composability and shared liquidity but face constraints around latency and throughput. [Application-specific chains](https://messari.io/copilot/share/application-specific-chains-d7e77c8d-2068-4560-84a1-c23e800490dc) achieve higher performance by narrowing scope, yet fragment liquidity and isolate execution environments. In both cases, critical financial logic often remains either offchain or insufficiently optimized for high-frequency, computation-heavy workloads.\n\n[Nexus](https://messari.io/project/nexus-labs) introduces a layered architecture that separates execution, verification, and consensus into independently optimized systems. Its [dual execution model](https://docs.nexus.xyz/architecture/dual-block-execution) combines an [EVM-compatible environment](https://messari.io/copilot/share/evm-compatibility-df970104-0577-49f5-a15e-647f9e746f32) with a specialized financial [co-processor](https://messari.io/copilot/share/co-processor-definition-6dd4fd0e-6438-4882-8403-5fa2234b1ae2), while a native [zkVM](https://messari.io/copilot/share/zkvm-explained-81e8af21-442d-44b7-9201-1a191baf51ef) generates proofs of correct execution that are committed to the base layer. This structure is designed to support performance-sensitive financial applications without relying on external verification frameworks. For example, the [upcoming](https://blog.nexus.xyz/introducing-the-nexus-dex-alpha/) [Nexus ](https://app.nexus.xyz/trade)Exchange is designed to deliver CEX-parity performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nThis Initiation of Coverage (IOC) report focuses on a technical examination of Nexus\u2019s architecture. Readers seeking a broader discussion of the long-term vision behind verifiable finance are encouraged to refer to the [Nexus Pulse Report](https://messari.io/report/nexus-a-framework-for-verifiable-finance).\n\n[Website](https://nexus.xyz/) / [X (Twitter)](https://x.com/NexusLabs) / [Discord](https://discord.com/invite/AmRKShJfq6)\n\n## Background\n\n[Nexus](https://messari.io/project/nexus-labs/fundraising) was founded in 2022 by [Daniel Marin](https://www.linkedin.com/in/danielmarinq/), a computer science graduate from Stanford University, with the objective of building a universal verifiable machine capable of proving arbitrary computation. The project initially focused on advancing zero-knowledge (zk) proving infrastructure before refining its scope toward financial applications that demand both high performance and computational integrity.\n\nIn June 2024, Nexus [raised](https://blog.nexus.xyz/series-a/) a $25 million Series A round co-led by [Lightspeed](https://messari.io/organization/lightspeed-venture-partners) and [Pantera](https://messari.io/organization/pantera-capital), bringing total capital raised to over $27 million. The network [launched](https://blog.nexus.xyz/the-new-nexus-testnet-is-live/) its first public testnet in December 2024 and has since iterated toward a production-ready architecture.\n\n## Technology\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/4b843d24402778c73e25d671d1516225977c7cf7-7680x4320.png?w=800)\n\nNexus is structured as a [three-layer architecture](https://docs.nexus.xyz/) composed of an Execution Layer, a Verification Layer, and a Consensus Layer. Each layer operates as a distinct system, responsible for running application logic, generating and validating execution proofs, and finalizing state transitions.\n\n### Execution Layer: Nexus EVM and NexusCore\n\n#### Dual-Block Execution\n\nNexus implements a [dual-block execution model](https://docs.nexus.xyz/architecture/dual-block-execution) designed to separate high-frequency financial processing from general-purpose smart contract coordination. Instead of batching all activity into a single block cadence, the network operates two synchronized block streams with distinct performance characteristics.\n\n[NexusCore](https://docs.nexus.xyz/architecture/nexuscore) targets block times of five milliseconds, while NexusEVM has a block time of 1-2 seconds. These blocks are optimized for latency-sensitive workloads such as order matching, position updates, and risk recalculations. [NexusEVM](https://docs.nexus.xyz/architecture/nexusevm) operates on a slower block cadence, aggregating state changes from several NexusCore blocks before finalization. This periodic synchronization layer preserves compatibility with Ethereum-style smart contracts while allowing composability between programmable logic and high-speed financial activity.\n\nThis structure has three key effects. First, high-speed trading activity runs independently from complex smart contract logic, so time-sensitive operations are not slowed down by heavier computation. Second, performance can scale more efficiently with hardware, as financial workloads do not need to wait for full EVM block processing. Third, both execution environments remain economically unified, with fees and incentives settled at the base layer rather than split across separate systems.\n\nNexusCore\n\nAt the center of NexusCore is the co-processor model. A co-processor is a native execution module embedded into the blockchain itself. Instead of interpreting [smart contract bytecode](https://blog.chain.link/what-are-abi-and-bytecode-in-solidity/), it runs pre-compiled logic with direct access to protocol resources. This design reduces execution overhead and allows financial operations to be processed with greater consistency and speed.\n\nEach co-processor functions as an independent state machine. It maintains its own isolated data structures, executes specialized algorithms tailored to its purpose, and exposes controlled interfaces for interaction. This isolation enables parallel execution across modules while maintaining deterministic state transitions under shared consensus validation.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/cdbe36d2664c53a891569a354d7cefbb63a24280-7680x4320.png?w=800)\n\nThe architecture can be understood in three components:\n\n* **State Layer:** Maintains dedicated data structures and deterministic updates for each co-processor.\n* **Machine Layer:** Executes specialized financial logic, such as matching, margining, or settlement.\n* **I/O Layer:** Enables co-processors to be accessed directly by offchain systems or by smart contracts onchain. \n\nNexusCore\u2019s dual interface is a key advantage. It allows professional trading systems to connect directly for speed, while smart contracts can interact with the same engine onchain. In practice, both high-frequency trading and DeFi applications can run on the same network without sacrificing performance or composability.\n\nOver time, NexusCore is intended to host a broader catalog of \u201cL1-native engines,\u201d including lending markets, vault strategies, oracle and information feeds, RWA and stablecoin infrastructure, gas and fee modules, and bridging primitives, all of which compose atomically with NexusEVM smart contracts.\n\n#### NexusEVM\n\nAt the protocol level, NexusEVM adheres to the standard [Ethereum Virtual Machine ](https://ethereum.org/developers/docs/evm/)specification. It supports the same contract bytecode, gas semantics, RPC interfaces, and developer tooling used across Ethereum.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/3eefe5ee76b49a3b1721c076181ad96ca399b08a-7680x4320.png?w=800)\n\nWithin Nexus, NexusEVM runs in parallel with NexusCore. Smart contracts deployed on NexusEVM can invoke Core-level co-processors through EVM precompiles or structured cross-domain calls. These interactions are [atomic](https://www.investopedia.com/terms/a/atomic-swaps.asp), meaning that if any part of the transaction fails, the entire operation reverts. Ordered processing ensures deterministic state transitions across validators.\n\nThis integration allows developers to combine programmable contract logic with high-performance financial engines. Applications can manage governance, token logic, incentives, or strategy layers in NexusEVM, while delegating performance-critical execution to NexusCore. In practice, NexusEVM provides an expressive, composable layer of the system, enabling developers to extend and build on top of Core-level financial primitives without leaving the base chain.\n\n### Verification Layer: Nexus zkVM\n\nThe Verification Layer is powered by the Nexus zkVM, a zk virtual machine that generates proofs confirming that computation was executed exactly as specified. Instead of every validator replaying complex logic, the network verifies a succinct proof derived from that execution.\n\nThe zkVM is composed of four primary technical layers:\n\n* RISC-V Machine Architecture: A custom-built virtual machine implementing a modified [RISC-V instruction set](https://messari.io/copilot/share/risc-v-b8a3d4a4-438c-487a-a4ad-53fde178e4f0). It is designed specifically for prover efficiency, including structured memory handling and a \u201cprove only what is accessed\u201d model that reduces unnecessary proof overhead.\n* Algebraic Constraint System (AIR): The execution of the machine is translated into a mathematical representation known as an [Algebraic Intermediate Representation](https://docs.nexus.xyz/zkvm/overview/architecture#core-components). This formalizes every instruction, memory read, and state transition into constraints that must be satisfied for a proof to be valid.\n* STARK-Based Prover (S-two Integration): Execution traces are converted into cryptographic proofs using a [STARK prover](https://github.com/starkware-libs/stwo) optimized for performance. STARKs allow proofs to remain succinct and publicly verifiable without trusted setup requirements.\n* Runtime & SDK Layer: A [Rust](https://rust-lang.org/)-based runtime that allows developers to define public inputs, private inputs, outputs, and logging in a structured way, while abstracting the underlying proving complexity.\n\nNexus zkVM\u2019s benefit is architectural scalability: computation can scale independently from consensus because validators verify proofs rather than replay entire workloads. This reduces replication cost while maintaining deterministic correctness.\n\nA potential risk, on the other hand, is proving overhead. Generating STARK proofs is computationally intensive and requires specialized hardware or distributed prover infrastructure. While verification is lightweight, the economic viability of large-scale proving depends on continued optimization and network-level prover coordination.\n\n### Consensus Layer: Nexus BFT\n\nThe Consensus Layer is governed by [NexusBFT](https://docs.nexus.xyz/), the protocol responsible for finalizing blocks, validating execution commitments, and managing the lifecycle of co-processors.\n\nEach block finalized by NexusBFT includes three core elements:\n\n* A [Merkle commitment](https://messari.io/copilot/share/merkel-commitment-d677ea83-4c90-41b6-b851-bd75041acea5) to the execution state, anchoring the verified results of both NexusCore and NexusEVM.\n* Validator signatures and metadata, establishing agreement across the network.\n* Optional registry updates, which modify the active set of co-processors through the [CPRegistry](https://docs.nexus.xyz/network/overview/system-overview#consensus-layer).\n\nBeyond standard block finalization, NexusBFT introduces protocol-level extensibility. Rather than requiring [hard forks](https://messari.io/copilot/share/what-are-hard-forks-5a6fa661-fb57-4817-9208-aac62b515239) to introduce or modify financial engines, co-processor registration and lifecycle management are handled directly within the consensus layer. This allows the network to activate, upgrade, or deprecate specialized modules without disrupting execution environments.\n\n## DeFi on Nexus\n\n### Strategy and USDX\n\nThe Nexus team is building a native stablecoin and perpetuals-focused Exchange directly into the Layer 1, given that these are [three of the most](https://blog.nexus.xyz/usdx-the-money-layer-for-verifiable-finance/#:~:text=Ethereum%2C%20and%20beyond.-,The%20USDX%20thesis,-At%20the%20core) extensible, proven and synergistic businesses in crypto. Taken together, the L1 and exchange are designed to deliver CEX-parity performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nUSDX is the [native U.S. dollar stablecoin](https://blog.nexus.xyz/usdx-the-money-layer-for-verifiable-finance/) of the Nexus ecosystem, 1:1-backed by U.S. Treasury bills and cash equivalents. USDX will be the default margin and settlement asset for [Nexus ](https://app.nexus.xyz/trade)Exchange, a non-custodial [central limit order book](https://messari.io/copilot/share/central-limit-order-book-0364d6bc-f9e7-4059-99e7-28066b7cc1f5) (CLOB) embedded directly into the Layer 1 (L1). The more the Exchange is used, the greater the demand for USDX. Moreover, the more USDX in circulation, the deeper and cheaper liquidity becomes for the exchange. With meaningful adoption, this reinforcing flywheel can increase the value of the L1.\n\nUSDX will first launch on Ethereum, where distribution is deepest, followed by Nexus mainnet, and crosschain interoperability. Issuance will take place via the M0 Protocol via the JMI extension, which will enable permissionless 1:1 swaps from major stablecoins into USDX. As tokenized assets and 24/7 synthetic markets expand onchain, USDX is designed to serve as the neutral denominator for risk-managed portfolios.\n\nThe key value proposition of USDX relative to other stablecoins is [yield streaming](https://blog.nexus.xyz/yield-is-the-2026-defi-battleground/#:~:text=DeFi%20in%202026.-,Yield%20streaming%3A%20from%20extraction%20to%20alignment,-Yield%20streaming%20inverts), which inverts the [extractive model](https://blog.nexus.xyz/yield-is-the-2026-defi-battleground/#:~:text=The%20extractive%20model%3A) of the largest stablecoins USDT and USDC, whose issuers capture all reserve yield as compensation for infrastructure and compliance. Nexus streams USDX yield directly to users and builders on the L1 via the fully transparent Global Yield Distribution System ([GYDS](https://blog.nexus.xyz/usdx-the-money-layer-for-verifiable-finance/#:~:text=Nexus-,Yield%20streaming%20and%20the%20Global%20Yield%20Distribution%20System,-One%20of%20the)). Yield from U.S. Treasury bills and cash equivalents is distributed as USDX each week according to the time-weighted USDX balances across registered application sources, which are contracts and modules that builders have opted into. The yield is split between the protocol and builders, with builder allocations proportional to attributed USDX TVL, and yield flowing through to end users based on their balances, where supported. On top of this, Nexus can, at its discretion, add protocol-native incentives to increase yield beyond short-duration U.S. Treasury yields, including portions of exchange revenue, subject to governance and risk budgets, directed at strategic segments like builders bringing new markets or liquidity. The Nexus team plans to publish a quarter-by-quarter policy for USDX, disclosing a target onchain yield that reflects the baseline Treasury rate plus any protocol-native additions.\n\nThis aligns incentives to a much higher degree than Tether\u2019s USDT and Circle\u2019s USDC, which simply offer access to the stablecoin as the value proposition. It\u2019s also a process entirely unblocked compared to yield-bearing stablecoins registered as securities (which severely limits the holder base to qualified participants) in order to pay interest directly to holders. \n\nThe yield streaming model of USDX creates a predictable, programmatic incentive loop. Builders are rewarded for attracting real USDX usage, while users are rewarded for holding and deploying USDX on Nexus. During the early phase, NEX token incentives may complement USDX yield to accelerate integrations, but the long-term design relies on organic demand and real yield.\n\n### Nexus Exchange\n\nTo operationalize its execution architecture, Nexus [is developing](https://blog.nexus.xyz/introducing-the-nexus-dex-alpha/) the [Nexus ](https://app.nexus.xyz/trade)Exchange, a non-custodial [central limit order book](https://messari.io/copilot/share/central-limit-order-book-0364d6bc-f9e7-4059-99e7-28066b7cc1f5) (CLOB) embedded directly into the Layer 1 (L1). Unlike exchanges deployed as smart contracts, the Nexus Exchange runs inside NexusCore as a native co-processor. Order matching, margin calculations, funding logic, and liquidations are executed at the protocol level rather than simulated through contract bytecode.\n\nThe first supported product is [perpetual futures](https://docs.nexus.xyz/trading/perpetuals). These contracts allow traders to take leveraged long or short exposure to supported assets without expiration. Users post collateral, open positions with leverage, and pay or receive periodic funding based on market conditions. Because the exchange engine operates within NexusCore, all position updates and risk calculations are processed under deterministic execution and shared consensus.\n\nThis architecture shifts the exchange from being an application layered on top of the chain to becoming part of the chain\u2019s execution fabric. Performance-sensitive operations are handled natively, while settlement and accounting remain transparent and verifiable at the base layer.\n\n### Risk Management and Liquidation\n\nRisk controls are enforced automatically through a built-in [liquidation engine](https://docs.nexus.xyz/trading/perpetuals/liquidations). A trader\u2019s equity is continuously evaluated against predefined margin thresholds using a mark price derived from the Nexus oracle system.\n\nTwo margin levels govern positions. Initial margin determines the leverage required to open a position, while maintenance margin defines the minimum equity needed to keep it open. If equity falls below the maintenance threshold, the system triggers liquidation.\n\nRather than relying on external bots competing to liquidate positions, Nexus executes liquidations through a dedicated onchain mechanism. Positions are closed at or near the mark price, with safeguards to prevent negative balances. If losses exceed available collateral, an [insurance fund](https://docs.nexus.xyz/trading/perpetuals/liquidations#how-liquidation-works) absorbs residual shortfalls to preserve overall system solvency.\n\nBy embedding margin and liquidation logic directly into the execution layer, Nexus reduces execution uncertainty and race conditions. The tradeoff is that core risk parameters are embedded at the protocol level, making changes more consequential than in contract-based systems.\n\nTogether, the Nexus Exchange functions as both a flagship application and a structural demonstration of NexusCore\u2019s capabilities. It tests whether protocol-level financial engines can combine high-performance execution with deterministic settlement and cryptographic accountability within a unified L1 environment. Beyond perpetual futures, Nexus plans to expand the Exchange to include [spot markets](https://docs.nexus.xyz/trading/spot) and [vault products](https://docs.nexus.xyz/trading/vaults), with further details expected in future releases.\n\n## Roadmap \n\nNexus\u2019s [roadmap](https://blog.nexus.xyz/the-nexus-roadmap/) outlines a transition from testnet infrastructure to a fully operational financial L1, with staged activation of validators, exchange functionality, and protocol-level financial primitives.\n\n### Q1 2026: Network Activation\n\nThe first milestone in 2026 is under active development and will center on network coordination and exchange readiness. [Community Genesis](https://blog.nexus.xyz/tag/community/) will onboard validators, operators, and early participants, marking the shift from a development-driven network to a validator-secured environment.\n\n### Q2 2026: Mainnet EVM Launch\n\nIn Q2 2026, the Nexus L1 mainnet is expected to go live. This milestone will establish a production settlement layer with secure execution and finalized consensus. Bridges and onramps will become operational, allowing external capital to enter the ecosystem.\n\nThis stage will formalize validator participation and transition the EVM environment from testnet to persistent infrastructure. Applications will be able to deploy into a stable environment with deterministic finality and integrated access to NexusCore co-processors. The focus will shift from experimentation to economic durability.\n\n### Q3 2026: Exchange Mainnet\n\nFollowing L1 activation, the Nexus Exchange will launch on mainnet. This will mark the operational start of Nexus as a functioning financial network rather than solely an infrastructure layer. The exchange is designed to deliver CEX-like performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nLive trading will introduce continuous order flow, real margin enforcement, oracle updates under production conditions, and full interaction between execution, verification, and consensus layers. Liquidity depth, liquidation behavior, and proof performance will become measurable under sustained market activity.\n\nBeyond launch milestones, Nexus will continue to evolve its core architecture. Development efforts will focus on improving zkVM performance, expanding co-processor capabilitiesand broadening supported asset classes such as 24/7 equities, FX, commodities, and indexes.\n\nThe long-term objective will be to extend protocol-level financial infrastructure across additional markets, collateral models, and composable applications. This phase will prioritize improvements in proof efficiency, execution reliability, and validator robustness to support sustained financial activity.\n\n## Closing Summary\n\nNexus represents an architectural bet: that high-performance financial infrastructure should not be simulated through smart contracts, but embedded directly into the base layer and verified cryptographically.\n\nIts three-layer design separates execution, proof generation, and consensus, allowing each to scale independently. The dual-execution model formalizes a distinction between programmable logic and performance-critical financial engines. NexusCore handles deterministic, latency-sensitive computation, while NexusEVM preserves composability and developer accessibility. The zkVM anchors the system with verifiable computation, shifting validation from re-execution to proof verification.\n\nWith mainnet and exchange deployment in 2026, Nexus shifts from infrastructure buildout to market validation, where liquidity formation, oracle reliability, and proof-generation efficiency will determine long-term viability. Central to achieving market validation are USDX, the native U.S. dollar stablecoin of the Nexus ecosystem, and the Nexus Exchange, a non-custodial, central limit order book (CLOB) embedded directly into Layer 1 (L1). USDX inverts the extractive model of the largest stablecoins USDT and USDC, whose issuers capture all reserve yield as profit for infrastructure and compliance. Nexus streams USDX yield directly to users and builders on the L1 via the fully transparent Global Yield Distribution System (GYDS). The Nexus Exchange is designed to deliver CEX-parity performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nBy integrating matching, margining, liquidation, and oracle logic at the protocol level, Nexus reduces overhead and execution uncertainty inherent in contract-based exchange designs. The tradeoff is structural: financial logic becomes part of the base layer, increasing the importance of validator coordination and disciplined protocol governance.\n\nUltimately, the success of Nexus will not be measured by throughput alone, but by whether protocol-level financial primitives can operate reliably under live market conditions while maintaining deterministic settlement and cryptographic accountability.", "hook": "Nexus embeds high-performance financial engines directly into the protocol through its co-processor model, moving exchange, margin, and liquidation logic from contract-level simulation into native execution.", "publishDate": "2026-03-31T14:00:00Z", "readingTimeInMinutes": 14.376666666666667, "slug": "understanding-nexus-a-comprehensive-overview", "subscriptionTier": "free", "summary": "The dual-execution architecture allows performance-critical financial workloads and programmable smart contracts to operate in parallel, avoiding the typical tradeoff between latency and composability. The Nexus zkVM anchors execution to cryptographic proofs rather than full validator re-execution, positioning proof verification as the primary mechanism for scalable correctness. With mainnet and exchange deployment in 2026, Nexus shifts from infrastructure buildout to market validation, where liquidity formation, and proof-generation efficiency will determine long-term viability. Central to achieving market validation are USDX, the native U.S. dollar stablecoin of the Nexus ecosystem, and the Nexus Exchange, a non-custodial, central limit order book (CLOB) embedded directly into the Nexus Layer 1 (L1).", "tags": [ { "id": "2df3c948-022e-4a95-9ecf-d2ddca4c40f3", "name": "Protocol Overview" } ], "title": "Understanding Nexus: A Comprehensive Overview", "previewImage": "https://cdn.sanity.io/images/2bt0j8lu/production/6c006611ca5148c732fac20be7f0f8ecc6641368-6400x3600.png" } ], "metadata": { "limit": 10, "page": 1, "totalRows": 2, "totalPages": 1 } } } }, "description": "Default response" }, "400": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Bad Request" }, "403": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Forbidden" }, "404": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "No reports found" }, "500": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Internal Server Error" } }, "security": [ { "apiKey": [] } ], "summary": "Get basic research reports", "tags": [ "research/Research Reports" ] } }, "/research-basic/v1/basic/reports/{reportId}": { "get": { "description": "Returns a basic research report by its report ID.", "operationId": "getBasicResearchReport", "parameters": [ { "in": "path", "name": "reportId", "required": true, "schema": { "format": "byte", "type": "string" } } ], "responses": { "200": { "content": { "application/json": { "schema": { "properties": { "data": { "$ref": "#/components/schemas/ResearchReport" }, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Default response" }, "400": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Bad Request" }, "403": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Forbidden" }, "404": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Report does not exist for reportId" }, "500": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Internal Server Error" } }, "security": [ { "apiKey": [] } ], "summary": "Get a basic research report by report ID", "tags": [ "Research Reports" ] } }, "/research/v1/reports": { "get": { "description": "Returns a list of research reports based on filters like asset ID and tags", "operationId": "getResearchReports", "parameters": [ { "in": "query", "name": "limit", "description": "Limit must be less than or equal to 1000", "schema": { "format": "int64", "type": "integer", "default": 10 } }, { "in": "query", "name": "page", "schema": { "format": "int64", "type": "integer", "default": 0 } }, { "in": "query", "name": "assetId", "description": "Example: `4515ba15-2719-4183-b0ca-b9255d55b67e`", "schema": { "format": "byte", "type": "string" } }, { "in": "query", "name": "tags", "description": "Example: `stablecoins`, `defi`", "schema": { "items": { "type": "string" }, "type": "array" } } ], "responses": { "200": { "content": { "application/json": { "schema": { "properties": { "data": { "items": { "$ref": "#/components/schemas/ResearchReport" }, "type": "array" }, "error": { "type": "string" }, "metadata": { "$ref": "#/components/schemas/Pagination" } }, "required": [ "data" ], "type": "object" }, "example": { "error": null, "data": [ { "id": "16d6619b-9416-46cc-8fd2-13fdcd9bae2b", "createdAt": "2026-04-06T23:37:35Z", "updatedAt": "2026-04-07T16:00:58Z", "assetIds": [ "2023433a-23f4-4901-822d-a537b0c71676" ], "assets": [ { "id": "2023433a-23f4-4901-822d-a537b0c71676", "name": "Toncoin", "symbol": "TON", "slug": "the-open-network" } ], "authors": [ { "id": "872be9a6-e5d6-47c4-ac6d-95bb1720adf9", "name": "Whynonah", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/8ac8076d5648490dd40511ab3b81c602a03be811-681x793.jpg?w=100", "linkedinUrl": "" }, { "id": "2b10859c-dd75-472e-afde-1d1df4d2f576", "name": "Jonny Kreiser", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/5f0238a98921e3b37e6b3034ebe88c6561fd393c-400x400.jpg?w=100", "linkedinUrl": "" } ], "content": "## **Key Insights**\n\n* **Toncoin (TON) functions as the network\u2019s core execution asset (i.e., paying gas, supporting DeFi liquidity, securing Proof-of-Stake consensus, and acting as a settlement layer)** and as the foundation of Telegram's in-app economy.\n* **2025 activity shows TON shifting from early-year viral surges into a steadier baseline** (~100K\u2013150K daily active users and ~1.5\u20132.5 million daily transactions).\n* **TON\u2019s ecosystem** is evolving into a Telegram-native financial stack, with stablecoins, yield products, and RWAs increasingly embedded in wallets and mini-apps; **highlighted by xStocks, Ethena, Tether, Affluent, and liquidity routing via STON.fi + Omniston.**\n* **TON's 2026 roadmap pivots from infrastructure refactoring to performance and developer accessibility**. Catchain 2.0 targets sub-second finality, the Rust Node reimplements the validator stack, and a unified developer layer that includes developer kits for smart contracts, apps, wallets and payments.\n* **TON is emerging as a native infrastructure layer for AI** inside Telegram, with Cocoon providing decentralized compute, AgentKit connecting autonomous agents to onchain actions, and vibe-coding workflows enabling builders to quickly generate and share working prototypes.\n\n## **Introduction**\n\nConsumer crypto adoption typically breaks down into two bottlenecks: distribution and cost/latency. Most blockchains rely on standalone wallets and browser-based dApps, creating multi-step onboarding funnels that deter mainstream users. Even when infrastructure works, blockchain interactions often feel slow, expensive, or fragmented compared to Web2 applications; particularly in consumer use cases like payments, gaming, and social applications, where users expect instant feedback and low friction.\n\nTON\u2019s thesis is that mass adoption requires both scalable infrastructure and native distribution. At the base layer, TON is built as a dynamically sharded Proof-of-Stake (PoS) network with asynchronous smart contracts, allowing parallel execution and horizontal scalability. Rather than relying solely on high single-chain throughput, TON\u2019s architecture is designed to maintain stable performance under load. Complementing the Layer-1 are native protocol services, including (i) [TON DNS](https://dns.ton.org/) (human-readable \u201c.ton\u201d names), (ii) [TON Storage](https://docs.ton.org/foundations/services#ton-storage) (decentralized file storage), (iii) [TON Payments](https://docs.ton.org/foundations/services#ton-payments) (payment channels), (iv) [TON Proxy](https://docs.ton.org/foundations/services#ton-proxy) (censorship-resistant routing), (v) [TON Sites ](https://ton.org/en/ton-sites)(decentralized websites), and (vi) [Tolk](https://docs.ton.org/languages/tolk/overview#tolk-language) (smart contract language), and (vii) [AppKit](https://docs.ton.org/ecosystem/appkit/overview) (an all-in-one SDK for building Telegram Mini Apps with TON), which together form a vertically integrated blockchain stack with easy developer tooling.\n\nWhat differentiates TON is its distribution and tight integration with [Telegram](https://telegram.org/). [**TON Wallet**](https://wallet.tg/ton), natively embedded in the messenger, allows users to transact onchain without leaving the app. [**TON Connect**](https://docs.ton.org/ecosystem/ton-connect/overview), the wallet-connection protocol for **Telegram Mini Apps (TMAs)**, opens this to any compatible third-party wallet, though TON Wallet remains unique as Telegram's built-in wallet. Combined with in-chat app distribution, the result is onchain actions that feel like normal in-app behaviour, collapsing the traditional crypto UX stack into a single consumer environment.\n\n[Website](https://ton.org/en) / [X (Twitter)](https://x.com/ton_blockchain) / [LinkedIn](https://www.linkedin.com/company/ton-blockchain)\n\n\n\n## **Background**\n\nTON was founded in 2018 as the \u201cTelegram Open Network\u201d by Telegram co-founders [Pavel Durov ](https://x.com/durov?lang=en)and [Nikolai Durov](https://x.com/Kolja_Durov?lang=en), and raised $1.7 billion across two private token sales in February\u2013March 2018 to fund development. In October 2019, [the](https://aurum.law/newsroom/telegram-ton-1-7-bill-raise-sec-decentralization-the-legal-tale-and-insights) U.S. Securities and Exchange Commission (SEC) filed an emergency action against Telegram alleging an unregistered token offering, and Telegram ultimately ceased active involvement in May 2020. Development continued through the community-led \u201cNewton\u201d effort initiated by [Anatoliy Makosov](https://x.com/anatoly_makosov) and Kirill Emelyanenko, and in May 2021, the community voted to formalize governance under the TON Foundation and promote the V2 testnet into TON Mainnet.\n\nFollowing the community relaunch, TON attracted additional strategic and private investment. Since 2022, TON has [completed](https://messari.io/project/the-open-network/fundraising/funding) eight additional funding rounds, with at least three publicly disclosed raises totaling $50 million ($10 million from [DWF Labs](https://messari.io/organization/dwf-labs) in 2022, $30 million in a private sale backed by Foresight Ventures and Bitget in 2024, and $10 million in a strategic investment from [Gate](https://messari.io/organization/gate-io) in 2024).\n\nSince 2022, TON has attracted significant institutional backing. In [March 2025](https://www.tradingview.com/news/cointelegraph:d27a07a06094b:0-venture-capital-firms-invest-400m-in-ton-blockchain/), the TON Foundation disclosed that a group of investors, including Sequoia Capital, Pantera Capital, and Ribbit Capital, collectively purchased over $400 million in Toncoin. Combined with earlier rounds and subsequent investments from Coinbase Ventures, Pantera Capital, and others, publicly confirmed capital inflows exceed $550 million. Later in [August 2025](https://cryptoslate.com/verb-secures-558m-to-become-first-ton-treasury-vehicle-plans-ton-strategy-rebrand/), two publicly traded Toncoin treasury vehicles, [TON Strategy Co.](https://cryptoslate.com/verb-secures-558m-to-become-first-ton-treasury-vehicle-plans-ton-strategy-rebrand/) and [AlphaTON Capital](https://decrypt.co/news-explorer?pinned=1150165&title=portage-biotech-rebrands-as-alphaton-capital-corp-invests-100m-in-ton-digital-asset-treasury), have also launched, modeled on MicroStrategy's BTC accumulation strategy.\n\nIn [March 2025](https://www.tradingview.com/news/cointelegraph:d27a07a06094b:0-venture-capital-firms-invest-400m-in-ton-blockchain/), TON Foundation disclosed that a group of investors - including Sequoia Capital, Ribbit Capital, Benchmark, Draper Associates, Kingsway Capital, Vy Capital, Libertus Capital, CoinFund, SkyBridge, Hypersphere, and Karatage - collectively purchased and held $400 million in Toncoin. Pantera Capital, which has called Toncoin its largest single investment to date, reportedly deployed over $100 million. In [August 2025](https://www.theblock.co/post/366414/coinbase-ventures-buys-ton-tokens-directly-from-telegram-says-ton-foundation-exec), Coinbase Ventures purchased Toncoin directly from Telegram as a long-term venture position. In total, publicly confirmed capital inflows into TON exceed $550 million since 2022 across at least ten discrete investment events.\n\nA later turning point came through renewed alignment with Telegram distribution. In September 2023, the TON Foundation [announced](https://wublock.substack.com/p/ton-ecosystem-overview-deep-integration) a partnership with Telegram, aiming to integrate and promote the TON ecosystem for Telegram\u2019s userbase. Thanks to this partnership, Telegram natively integrated a crypto wallet known as @Wallet, supported TON Sites in an in-app browser, and issued Fragment collections (usernames, collectable numbers, and gifts) on TON.\n\nA later turning point came through renewed alignment with Telegram distribution. In January 2025, TON [became](https://www.prnewswire.com/news-releases/ton-foundation-expands-partnership-with-telegram-as-ton-becomes-the-exclusive-blockchain-for-telegrams-mini-app-platform-302356251.html#:~:text=Jan%2021%2C%202025%2C%2010:,950%20million%20monthly%20active%20users.) the exclusive blockchain infrastructure for Telegram\u2019s Mini App platform, with TON Connect positioned as the standard wallet connection method and Toncoin (TON) serving as the exclusive cryptocurrency for non-fiat payments across Telegram services (e.g., Stars, Premium, Ads). This shifted TON to a technically differentiated L1 focused on consumer distribution, with Telegram serving as its primary onboarding and application surface.\n\nToday, TON is maintained through a foundation and open-source contributors, so leadership is best understood through its public-facing executives and operating entities rather than a single corporate team. Makosov and Emelyanenko are cited as founding/core members of the TON Foundation. [Steve Yun](https://www.linkedin.com/in/steve-yun/) served as President of the TON Foundation Council and later launched the $100 million ecosystem venture fund, [TVM Ventures](https://www.linkedin.com/company/tvm-ventures/), in February 2025, while remaining on the board. [Maximilian Crown](https://www.linkedin.com/in/maxcrown/) was appointed CEO in April 2025 and later President in August 2025, with prior experience as a [MoonPay](https://www.moonpay.com/) co-founder (CFO/COO).\n\n\n\n## **Technology**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/972584fb3a7b024c29dea31c96fd5ba87c03268a-1600x867.jpg?w=800)\n\nTON\u2019s architecture is commonly described as a \u201cblockchain of blockchains.\u201d Instead of relying on a single monolithic chain, TON is built as a hierarchical system in which a top-level chain coordinates with multiple parallel chains, which can be further subdivided. This structure is designed to enable scalability at the consumer scale while maintaining interoperability and shared security. At a high level, TON consists of three core components: (i) the masterchain, (ii) the workchains, and (iii) the shardchains, which are explained below in more detail.\n\n### **Architecture**\n\n#### **Masterchain**\n\nThe masterchain is the top-level coordinating chain. It does not process regular user transactions. Instead, it maintains critical network state, including (i) network configuration parameters, (ii) the validator set and their stakes, and (iii) references to the latest finalized blocks of all workchains and shardchains. In simple terms, the masterchain acts as the global source of truth for the TON network, ensuring consistency and finality across all parallel chains.\n\n#### **Workchains**\n\nWorkchains operate in parallel under the coordination of the masterchain. Each workchain can, in theory, define its own rules (e.g., virtual machine, token standards, or execution logic) while remaining interoperable within the TON ecosystem. The architecture theoretically supports up to 2\u00b3\u00b2 workchains, though in practice, only the base workchain is currently active in most production contexts. The workchain layer enables long-term flexibility, allowing TON to support specialized environments without fragmenting security.\n\n#### **Shardchains**\n\nFrom there, each workchain can be split into shardchains, i.e., smaller partitions of the network state. Sharding allows transactions and smart contract execution to be processed in parallel across multiple shards rather than sequentially on a single chain. TON\u2019s design theoretically supports up to 2\u2076\u2070 shardchains per workchain, although the network dynamically creates and merges shards as needed. The defining feature of TON\u2019s scalability model is dynamic sharding. Rather than permanently fixing the number of shards, shardchains split automatically under high load to increase processing capacity and merge when activity declines, reducing unnecessary overhead. This allows network capacity to expand or contract in response to real-time demand. The goal is to maintain stable performance and predictable transaction times even as user activity scales to consumer levels.\n\n#### **Consensus**\n\nTON uses a Proof-of-Stake (PoS) consensus model. Validators are selected based on the amount of TON staked and participate in block production and validation. Consensus is achieved using a Byzantine Fault Tolerant (BFT) protocol called Catchain, which is specifically designed to operate efficiently in a sharded environment. Catchain enables validators to coordinate across shards while preserving security and finality guarantees.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/bcd958d7d07d39294a656df30a0fa6bf9d9b60ff-1600x872.jpg?w=800)\n\nTON Core is [releasing Catchain 2.0](https://t.me/toncore/99), a consensus upgrade targeting sub-second finality to bring the onchain experience closer to Web2 responsiveness. The upgrade reduces block intervals from ~2.5s to 200\u2013400ms, delivers roughly 2.5\u20135x throughput improvement, and cuts finalization lag from ~10s to ~1s.\n\nDevelopment is complete: the testnet, updated on January 23, 2026, has been running stably at ~450ms block intervals with ~1\u20132s finalization. Mainnet validators were updated on February 12, 2026 with the Catchain 2.0 code and accelerated network layer, though activation remains dormant pending final testnet validation.\n\n### **Validators**\n\nWithin the above architecture, there are two primary roles: (i) Validator and (ii) Nominators.\n\nValidators [secure](https://ton.org/en/validators) TON\u2019s PoS network by staking Toncoin to participate in block production and validating transactions across shardchains. Operators must run high-performance, highly available infrastructure and stake a minimum of 300,000 TON to enter validator elections, though winning typically requires ~700,000 TON or more, depending on competition and the cycle's validator cap. Validators stake for a fixed validation term, with stake and rewards returned after the round completes.\n\nValidators [earn rewards](https://docs.ton.org/v3/documentation/nodes/validation/staking-incentives) from (i) transaction fee surpluses (users attach small extra Toncoin amounts as validator incentives) and (ii) newly issued Toncoin with proportional distribution based on stake weight. Validators can be [penalized](https://docs.ton.org/v3/documentation/smart-contracts/contracts-specs/governance) in two ways: (i) idle behavior: If a validator fails to participate in block creation or transaction signing during a validation round, it may be fined; and (ii) malicious misbehavior, where any network participant can submit a complaint with cryptographic proof to the [Elector contract](https://docs.ton.org/v3/documentation/smart-contracts/contracts-specs/governance). Validators vote on the complaint, and if 66.0% of validators approve, a slashing penalty is deducted from the validator's stake. To receive rewards, a validator must successfully (i) win election into a validation cycle, and (ii) validate blocks throughout the entire cycle without being penalized.\n\n[Nominators](https://docs.ton.org/v3/documentation/smart-contracts/contracts-specs/nominator-pool), on the other hand, (i) delegate TON to validators, and (ii) share in staking rewards. They do not operate the infrastructure directly. The cited minimum delegation amount is ~10,000 TON. Nominators increase validator stake weight and help decentralize participation in consensus.\n\nBeyond direct nomination, [pooled staking](https://docs.ton.org/ecosystem/staking/overview) services such as TON Whales, Kiln, ChorusOne, and P2P aggregate smaller stakes to meet validator thresholds. Alternatively, [liquid staking](https://docs.ton.org/ecosystem/staking/overview) protocols (Tonstakers, KTON, bemo, Hipo) issue transferable receipt tokens that let holders earn staking rewards while keeping capital liquid across DeFi.\n\n### **AI**\n\nTelegram is emerging as a native interface for AI agents, with TON positioning itself as the settlement and infrastructure layer for this convergence.\n\n[Cocoon](https://cocoon.org/) (Confidential Compute Open Network) is a decentralized AI compute network built on TON, [announced](https://x.com/durov/status/1995208789600182391?lang=en) by Pavel Durov at Blockchain Life 2025 and launched on mainnet in December 2025. GPU owners contribute computing power and earn Toncoin, while user data remains encrypted throughout execution via Trusted Execution Environments (TEEs). Telegram already routes lightweight AI operations through Cocoon, including message translation and summarization, with heavier workloads such as media processing and conversational assistants planned next. With Telegram's 1B+ user base as built-in distribution and Telegram\u2019s recent efforts to simplify the creation of [agentic products](https://telegram.org/blog/ai-editor-mighty-polls-and-more), Cocoon represents one of the most significant real-world deployments of decentralized AI compute to date.\n\nTelegram's bot infrastructure has also evolved toward AI-native use cases. In early 2026, Telegram shipped [streaming responses for bots](https://t.me/BotNews/113) (purpose-built for AI assistants) and threaded conversations for multi-topic chats. Third-party traction reinforces the direction: OpenClaw, the most popular self-hosted AI assistant framework, defaults to Telegram as its messaging layer. Additionally, a [Telegram developer](https://x.com/steipete/status/2037197024081195188) became its new maintainer. [BotFather](https://identityhub.app/blog/telegram-default-ai-interface), Telegram's built-in tool for creating and configuring bots, reached 7.3M monthly active users (MAUs) by early 2026, more than doubling from 3.5 million in January 2025. Combined with native Toncoin withdrawal support for bot earnings, these updates tighten the economic link between Telegram's bot ecosystem and the TON network.\n\nTON's deeper integration with onchain AI agents remains at an earlier stage. To accelerate development, TON Foundation is running dedicated [AI contests](https://identityhub.app/contests) to bootstrap tooling and adoption.\n\n## **Putting It All Together**\n\nThe components described above (i.e., masterchain coordination, dynamic shardchains, asynchronous smart contracts, TVM execution, cell-based data storage, and hypercube routing) operate within a broader multi-layer architecture designed for consumer-scale usage inside Telegram. Rather than functioning as a single monolithic execution engine, TON operates as an interconnected system composed of: (i) User Interface Layer, (ii) Application Layer, (iii) Execution Layer, (iv) Routing & Sharding Layer, (v) Consensus Layer, (vi) Validator Infrastructure Layer, (vii) Indexing & API Layer, (viii) Storage & Data Layer. Together, these layers allow TON to support real-time financial interactions embedded directly inside Telegram\u2019s social graph.\n\nFor example, consider a user sending USDT to a friend inside Telegram:\n\n* The transaction begins inside the Wallet in Telegram. The user enters an amount and taps send. The experience feels identical to sending a message.\n* The wallet constructs a Jetton (TEP-74) transfer transaction. Because TON uses an asynchronous model, a message is sent to the sender\u2019s USDT contract, which then sends a follow-up message to the recipient\u2019s wallet contract.\n* The TON Virtual Machine executes the smart contract logic:\n * Validates balances\n * Deducts TON for gas\n * Updates Jetton balances\n * Emits internal messages\n * Each contract runs independently\n* If the sender and receiver reside on different shardchains, the message is routed using Hypercube Routing. Rather than broadcasting globally, the system calculates the shortest path between shards, minimizing latency.\n* If network load increases, shardchains may automatically split to distribute execution load. This is TON\u2019s \u201cinfinite sharding\u201d in action.\n* Validators on the relevant shardchain produce and validate the block. The masterchain later finalizes shard references to ensure global consistency.\n* Collators assemble transactions while validators confirm them, enabling parallelization and improved stability.\n* Toncenter APIs and indexers immediately update transaction status. Wallets can display \u201cpending\u201d and then a confirmed state using trace APIs and action parsing.\n* All state changes are stored in TON\u2019s cell-based structure and packaged into a Bag-of-Cells (BoC), ensuring compact storage and verifiable hash-linked data.\n\nTo the user, this entire multichain, asynchronous, routed, validated process appears as a simple chat-based transfer.\n\n\n\n## **Toncoin (TON Token)**\n\n### **Token Functions**\n\nAs the project\u2019s documentation outlines, Toncoin is a native coin of the TON blockchain. It serves several key functions within the network, including:\n\n* **Paying for network execution:** Toncoin is required to execute transactions (e.g., asset transfers and swaps), with fees paid in Toncoin and designed to remain low for consumer-scale usage.\n* **Securing the network:** Validators stake Toncoin to participate in PoS consensus and earn rewards, with penalties for downtime or misbehavior. Nominators can delegate Toncoin to share in validator staking rewards.\n* **Telegram in-app economy:** Telegram uses TON as its blockchain layer for ownership, transfers, and payouts. Toncoin serves as the payment rail for collectible usernames, SIM-less phone numbers, and collectible gifts - all of which are onchain assets. Creator earnings from ads and in-app purchases (for channel authors, bot developers, and mini-app owners) are withdrawn exclusively via **Fragment.com** in Toncoin. Toncoin is also the currency for purchasing ads on the **Telegram Ads** platform.\n* **Storage of blockchain data:** Toncoin is required to maintain smart contracts onchain, where validators charge storage rent proportional to the data held. For larger files, TON Storage provides a decentralized persistence layer where storage providers are paid in Toncoin and must cryptographically prove file integrity to claim rewards.\n\n### **Tokenomics**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/b2151ab671ef344c39124f5876bbcaaa1af85962-1600x868.jpg?w=800)\n\nThe initial TON supply of 5 billion tokens was placed into [20](https://ton.org/en/mining) Proof-of-Work Giver smart contracts and mined permissionlessly between July 2020 and June 2022. Since the PoS transition (June 28, 2022), new TON is minted via validator block rewards (~0.5\u20130.7% annually). The current total supply is ~5.16 billion TON. At [$1.33](https://www.coingecko.com/en/coins/toncoin) (Mar. 26, 2026), this implies a fully diluted valuation (FDV) of ~$6.9 billion. Note: TON has no max supply cap.\n\nThe pie chart above depicts the current supply distribution of ~5.15 billion Toncoin as of March 2026, broken into 14 categories. For simplicity, these can be grouped into four macro buckets:\n\n* **Freely Circulating:** ~48% (~2.46B TON). Includes Regular Wallets, Staking (Elector), Centralized Exchanges, CEX Custodial, DeFi, Smart Contracts & Others, Uninit Wallets, TON Ecosystem Reserve, TON Foundation, and Other Labeled.\n* **TON Believers Fund:** 25% (~1.32B TON). A voluntary lockup where existing holders deposited tokens into a [Locker smart contract](https://github.com/ton-blockchain/locker-contract) (Jul\u2013Oct 2023). Now vesting in 36 monthly installments (~36.6M TON/month) through Oct 2028. As of March 2026, 6 of 36 periods have been completed; actual claim rates have been low, with only a fraction of unlocked tokens withdrawn so far. [Onchain data.](https://tonviewer.com/UQDtFpEwcFAEcRe5mLVh2N6C0x-_hJEM7W61_JLnSF74p9dz)\n* **Frozen Inactive Miners:** 20.9% (~1.08B TON). 171 addresses that mined TON during the PoW phase but never transacted. [Frozen by community governance vote](https://blockworks.co/news/ton-governance-votes-to-freeze-20-of-its-ton-supply) (Feb 2023) for 48 months. After expiration (~Feb 2027), owners must manually activate, and many keys are likely lost. The community could vote to extend the freeze or burn these tokens before expiration, though no formal proposal has surfaced as of this writing. [Address list.](https://tontech.io/stats/#/early-miners)\n* **Telegram:** ~6% (~327M TON). Tokens held by Telegram, plus ~21M in vesting contracts deployed to team members and partners (1,440-day vesting, 360-day cliff). Sell pressure from vesting recipients has been negligible thus far.\n\n### **Token Vesting**\n\n[Unlock schedules](https://defillama.com/unlocks/ton) for the parties mentioned above include:\n\n* **IPoW Mining (Premine):** Fully mined and distributed. The original ~5B TON was mined from [20 Giver contracts](https://ton.org/en/mining) between July 6, 2020, and June 28, 2022. Mining was permissionless with a variable rate based on PoW difficulty, not a linear release schedule. No further unlocks.\n* **TON Believers Fund:** Unlocks through 36 fixed monthly releases of ~36.59 million TON/month (~2.8% of the fund). As of March 2026, 6 of 36 periods have been completed; 30 periods remain (~1.098 billion TON still to unlock through ~Oct. 2028).\n* **Frozen Inactive Miners:** The 48-month [freeze](https://blockworks.co/news/ton-governance-votes-to-freeze-20-of-its-ton-supply) on 171 addresses (~1.081 billion TON) expires around Feb. 2027. This does not mean tokens enter circulation: these wallets have never transacted, owners must manually activate them, and many keys are likely permanently lost. The TON community could also vote to extend the freeze or burn these tokens before expiration. [Address list.](https://tontech.io/stats/#/early-miners)\n* **[Vesting contracts](https://github.com/ton-blockchain/vesting-contract):** Use a 1,440-day schedule with a 360-day cliff. Most early contracts have already fully vested; remaining contracts continue vesting at ~3.45M TON/month (per CEX listing model).\n* **PoS Emission (Inflation):** Ongoing, perpetual issuance at[ ~73,000\u201397,000 TON/day](https://www.tonstat.com/) (1.7 TON per masterchain block + 1.0 TON per basechain block). 50% of transaction fees are [burned](https://dune.com/ton_foundation/staking).\n\n### **Governance**\n\nTON's governance spans three layers: validators, core development, and ecosystem coordination.\n\nAt the protocol layer, approximately 400 validators distributed across 40 countries, with over 450M Toncoin staked, govern upgrade decisions directly. Any change to network parameters or consensus rules must pass an onchain vote among active validators, ensuring no single entity can push through protocol changes unilaterally. According to Chainspect, TON ranks 3rd among Layer-1s by Nakamoto coefficient, placing it among the most decentralized Proof-of-Stake networks.\n\nTON Core, the network's core development arm, maintains the TON node software, ships protocol upgrades, and builds node tooling. The TON Foundation, a non-profit dedicated to the ecosystem's long-term growth, provides grants, resources, and technical support to projects building on TON.\n\nBeyond these two bodies, a growing set of independent teams contributes to infrastructure and developer tooling. TonTech, an engineering team supported by the TON Foundation, maintains core developer primitives including AppKit, AgentKit, WalletKit, and TON Connect. RSquad, a blockchain development team active in the TON ecosystem since its early days, has contributed critical infrastructure, including the Rust TON Node, TON Pay, and TON Teleport, a trustless cross-chain bridge for asset transfers between TON and external networks.\n\n## **TON Ecosystem**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/90ef2406fbeb86c2ab37eeda22a4a75ff7fe5b39-1600x1093.jpg?w=800)\n\n### **Partners and Projects**\n\nKey projects that highlight the variety of benefits the TON ecosystem and blockchain provide:\n\n* **[The Open Platform (TOP)](https://top.co/):** The largest Web3 product development company within the Telegram ecosystem, building and investing in infrastructure and consumer applications on TON. TOP's portfolio includes Wallet in Telegram, Tonkeeper, STON.fi, and Getgems, and the company reached a [$1 billion valuation](https://www.theblock.co/press-releases/361030/the-open-platform-is-first-unicorn-in-web3-ecosystem-in-telegram-at-1bn-valuation) in 2025 after raising over $70 million from Ribbit Capital, Pantera Capital, and others.\n* **[Wallet in Telegram](https://wallet.tg/ton):** A crypto wallet natively integrated into Telegram, developed by TOP, supporting both custodial and self-custodial modes dependent on region. It serves as the primary onramp for Telegram's 1B+ user base, enabling in-chat transfers, Toncoin purchases, and direct access to Telegram Mini Apps without leaving the messenger.\n* **[Tether (USDT)](https://tether.to/):** The dominant stablecoin on TON by circulating supply and the default asset for payments and most DeFi activity across the ecosystem. TON currently holds roughly [$1.28 billion in stablecoins](https://defillama.com/stablecoin/tether), with USDT serving as the primary settlement unit for wallets, DEXs, and merchant payments.\n* **[Ethena](https://ethena.fi/):** Introduced synthetic yield-bearing digital dollars (USDe and sUSDe) into TON's Telegram-native DeFi stack, expanding stablecoin use cases beyond payments into passive yield products. Eligible users holding [tsUSDe](https://blog.ton.org/ethena-ton-foundation-usde-on-ton) in a TON wallet earn boosted yields, with plans for neobanking and peer-to-peer payments powered by Ethena within Telegram.\n* **[xStocks](https://www.ton.org/en/x-stocks-are-live-on-ton-real-world-stocks-now-on-chain):** Tokenized U.S. equities launched on TON, bringing real-world stock exposure (e.g., Apple, Tesla, Microsoft) directly into TON wallets with a self-custodial UX. The platform currently supports over 60 tokenized stocks and ETFs powered by [Backed Finance](https://www.coindesk.com/business/2026/03/10/kraken-s-tokenized-stock-venue-starts-points-program-hinting-at-possible-ecosystem-token/) under Kraken's institutional framework, with plans to expand to 500+ by end of 2026.\n* **[Fragment](https://fragment.com/):** Onchain marketplace integrated into Telegram where collectible usernames, SIM-less phone numbers, and digital gifts are minted and traded as NFTs powered by Toncoin. Fragment is the primary driver of TON's [#2 ranking in NFT trading volume](https://dune.com/ton_foundation/nft) behind Ethereum, with transaction activity tied directly to Telegram's social graph.\n\nOther notable projects building on TON include [Affluent](https://www.affluent.org/), [Bidask](https://bidask.finance/), [Boinkers](https://t.me/boinker_bot), [CapsGame](https://t.me/capsgamebot), [DeDust](https://dedust.io/), [Gamee](https://t.me/gamee), [Gatto](https://t.me/gattoton_bot), [Getgems](https://getgems.io/), [MyTonWallet](https://mytonwallet.app/), [RedStone](https://redstone.finance/), [Storm Trade](https://stormtrade.io/), [Swap Coffee](https://swap.coffee/), [TeleTON](https://teletonagent.dev/), [TONCO](https://tonco.io/), [Torch Finance](https://torch.finance/), [xRocket](https://t.me/xrocket_bot), and [Zargates](https://zargates.com/).\n\nRecent partnerships and integrations:\n\n* [**Mar. 31, 2026**](https://www.tradingview.com/news/cointelegraph:11581f704094b:0-dynamic-adds-embedded-wallet-infrastructure-to-ton-for-telegram-apps/): [Dynamic](http://www.dynamic.xyz) launched embedded wallet infrastructure for TON, letting developers automatically deploy wallets inside their apps and Telegram Mini Apps.\n* **[Mar. 26, 2026](https://blockchain.news/flashnews/walletconnect-integrates-with-ton-blockchain-for-seamless-connectivity):** [WalletConnect](https://walletconnect.com/) launched production support on TON, enabling standardized wallet connections across dApps and Telegram Mini Apps.\n* **[Feb. 17, 2026](https://www.theblock.co/post/390138/ton-foundation-osl-banxa-stablecoin-payments):** [TON Foundation](https://ton.foundation/en) partnered with OSL's Banxa to expand stablecoin payment infrastructure for Asia-Pacific merchants.\n* **[Jan. 7, 2026](https://x.com/ton_blockchain/status/2008966919530090821):** TON announced Toncoin support in [Atomic Wallet](https://atomicwallet.io/), expanding TON's reach into a multichain, non-custodial wallet user base.\n* **[Dec. 24, 2025](https://x.com/ton_blockchain/status/2003764859138199985):** [Fonbnk](https://www.fonbnk.com/) + [Tether](https://tether.to/) expanded USDt on Telegram Wallet, positioning mobile-money conversion as the core bridge for Africa-focused remittances and stablecoin banking flows.\n* **[Dec. 23, 2025](https://x.com/ton_blockchain/status/2003490653645246825):** [HoudiniSwap](https://houdiniswap.com/) launched private TON payments, allowing users to request payments without exposing wallet addresses or transaction history, with inbound support across 120+ chains.\n* **[Dec. 22, 2025](https://investors.shift4.com/news-events/press-releases/detail/288/shift4-launches-global-stablecoin-settlement-platform-unlocking-faster-payments-for-merchants):** [Shift4](https://www.shift4.com/) launched a global stablecoin settlement platform, unlocking faster payments for merchants.\n* **[Aug. 5, 2025](https://x.com/ton_blockchain/status/1952723911130456184):** [Zengo](https://zengo.com/) wallet added native Toncoin support, expanding TON's presence across non-custodial mobile wallets.\n* **Upcoming:** [Chainlink CCIP](https://chain.link/cross-chain) cross-chain interoperability integration (announced 2025, launch pending). [Revolut](https://www.revolut.com/) soft-launched TON support in select regions, with broader availability now live.\n* Toncoin is also listed on major U.S. exchanges, including [Robinhood](https://thedefiant.io/news/nfts-and-web3/robinhood-adds-toncoin-to-u-s-crypto-platform-ahead-coinbase-563a1ec6) (Aug. 2025), [Gemini](https://www.gemini.com/blog/toncoin-usdton-is-now-available-on-gemini) (Sep. 2025), and [Coinbase](https://www.businesswire.com/news/home/20251118274287/en/TON-Strategy-Company-Welcomes-Coinbases-Launch-of-$TON-Trading-Across-Global-Platforms) (Nov. 2025).\n\nFor a recap of category-specific ecosystem developments, please read the following [DeFi](https://blog.ton.org/defi-on-ton), [Institutional](https://blog.ton.org/institutions-on-ton), and [NFT](https://blog.ton.org/how-nfts-evolved-on-ton) reports.\n\n### **Network Metrics**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/bc2d8fe851fa2beb18fb54c218df48a61fb5422d-1600x868.jpg?w=800)\n\nTON\u2019s network activity in 2025 reflects a chain that has moved past the initial hype spike and is settling into a more durable, consumer-driven usage baseline. Daily active users peaked sharply in early 2025 (~600K), then normalized throughout the year, finishing Q4 2025 with ~1.0% QoQ growth and a relatively stable range of ~100K\u2013150K.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/5bffb8b96c5364c552301765703380535e272400-6400x3472.png?w=800)\n\nIn parallel, TON has sustained meaningful throughput, with daily transactions spiking above ~7 million during early 2025 surges, then stabilizing around ~1.5\u20132.5 million/day, with periodic bursts and an end-of-year lift similar to daily user data.\n\nTON's NFT market ranks [second only to Ethereum by trading volume](https://dune.com/ton_foundation/nft), driven largely by Telegram-native assets like collectible usernames, numbers, and gifts.\n\n## **Roadmap**\n\nOn Jan. 22, 2025, the TON Core team [published](https://t.me/toncore/6) its H1 2025 roadmap, centered on shipping the long-in-the-works \u201cAccelerator\u201d upgrade, an architecture-level refactor intended to better realize the sharded execution model described in the TON whitepaper and to keep performance stable as load scales. The roadmap prioritized (i) scaling and stability at the protocol layer, (ii) validator operability and resilience, and (iii) faster, more human-readable UX through better APIs and indexing.\n\nBuilding on the Accelerator foundation, TON's [2026 roadmap](https://ton.org/en/roadmap) shifts focus from the infrastructure-level refactoring of the Accelerator era toward developer accessibility and its top priority, sub-second finality. At the protocol layer, Catchain 2.0 targets sub-second block finalization, while the Rust Node brings institutional-grade operability and resilience to the validator set.\n\nOn the developer side, the roadmap prioritizes four workstreams: (i) smart contract tooling through [Tolk 1.3](https://docs.ton.org/v3/documentation/smart-contracts/tolk/overview) and toolchain, the successor language and SDK stack to FunC, offering TypeScript/Rust-inspired syntax and up to 40% lower gas costs; (ii) [AppKit](https://ton.org/dev/appkit), a unified application layer via development kits for apps, wallets, and payments ([TON Pay](https://ton.org/en/ton-pay-a-new-payments-layer)), compressing the path from idea to shipped Telegram Mini App; (iii) vibe-coding workflows that let developers describe an app to an AI agent and receive a working prototype, ready to share on Telegram; and (iv) AgentKit, an MCP-based toolkit giving autonomous AI agents structured access to wallets, transfers, and DeFi modules on TON.\n\n## **Closing Summary**\n\nTON is positioning itself as one of the few L1s explicitly engineered for consumer-scale adoption, not just DeFi-native throughput benchmarks. Its core bet is that mainstream crypto use breaks on two constraints, distribution and latency/cost, and that solving both requires more than a fast chain. TON\u2019s dynamically sharded, asynchronous architecture is designed to maintain stable performance under load, while its vertically integrated protocol services (DNS, Storage, Payments, Proxy, Sites) reduce reliance on third-party infrastructure. Most importantly, TON\u2019s deep integration with Telegram collapses the traditional crypto UX stack (wallet \u2192 browser \u2192 dApp) into a single messaging-native environment where onchain actions can feel like normal in-app behavior.\n\nIn 2025, TON shifted to a technically differentiated L1 focused on consumer distribution, with Telegram serving as its primary onboarding and application surface. The ecosystem has increasingly matured into a Telegram-native financial stack while network activity reflects a chain transitioning from hype-driven spikes to a steadier transactional baseline.\n\nLooking forward, TON's 2026 roadmap shifts from infrastructure refactoring to performance and developer accessibility. Catchain 2.0 targets sub-second finality, the Rust Node reimplements the validator stack, and a unified developer layer (Tolk, AppKit, TON Pay) compresses the path from idea to shipped Telegram Mini App. In parallel, Telegram is becoming a native interface for AI agents, with Cocoon providing decentralized compute and AgentKit connecting autonomous agents to onchain actions. If the vibe-coding loop works at scale, where builders generate working prototypes from a natural-language prompt, share them inside Telegram for instant feedback, and iterate daily rather than quarterly, TON becomes not just a settlement layer for digital finance inside Telegram, but the fastest path from idea to testable product in crypto.", "hook": "TON has quietly assembled the ingredients most Layer-1s lack: 1B+ captive users via Telegram, $550M+ in institutional capital, and a financial stack (stablecoins, tokenized equities, yield products) embedded directly in the messenger. This IoC covers the architecture, tokenomics, ecosystem, and 2026 roadmap driving TON's bet that consumer crypto adoption starts inside the chat window.", "publishDate": "2026-04-07T16:00:00Z", "readingTimeInMinutes": 21.80333333333333, "slug": "understanding-ton-a-comprehensive-overview", "subscriptionTier": "free", "summary": "TON is the only Layer-1 with native distribution inside a 950M MAU messaging app. This Initiation of Coverage breaks down the network's architecture, validator economics, DeFi ecosystem, tokenomics, and 2026 roadmap. At ~$6.9B FDV, the question is whether Telegram's user base converts into sustained onchain activity.", "tags": [ { "id": "8ef53cf6-d66a-48e3-bf0d-03da8cfdca14", "name": "Consumer" }, { "id": "9d1f93f6-d15c-40ea-b384-58c2a9419fd8", "name": "Layer-1" } ], "title": "Understanding TON: A Comprehensive Overview", "previewImage": "https://cdn.sanity.io/images/2bt0j8lu/production/cf321d93bc0b99464d29d02c79b4eda23941bfeb-6400x3600.png" }, { "id": "ce62bc98-3825-479a-b419-18b33d4ad5f0", "createdAt": "2026-04-02T20:16:42Z", "updatedAt": "2026-04-02T20:44:02Z", "assetIds": [ "9cc76ef5-f68f-45b3-930d-98af8f6513fc" ], "assets": [ { "id": "9cc76ef5-f68f-45b3-930d-98af8f6513fc", "name": "Sai", "symbol": "Sai", "slug": "sai-dot-fun" } ], "authors": [ { "id": "cbe1f170-343a-461c-abd3-9ceee66022b8", "name": "Eric Manoukian", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/d311e4315bfaa623b347b8ad6d1ce1e4f48023ff-400x400.jpg?w=100", "linkedinUrl": "" } ], "content": "## Key Insights\n\n* Sai is a perpetual decentralized exchange (perp DEX) built on Nibiru that launched publicly on Feb. 18, 2026. It offers up to 100x leverage with oracle-settled pricing and pools liquidity through Sai Liquidity Positions (SLPs) that back markets and absorb trader P&L.\n* The launch coincided with Let's Go Saicho, a $25,500 trading competition split into two phases. Phase 1 (Feb. 18 to March 4) rewarded the top 25 traders by percentage ROI with up to $20,000, and Phase 2 (March 5 to March 19) distributes $5,500 across volume-based tracks.\n* As of March 16, TVL reached $47,211, cumulative perp volume hit $6 million, and the platform collected $21,560 in fees. Open interest peaked at $549,628 on March 3, the same day volume reached its single-day high of $1.27 million.\n* Sai saw 134 unique traders, with 52.9% executing six or more trades. Returning traders accounted for 58.2% of Phase 2 daily activity. The liquidation rate dropped from 12.9% in Phase 1 to 6.7% in Phase 2 despite average leverage increasing from 33.1x to 44.2x.\n* The roadmap extends beyond perps: a white-label Perps-as-a-Service product, Sai Savings with ~5% yield on idle stables, automated strategy vaults, real-world asset markets, and a mobile application positioning Sai as trading infrastructure rather than an isolated venue.\n\n## Primer\n\n[Sai](https://sai.fun/) is a perpetual decentralized exchange (perp DEX) that aims to simplify, predict, and make leveraged trading more accessible. Users [connect](https://docs.sai.fun/guides/wallet-setup) to the application with standard EVM wallets, deposit collateral such as USDC or stNIBI, and trade perp markets through an interface that resembles a centralized futures exchange. They can open long or short positions, set up to 100x leverage on certain assets, and use familiar order types, including market, limit, stop, and conditional (stop-loss/take-profit) orders.\n\nSai was created by members of the Nibiru team with experience in distributed systems, infrastructure, and financial protocols. The creators are led by Nibiru founder and CEO [Unique Divine](https://www.linkedin.com/in/unique-divine/), who has a background in applied mathematics and machine learning, as well as prior experience at [IBM](https://www.ibm.com/us-en) and [Sommelier Protocol](https://somm.finance/).\n\nSai is built on [Nibiru](https://nibiru.fi/) Chain, a high-throughput Layer-1 with a unified EVM and [Wasm execution](https://nibiru.fi/docs/concepts/wasm/) environment. Nibiru combines an EVM-equivalent runtime ([Nibiru EVM](https://nibiru.fi/docs/evm/)) and a Wasm environment in a single state machine, allowing Solidity and Rust contracts to coexist, share accounts and gas, and call each other through built-in system contracts that bridge the two VMs. Its consensus layer, [Nibiru BFT](https://nibiru.fi/docs/concepts/arch/nibiru-bft/), is an evolution of [CometBFT](https://docs.cometbft.com/v0.38/), delivering fast finality and sub-two-second settlements. Alongside core modules for staking, governance, IBC, and a native oracle, this architecture provides Sai with the low-latency execution, deterministic settlement, and oracle support necessary to offer a CEX-like onchain derivatives platform. Sai\u2019s defining characteristic is its approach to pricing and risk: execution is anchored to decentralized oracles and backed by pooled vaults called Sai Liquidity Positions (SLPs), emphasizing consistent behavior across different market regimes.\n\n## Let\u2019s Go Saicho: The Trading Competition\n\nSai's [public launch](https://x.com/SaiDotFun/status/2024080216474497407?s=20) on Feb. 18, 2026, coincided with the start of [Let's Go Saicho](https://docs.sai.fun/resources/blogs/lets-go-saicho), a one-month trading competition designed to bootstrap both trading activity and platform liquidity. The competition runs through March 19 and distributes a $25,500 prize pool across two phases, each targeting a different type of trader behavior.\n\n### Phase 1: PnL Competition\n\n[Phase 1](https://docs.sai.fun/resources/blogs/lets-go-saicho#phase-1-pnl-competition-feb-18-march-4) ran from Feb. 18, 2026, to March 4, 2026, and allocated $20,000 to the top 25 traders ranked by percentage ROI rather than absolute profit. A trader who earned a 50% return on a $500 account could outrank a trader who earned 5% on a $50,000 account. Only closed positions counted toward PnL, and unrealized gains were excluded.\n\nEligibility thresholds scaled with rank. Traders competing for the top three positions needed at least $1 million in cumulative volume and $250 in profit. Ranks 4 through 10 required $50,000 in volume and $50 in profit, while ranks 11 through 25 required $50,000 in volume with no minimum profit. The prize distribution was structured as follows:\n\n* Rank 1: $6,250\n* Rank 2: $3,125\n* Rank 3: $1,250\n* Rank 4-10: $625 each\n* Ranks 11-25: $250 each\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/677eda723599cfbacb2cabeb0cb4263b0a68ad4c-2048x1262.png?w=800)\n\nNo [traders](https://app.sai.fun/leaderboard/) met the $1 million volume threshold required for the top three positions, so none of the top three prizes were distributed. The remaining prizes were awarded to qualifying traders in ranks 4 through 25.\n\n### Phase 2: Volume Competition\n\n[Phase 2](https://docs.sai.fun/resources/blogs/lets-go-saicho#phase-2-volume-based-march-5-march-19-live-now) ran from March 5, 2026, to March 19, 2026, and shifted the incentive from profitability to volume, distributing $5,500 across three tracks. The largest pool, $4,000, is shared among all traders who cross $50,000 in volume, with each trader's share proportional to their total volume. All activity from Phase 1 counts toward Phase 2 thresholds in this segment. A $1,000 pool is split evenly among the first 50 traders to reach $10,000 in Phase 2 volume, creating an early-mover incentive. A single $500 prize goes to the highest-volume trader in Phase 2.\n\nUnlike Phase 1, Phase 2 did not require profitability to qualify. The competition enforces rules against sybil attacks, wash trading, fake volume, and malicious bots. A minimum position holding time of 10 to 20 minutes applies during Phase 2 to discourage instantaneous round-trip trades designed to inflate volume. Winners are expected to be announced shortly.\n\n## Early Traction and Key Metrics\n\n### Volume\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/fb2f62edb191d86fbce3dd0899ea17d13e25cd33-2048x1111.png?w=800)\n\nCumulative [perpetual volume](https://defillama.com/protocol/sai?tvl=false) from Feb. 18, 2026, through March 16, 2026, reached $6 million. Phase 1 accounted for $3.1 million of that total, with the final three days of Phase 1 generating $2.4 million as traders pushed to lock in PnL rankings. Phase 2 volume through March 16, 2026, totaled $2.9 million across 12 days, a higher daily average than Phase 1's first 10 days but below the Phase 1 closing sprint. Volume spiked again on March 11, 2026, at $573,420 before tapering to $36,810 on March 16, 2026, the lowest daily figure since launch, as Phase 2 approached its final days.\n\n### TVL and Open Interest\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/3c755fdca31ba083fc327a184cdfd371da87b29c-2048x1178.png?w=800)\n\nAs of March 16, 2026, Sai's [total value locked](https://defillama.com/protocol/tvl/sai) (TVL) was at $47,210, up 14x from $3,380 on launch day. Growth came in two distinct waves. TVL held relatively steady between $3,200 and $4,400 during Sai's first week, then increased to $15,140 on Feb. 25, 2026, and climbed to $26,650 by Feb. 28, 2026, as early competition activity drew deposits. A second leg carried TVL from $29,120 on March 5, the start of Phase 2, to $47,210 by March 16, a 62% increase over 12 days, driven in part by new SLP deposits entering the platform after Phase 1 concluded.\n\n[Open interest](https://defillama.com/protocol/sai?openInterest=true) peaked at $549,630 on March 3, the same day perp volume hit its single-day high of $1.27 million. By March 16, open interest had settled to $27,620 as the competitive intensity of Phase 1's final days gave way to Phase 2's steadier volume-building pace.\n\n### Fees\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/878907efbda3f8a560c1f79c0190bdabfd4d2708-2048x1111.png?w=800)\n\nSai collected $21,560 in cumulative [fees](https://defillama.com/protocol/sai?tvl=false&perpVolume=false&fees=true) from launch through March 16. Phase 1 generated $19,600, and Phase 2 contributed $1,960 through its first 12 days. Daily fees peaked at $3,310 on Feb. 27, 2026, during a stretch from Feb. 24, 2026, to March 1, 2026, where fees exceeded $1,000 every day. After the Phase 2 transition, daily fees dropped sharply and remained subdued, falling below $100 on four of the first five days as trading shifted from high-conviction PnL plays to lower-cost volume accumulation.\n\nThe effective fee rate, fees as a percentage of volume, averaged 0.36% across the full period but diverged between phases at 0.64% in Phase 1 versus 0.07% in Phase 2. This gap likely reflects differences in sizing and trade mechanics. Phase 1 traders opened larger positions and held them through wider price moves to accumulate PnL, generating more fee-bearing events per dollar of volume. Phase 2 traders used smaller positions with higher leverage, producing high notional volume relative to the fees collected.\n\n### User Activity and Trade Frequency\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/4f1f59162f7e8c9352bb60bc675bbea52e7a66a9-2048x1235.png?w=800)\n\nAs of March 16, 2026, Sai had 134 [unique traders](https://dune.com/queries/6825342/10709246). The platform had an existing base of 39 traders from its private launch period before Feb. 18, 2026, and the Let\u2019s Go Saicho competition brought in 95 additional participants, 62 during Phase 1 and 33 during Phase 2.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/139a34198ba2c47be91b498028b9b1747c22575f-2048x1111.png?w=800)\n\nThe trader frequency [distribution](https://dune.com/queries/6825355/10709839) reveals a relatively engaged base for a new platform. Only 3.4% of traders executed 1 trade. The largest cohort, 43.6%, executed 2 to 5 trades, while 35.9% places 6 to 20 trades. The most active decile, 10 traders at 50+ trades each, averaged 11.8 active trading days, indicating a core group that traded consistently across both phases.\n\n### User Retention\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/be30ea424fa2e679a7353ae194753406ea4ad350-2048x1185.png?w=800)\n\n[Retention](https://dune.com/queries/6825351/10709830) patterns during Phase 2 provide a window into user stickiness. Returning traders [accounted](https://dune.com/queries/6825349/10709258) for 58.2% of daily active trader appearances from March 5, 2026, through March 16, 2026. After the March 5 spike of 60 active traders, including 37 new arrivals, daily activity settled at an average of 8.7 traders. The pattern suggests that Sai retained a meaningful share of Phase 1 participants in Phase 2 but struggled to attract new entrants after the Phase 2 launch-day momentum passed. \n\n### Risk Behavior: Liquidations and Leverage\n\nThe shift in competition incentives produced a clear change in risk behavior. The [liquidation rate](https://dune.com/queries/6825407/10709162) dropped from 12.9% of trades in Phase 1 to 6.7% in Phase 2, a 48% relative decline. This occurred despite [average leverage](https://dune.com/queries/6825407/10709162) increasing from 33.1x to 44.2x. Phase 1\u2019s ROI-based rewards incentivized directional bets with higher risk tolerance, meaning getting liquidated was an acceptable cost to pursue outsized returns. Phase 2\u2019s volume-based rewards penalized liquidations indirectly, since blown-up capital can\u2019t generate more volume.\n\n## Community: The SaiClone Ambassador Program\n\nAlongside the trading competition, Sai launched the [SaiClone Ambassador Program](https://docs.sai.fun/resources/blogs/saiclone-ambassador), a three-tier progression system that operates entirely through Sai's [Discord](https://discord.com/invite/saidotfun) server. The program uses the [Mee6](https://mee6.xyz/en) bot to track contributions and assign XP, rewarding community engagement, content creation, and platform advocacy across the following tiers:\n\n* [Saicho](https://docs.sai.fun/resources/blogs/saiclone-ambassador#id-1.-saicho) (levels 0-5, up to 1,624 XP): The entry tier, granted automatically upon engaging with the Discord community.\n* [Saiborg](https://docs.sai.fun/resources/blogs/saiclone-ambassador#id-2.-saiborg) (Levels 6-15, 1,625-13,799 XP): Trusted, highly engaged members who receive special community recognition and increased influence on community decisions.\n* [Sage](https://docs.sai.fun/resources/blogs/saiclone-ambassador#id-3.-sage) (Level 16+, 13,800+ XP): Reserved for top contributors. Unlike other tiers, Sage requires a formal application reviewed by the Sai team. Benefits include direct team access, exclusive merchandise, bi-monthly raffles, collaboration opportunities, and early access to platform updates.\n\n[XP](https://docs.sai.fun/resources/blogs/saiclone-ambassador#how-to-earn-xp) accrues through trading activity, technical analysis and signals, community events, video and educational content, X engagement, bug reports, and Discord messages. The program ties community growth directly to platform usage, creating a feedback loop between trading activity and ambassador progression.\n\n## Looking Ahead\n\nSai's roadmap positions the platform as a trading infrastructure rather than a standalone venue. The most differentiated planned product is a white-label Perps-as-a-Service offering, with the first [iteration](https://x.com/SaiDotFun/status/2032458407899209822) from [Coded Estate](https://app.codedestate.com/perps/trades), an RWA platform that now offers perpetual trading powered by Sai. If executed, this would extend Sai's liquidity and infrastructure beyond its own front end.\n\nOn the product side, planned additions include [Sai Savings](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=products%20and%20yield-,Sai%20Savings,-%3A%20A%20way%20for), which targets ~5% yield on idle stable balances, [automated strategy vaults](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=control%20and%20flexibility-,Automated%20strategies,-%3A%20Launch%20vaults), expanded [market listings](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=Real%20world%20asset%20markets) that include real-world asset-style instruments, and DeFi integrations connecting SLP vaults to swaps and routing protocols. The [account](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=with%20one%20click-,Accounts%3A,-A%20true%20CEX) experience is also evolving. Gasless trades are already live, and the team plans to add multichain and fiat funding routes, [cross-chain USDC deposits](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=Cross%20chain%20and%20fiat%20funding) via improved on-ramps, and a [mobile application](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=or%20bank%20account-,Mobile%20app%3A,-Release%20a%20mobile).\n\nFor developers, Sai plans to ship a [data platform](https://docs.sai.fun/resources/blogs/intro-to-sai#new-products-and-yield:~:text=the%20Sai%20platform-,Data%20platform,-%3A%20Backtesting%2C%20historical%20data) with historical data access, backtesting tools, and support for custom order types.\n\n## Closing Summary\n\nSai's Let's Go Saicho trading competition reached 134 traders, generated $6 million in volume, grew TVL 14x in under a month, and collected $21,560 in fees. The two-phase incentive structure produced distinct behavioral shifts, with liquidation rates halving and position sizes shrinking as traders adapted from ROI-focused to volume-focused trading. A 58.2% retention rate in Phase 2 suggests the platform established a sustained baseline of recurring users, though new trader acquisition dropped sharply after the Phase 2 launch spike.\n\nThe next phase for Sai begins after the competition ends. Whether the platform can retain its active traders without incentives, grow SLP liquidity organically, and begin delivering on a roadmap spanning Perps-as-a-Service, Sai Savings, real-world asset markets, and a mobile application will determine whether Sai converts early traction into lasting positioning within the perp DEX landscape.", "hook": "Sai launched on Nibiru with a two-phase trading competition that attracted 134 traders and generated $6 million in perpetual volume in under a month.", "publishDate": "2026-04-06T13:50:00Z", "readingTimeInMinutes": 10.556666666666667, "slug": "sai-bootstrapping-a-perp-dex-on-nibiru", "subscriptionTier": "free", "summary": "Sai is a perpetual DEX on Nibiru offering up to 100x leverage with oracle-settled pricing and pooled SLP-backed liquidity. Its public launch coincided with Let's Go Saicho, a $25,500 competition split between a PnL phase and a volume phase, each targeting different trader behavior. TVL grew 14x to $47,210, cumulative fees hit $21,560, and returning traders accounted for 58.2% of Phase 2 daily activity. The effective fee rate diverged sharply between phases, from 0.64% in Phase 1 to 0.07% in Phase 2, reflecting a shift from high-conviction directional bets to smaller, higher-leverage volume plays. Sai's roadmap extends into Perps-as-a-Service, yield products, RWA markets, and a mobile app, positioning it as trading infrastructure rather than an isolated venue.", "tags": [ { "id": "8f138ee0-fb4f-42b8-919c-9feffd558d88", "name": "Perp DEX" }, { "id": "3fdf6b6b-cfac-426d-b20f-3e4794dec982", "name": "Pulse Reports" } ], "title": "Sai: Bootstrapping a Perp DEX on Nibiru", "previewImage": "https://cdn.sanity.io/images/2bt0j8lu/production/a4aec153be082d301a6690dc37248c9c4ed649d5-6068x3560.png" }, { "id": "283895eb-251b-416c-99b1-ed5c3cb67f9c", "createdAt": "2026-03-29T21:09:41Z", "updatedAt": "2026-03-31T16:11:30Z", "assetIds": [ "3748291f-99cb-4002-9bf2-1a23edc0af77" ], "assets": [ { "id": "3748291f-99cb-4002-9bf2-1a23edc0af77", "name": "Nexus Labs", "symbol": "NEX", "slug": "nexus-labs" } ], "authors": [ { "id": "25fb4f17-1b40-4477-8e6b-be982a87b349", "name": "Alice Hou", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/57dad35450be1a47f2ff6628e6f5fca213499ab4-400x400.jpg?w=100", "linkedinUrl": "" }, { "id": "ac138b81-4baf-4a63-8dbc-e8592c93ba17", "name": "Matt Kreiser", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/a09ff5484ce95234175e5e49131ab71bd1b1726d-1024x1024.png?w=100", "linkedinUrl": "" } ], "content": "## Key Insights\n\n* Nexus embeds **high-performance financial engines directly into the protocol through its co-processor model**, moving exchange, margin, and liquidation logic from contract-level simulation into native execution.\n* The **dual-execution architecture allows performance-critical financial workloads and programmable smart contracts to operate in parallel**, avoiding the typical tradeoff between latency and composability.\n* **The Nexus zkVM anchors execution to cryptographic proofs** rather than full validator re-execution, positioning **proof verification as the primary mechanism for scalable correctness.**\n* **With mainnet and exchange deployment in 2026**, Nexus shifts from infrastructure buildout to market validation, where **liquidity formation, and proof-generation efficiency will determine long-term viability. Central to achieving market validation are USDX, the native U.S. dollar stablecoin of the Nexus ecosystem, and the Nexus Exchange, a non-custodial, central limit order book (CLOB) embedded directly into the Nexus Layer 1 (L1).**\n* **The Nexus Exchange is designed to deliver CEX-parity performance in a more self-custodial, verifiable environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.**\n\n## Introduction\n\nFinancial infrastructure depends on complex computational systems that remain largely unverifiable to external participants. Risk models, margin calculations, settlement logic, and internal reconciliation processes operate behind institutional boundaries, requiring users to rely on reporting and oversight rather than direct proof. While public blockchains introduced deterministic execution and transparent state transitions, most existing architectures are not designed to support the performance and computational demands of modern financial markets.\n\nGeneral-purpose chains prioritize composability and shared liquidity but face constraints around latency and throughput. [Application-specific chains](https://messari.io/copilot/share/application-specific-chains-d7e77c8d-2068-4560-84a1-c23e800490dc) achieve higher performance by narrowing scope, yet fragment liquidity and isolate execution environments. In both cases, critical financial logic often remains either offchain or insufficiently optimized for high-frequency, computation-heavy workloads.\n\n[Nexus](https://messari.io/project/nexus-labs) introduces a layered architecture that separates execution, verification, and consensus into independently optimized systems. Its [dual execution model](https://docs.nexus.xyz/architecture/dual-block-execution) combines an [EVM-compatible environment](https://messari.io/copilot/share/evm-compatibility-df970104-0577-49f5-a15e-647f9e746f32) with a specialized financial [co-processor](https://messari.io/copilot/share/co-processor-definition-6dd4fd0e-6438-4882-8403-5fa2234b1ae2), while a native [zkVM](https://messari.io/copilot/share/zkvm-explained-81e8af21-442d-44b7-9201-1a191baf51ef) generates proofs of correct execution that are committed to the base layer. This structure is designed to support performance-sensitive financial applications without relying on external verification frameworks. For example, the [upcoming](https://blog.nexus.xyz/introducing-the-nexus-dex-alpha/) [Nexus ](https://app.nexus.xyz/trade)Exchange is designed to deliver CEX-parity performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nThis Initiation of Coverage (IOC) report focuses on a technical examination of Nexus\u2019s architecture. Readers seeking a broader discussion of the long-term vision behind verifiable finance are encouraged to refer to the [Nexus Pulse Report](https://messari.io/report/nexus-a-framework-for-verifiable-finance).\n\n[Website](https://nexus.xyz/) / [X (Twitter)](https://x.com/NexusLabs) / [Discord](https://discord.com/invite/AmRKShJfq6)\n\n## Background\n\n[Nexus](https://messari.io/project/nexus-labs/fundraising) was founded in 2022 by [Daniel Marin](https://www.linkedin.com/in/danielmarinq/), a computer science graduate from Stanford University, with the objective of building a universal verifiable machine capable of proving arbitrary computation. The project initially focused on advancing zero-knowledge (zk) proving infrastructure before refining its scope toward financial applications that demand both high performance and computational integrity.\n\nIn June 2024, Nexus [raised](https://blog.nexus.xyz/series-a/) a $25 million Series A round co-led by [Lightspeed](https://messari.io/organization/lightspeed-venture-partners) and [Pantera](https://messari.io/organization/pantera-capital), bringing total capital raised to over $27 million. The network [launched](https://blog.nexus.xyz/the-new-nexus-testnet-is-live/) its first public testnet in December 2024 and has since iterated toward a production-ready architecture.\n\n## Technology\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/4b843d24402778c73e25d671d1516225977c7cf7-7680x4320.png?w=800)\n\nNexus is structured as a [three-layer architecture](https://docs.nexus.xyz/) composed of an Execution Layer, a Verification Layer, and a Consensus Layer. Each layer operates as a distinct system, responsible for running application logic, generating and validating execution proofs, and finalizing state transitions.\n\n### Execution Layer: Nexus EVM and NexusCore\n\n#### Dual-Block Execution\n\nNexus implements a [dual-block execution model](https://docs.nexus.xyz/architecture/dual-block-execution) designed to separate high-frequency financial processing from general-purpose smart contract coordination. Instead of batching all activity into a single block cadence, the network operates two synchronized block streams with distinct performance characteristics.\n\n[NexusCore](https://docs.nexus.xyz/architecture/nexuscore) targets block times of five milliseconds, while NexusEVM has a block time of 1-2 seconds. These blocks are optimized for latency-sensitive workloads such as order matching, position updates, and risk recalculations. [NexusEVM](https://docs.nexus.xyz/architecture/nexusevm) operates on a slower block cadence, aggregating state changes from several NexusCore blocks before finalization. This periodic synchronization layer preserves compatibility with Ethereum-style smart contracts while allowing composability between programmable logic and high-speed financial activity.\n\nThis structure has three key effects. First, high-speed trading activity runs independently from complex smart contract logic, so time-sensitive operations are not slowed down by heavier computation. Second, performance can scale more efficiently with hardware, as financial workloads do not need to wait for full EVM block processing. Third, both execution environments remain economically unified, with fees and incentives settled at the base layer rather than split across separate systems.\n\nNexusCore\n\nAt the center of NexusCore is the co-processor model. A co-processor is a native execution module embedded into the blockchain itself. Instead of interpreting [smart contract bytecode](https://blog.chain.link/what-are-abi-and-bytecode-in-solidity/), it runs pre-compiled logic with direct access to protocol resources. This design reduces execution overhead and allows financial operations to be processed with greater consistency and speed.\n\nEach co-processor functions as an independent state machine. It maintains its own isolated data structures, executes specialized algorithms tailored to its purpose, and exposes controlled interfaces for interaction. This isolation enables parallel execution across modules while maintaining deterministic state transitions under shared consensus validation.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/cdbe36d2664c53a891569a354d7cefbb63a24280-7680x4320.png?w=800)\n\nThe architecture can be understood in three components:\n\n* **State Layer:** Maintains dedicated data structures and deterministic updates for each co-processor.\n* **Machine Layer:** Executes specialized financial logic, such as matching, margining, or settlement.\n* **I/O Layer:** Enables co-processors to be accessed directly by offchain systems or by smart contracts onchain. \n\nNexusCore\u2019s dual interface is a key advantage. It allows professional trading systems to connect directly for speed, while smart contracts can interact with the same engine onchain. In practice, both high-frequency trading and DeFi applications can run on the same network without sacrificing performance or composability.\n\nOver time, NexusCore is intended to host a broader catalog of \u201cL1-native engines,\u201d including lending markets, vault strategies, oracle and information feeds, RWA and stablecoin infrastructure, gas and fee modules, and bridging primitives, all of which compose atomically with NexusEVM smart contracts.\n\n#### NexusEVM\n\nAt the protocol level, NexusEVM adheres to the standard [Ethereum Virtual Machine ](https://ethereum.org/developers/docs/evm/)specification. It supports the same contract bytecode, gas semantics, RPC interfaces, and developer tooling used across Ethereum.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/3eefe5ee76b49a3b1721c076181ad96ca399b08a-7680x4320.png?w=800)\n\nWithin Nexus, NexusEVM runs in parallel with NexusCore. Smart contracts deployed on NexusEVM can invoke Core-level co-processors through EVM precompiles or structured cross-domain calls. These interactions are [atomic](https://www.investopedia.com/terms/a/atomic-swaps.asp), meaning that if any part of the transaction fails, the entire operation reverts. Ordered processing ensures deterministic state transitions across validators.\n\nThis integration allows developers to combine programmable contract logic with high-performance financial engines. Applications can manage governance, token logic, incentives, or strategy layers in NexusEVM, while delegating performance-critical execution to NexusCore. In practice, NexusEVM provides an expressive, composable layer of the system, enabling developers to extend and build on top of Core-level financial primitives without leaving the base chain.\n\n### Verification Layer: Nexus zkVM\n\nThe Verification Layer is powered by the Nexus zkVM, a zk virtual machine that generates proofs confirming that computation was executed exactly as specified. Instead of every validator replaying complex logic, the network verifies a succinct proof derived from that execution.\n\nThe zkVM is composed of four primary technical layers:\n\n* RISC-V Machine Architecture: A custom-built virtual machine implementing a modified [RISC-V instruction set](https://messari.io/copilot/share/risc-v-b8a3d4a4-438c-487a-a4ad-53fde178e4f0). It is designed specifically for prover efficiency, including structured memory handling and a \u201cprove only what is accessed\u201d model that reduces unnecessary proof overhead.\n* Algebraic Constraint System (AIR): The execution of the machine is translated into a mathematical representation known as an [Algebraic Intermediate Representation](https://docs.nexus.xyz/zkvm/overview/architecture#core-components). This formalizes every instruction, memory read, and state transition into constraints that must be satisfied for a proof to be valid.\n* STARK-Based Prover (S-two Integration): Execution traces are converted into cryptographic proofs using a [STARK prover](https://github.com/starkware-libs/stwo) optimized for performance. STARKs allow proofs to remain succinct and publicly verifiable without trusted setup requirements.\n* Runtime & SDK Layer: A [Rust](https://rust-lang.org/)-based runtime that allows developers to define public inputs, private inputs, outputs, and logging in a structured way, while abstracting the underlying proving complexity.\n\nNexus zkVM\u2019s benefit is architectural scalability: computation can scale independently from consensus because validators verify proofs rather than replay entire workloads. This reduces replication cost while maintaining deterministic correctness.\n\nA potential risk, on the other hand, is proving overhead. Generating STARK proofs is computationally intensive and requires specialized hardware or distributed prover infrastructure. While verification is lightweight, the economic viability of large-scale proving depends on continued optimization and network-level prover coordination.\n\n### Consensus Layer: Nexus BFT\n\nThe Consensus Layer is governed by [NexusBFT](https://docs.nexus.xyz/), the protocol responsible for finalizing blocks, validating execution commitments, and managing the lifecycle of co-processors.\n\nEach block finalized by NexusBFT includes three core elements:\n\n* A [Merkle commitment](https://messari.io/copilot/share/merkel-commitment-d677ea83-4c90-41b6-b851-bd75041acea5) to the execution state, anchoring the verified results of both NexusCore and NexusEVM.\n* Validator signatures and metadata, establishing agreement across the network.\n* Optional registry updates, which modify the active set of co-processors through the [CPRegistry](https://docs.nexus.xyz/network/overview/system-overview#consensus-layer).\n\nBeyond standard block finalization, NexusBFT introduces protocol-level extensibility. Rather than requiring [hard forks](https://messari.io/copilot/share/what-are-hard-forks-5a6fa661-fb57-4817-9208-aac62b515239) to introduce or modify financial engines, co-processor registration and lifecycle management are handled directly within the consensus layer. This allows the network to activate, upgrade, or deprecate specialized modules without disrupting execution environments.\n\n## DeFi on Nexus\n\n### Strategy and USDX\n\nThe Nexus team is building a native stablecoin and perpetuals-focused Exchange directly into the Layer 1, given that these are [three of the most](https://blog.nexus.xyz/usdx-the-money-layer-for-verifiable-finance/#:~:text=Ethereum%2C%20and%20beyond.-,The%20USDX%20thesis,-At%20the%20core) extensible, proven and synergistic businesses in crypto. Taken together, the L1 and exchange are designed to deliver CEX-parity performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nUSDX is the [native U.S. dollar stablecoin](https://blog.nexus.xyz/usdx-the-money-layer-for-verifiable-finance/) of the Nexus ecosystem, 1:1-backed by U.S. Treasury bills and cash equivalents. USDX will be the default margin and settlement asset for [Nexus ](https://app.nexus.xyz/trade)Exchange, a non-custodial [central limit order book](https://messari.io/copilot/share/central-limit-order-book-0364d6bc-f9e7-4059-99e7-28066b7cc1f5) (CLOB) embedded directly into the Layer 1 (L1). The more the Exchange is used, the greater the demand for USDX. Moreover, the more USDX in circulation, the deeper and cheaper liquidity becomes for the exchange. With meaningful adoption, this reinforcing flywheel can increase the value of the L1.\n\nUSDX will first launch on Ethereum, where distribution is deepest, followed by Nexus mainnet, and crosschain interoperability. Issuance will take place via the M0 Protocol via the JMI extension, which will enable permissionless 1:1 swaps from major stablecoins into USDX. As tokenized assets and 24/7 synthetic markets expand onchain, USDX is designed to serve as the neutral denominator for risk-managed portfolios.\n\nThe key value proposition of USDX relative to other stablecoins is [yield streaming](https://blog.nexus.xyz/yield-is-the-2026-defi-battleground/#:~:text=DeFi%20in%202026.-,Yield%20streaming%3A%20from%20extraction%20to%20alignment,-Yield%20streaming%20inverts), which inverts the [extractive model](https://blog.nexus.xyz/yield-is-the-2026-defi-battleground/#:~:text=The%20extractive%20model%3A) of the largest stablecoins USDT and USDC, whose issuers capture all reserve yield as compensation for infrastructure and compliance. Nexus streams USDX yield directly to users and builders on the L1 via the fully transparent Global Yield Distribution System ([GYDS](https://blog.nexus.xyz/usdx-the-money-layer-for-verifiable-finance/#:~:text=Nexus-,Yield%20streaming%20and%20the%20Global%20Yield%20Distribution%20System,-One%20of%20the)). Yield from U.S. Treasury bills and cash equivalents is distributed as USDX each week according to the time-weighted USDX balances across registered application sources, which are contracts and modules that builders have opted into. The yield is split between the protocol and builders, with builder allocations proportional to attributed USDX TVL, and yield flowing through to end users based on their balances, where supported. On top of this, Nexus can, at its discretion, add protocol-native incentives to increase yield beyond short-duration U.S. Treasury yields, including portions of exchange revenue, subject to governance and risk budgets, directed at strategic segments like builders bringing new markets or liquidity. The Nexus team plans to publish a quarter-by-quarter policy for USDX, disclosing a target onchain yield that reflects the baseline Treasury rate plus any protocol-native additions.\n\nThis aligns incentives to a much higher degree than Tether\u2019s USDT and Circle\u2019s USDC, which simply offer access to the stablecoin as the value proposition. It\u2019s also a process entirely unblocked compared to yield-bearing stablecoins registered as securities (which severely limits the holder base to qualified participants) in order to pay interest directly to holders. \n\nThe yield streaming model of USDX creates a predictable, programmatic incentive loop. Builders are rewarded for attracting real USDX usage, while users are rewarded for holding and deploying USDX on Nexus. During the early phase, NEX token incentives may complement USDX yield to accelerate integrations, but the long-term design relies on organic demand and real yield.\n\n### Nexus Exchange\n\nTo operationalize its execution architecture, Nexus [is developing](https://blog.nexus.xyz/introducing-the-nexus-dex-alpha/) the [Nexus ](https://app.nexus.xyz/trade)Exchange, a non-custodial [central limit order book](https://messari.io/copilot/share/central-limit-order-book-0364d6bc-f9e7-4059-99e7-28066b7cc1f5) (CLOB) embedded directly into the Layer 1 (L1). Unlike exchanges deployed as smart contracts, the Nexus Exchange runs inside NexusCore as a native co-processor. Order matching, margin calculations, funding logic, and liquidations are executed at the protocol level rather than simulated through contract bytecode.\n\nThe first supported product is [perpetual futures](https://docs.nexus.xyz/trading/perpetuals). These contracts allow traders to take leveraged long or short exposure to supported assets without expiration. Users post collateral, open positions with leverage, and pay or receive periodic funding based on market conditions. Because the exchange engine operates within NexusCore, all position updates and risk calculations are processed under deterministic execution and shared consensus.\n\nThis architecture shifts the exchange from being an application layered on top of the chain to becoming part of the chain\u2019s execution fabric. Performance-sensitive operations are handled natively, while settlement and accounting remain transparent and verifiable at the base layer.\n\n### Risk Management and Liquidation\n\nRisk controls are enforced automatically through a built-in [liquidation engine](https://docs.nexus.xyz/trading/perpetuals/liquidations). A trader\u2019s equity is continuously evaluated against predefined margin thresholds using a mark price derived from the Nexus oracle system.\n\nTwo margin levels govern positions. Initial margin determines the leverage required to open a position, while maintenance margin defines the minimum equity needed to keep it open. If equity falls below the maintenance threshold, the system triggers liquidation.\n\nRather than relying on external bots competing to liquidate positions, Nexus executes liquidations through a dedicated onchain mechanism. Positions are closed at or near the mark price, with safeguards to prevent negative balances. If losses exceed available collateral, an [insurance fund](https://docs.nexus.xyz/trading/perpetuals/liquidations#how-liquidation-works) absorbs residual shortfalls to preserve overall system solvency.\n\nBy embedding margin and liquidation logic directly into the execution layer, Nexus reduces execution uncertainty and race conditions. The tradeoff is that core risk parameters are embedded at the protocol level, making changes more consequential than in contract-based systems.\n\nTogether, the Nexus Exchange functions as both a flagship application and a structural demonstration of NexusCore\u2019s capabilities. It tests whether protocol-level financial engines can combine high-performance execution with deterministic settlement and cryptographic accountability within a unified L1 environment. Beyond perpetual futures, Nexus plans to expand the Exchange to include [spot markets](https://docs.nexus.xyz/trading/spot) and [vault products](https://docs.nexus.xyz/trading/vaults), with further details expected in future releases.\n\n## Roadmap \n\nNexus\u2019s [roadmap](https://blog.nexus.xyz/the-nexus-roadmap/) outlines a transition from testnet infrastructure to a fully operational financial L1, with staged activation of validators, exchange functionality, and protocol-level financial primitives.\n\n### Q1 2026: Network Activation\n\nThe first milestone in 2026 is under active development and will center on network coordination and exchange readiness. [Community Genesis](https://blog.nexus.xyz/tag/community/) will onboard validators, operators, and early participants, marking the shift from a development-driven network to a validator-secured environment.\n\n### Q2 2026: Mainnet EVM Launch\n\nIn Q2 2026, the Nexus L1 mainnet is expected to go live. This milestone will establish a production settlement layer with secure execution and finalized consensus. Bridges and onramps will become operational, allowing external capital to enter the ecosystem.\n\nThis stage will formalize validator participation and transition the EVM environment from testnet to persistent infrastructure. Applications will be able to deploy into a stable environment with deterministic finality and integrated access to NexusCore co-processors. The focus will shift from experimentation to economic durability.\n\n### Q3 2026: Exchange Mainnet\n\nFollowing L1 activation, the Nexus Exchange will launch on mainnet. This will mark the operational start of Nexus as a functioning financial network rather than solely an infrastructure layer. The exchange is designed to deliver CEX-like performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nLive trading will introduce continuous order flow, real margin enforcement, oracle updates under production conditions, and full interaction between execution, verification, and consensus layers. Liquidity depth, liquidation behavior, and proof performance will become measurable under sustained market activity.\n\nBeyond launch milestones, Nexus will continue to evolve its core architecture. Development efforts will focus on improving zkVM performance, expanding co-processor capabilitiesand broadening supported asset classes such as 24/7 equities, FX, commodities, and indexes.\n\nThe long-term objective will be to extend protocol-level financial infrastructure across additional markets, collateral models, and composable applications. This phase will prioritize improvements in proof efficiency, execution reliability, and validator robustness to support sustained financial activity.\n\n## Closing Summary\n\nNexus represents an architectural bet: that high-performance financial infrastructure should not be simulated through smart contracts, but embedded directly into the base layer and verified cryptographically.\n\nIts three-layer design separates execution, proof generation, and consensus, allowing each to scale independently. The dual-execution model formalizes a distinction between programmable logic and performance-critical financial engines. NexusCore handles deterministic, latency-sensitive computation, while NexusEVM preserves composability and developer accessibility. The zkVM anchors the system with verifiable computation, shifting validation from re-execution to proof verification.\n\nWith mainnet and exchange deployment in 2026, Nexus shifts from infrastructure buildout to market validation, where liquidity formation, oracle reliability, and proof-generation efficiency will determine long-term viability. Central to achieving market validation are USDX, the native U.S. dollar stablecoin of the Nexus ecosystem, and the Nexus Exchange, a non-custodial, central limit order book (CLOB) embedded directly into Layer 1 (L1). USDX inverts the extractive model of the largest stablecoins USDT and USDC, whose issuers capture all reserve yield as profit for infrastructure and compliance. Nexus streams USDX yield directly to users and builders on the L1 via the fully transparent Global Yield Distribution System (GYDS). The Nexus Exchange is designed to deliver CEX-parity performance in a more decentralized environment that can host and leverage high-frequency trading strategies, AI agents, commerce, and other economic activity.\n\nBy integrating matching, margining, liquidation, and oracle logic at the protocol level, Nexus reduces overhead and execution uncertainty inherent in contract-based exchange designs. The tradeoff is structural: financial logic becomes part of the base layer, increasing the importance of validator coordination and disciplined protocol governance.\n\nUltimately, the success of Nexus will not be measured by throughput alone, but by whether protocol-level financial primitives can operate reliably under live market conditions while maintaining deterministic settlement and cryptographic accountability.", "hook": "Nexus embeds high-performance financial engines directly into the protocol through its co-processor model, moving exchange, margin, and liquidation logic from contract-level simulation into native execution.", "publishDate": "2026-03-31T14:00:00Z", "readingTimeInMinutes": 14.376666666666667, "slug": "understanding-nexus-a-comprehensive-overview", "subscriptionTier": "free", "summary": "The dual-execution architecture allows performance-critical financial workloads and programmable smart contracts to operate in parallel, avoiding the typical tradeoff between latency and composability. The Nexus zkVM anchors execution to cryptographic proofs rather than full validator re-execution, positioning proof verification as the primary mechanism for scalable correctness. With mainnet and exchange deployment in 2026, Nexus shifts from infrastructure buildout to market validation, where liquidity formation, and proof-generation efficiency will determine long-term viability. Central to achieving market validation are USDX, the native U.S. dollar stablecoin of the Nexus ecosystem, and the Nexus Exchange, a non-custodial, central limit order book (CLOB) embedded directly into the Nexus Layer 1 (L1).", "tags": [ { "id": "2df3c948-022e-4a95-9ecf-d2ddca4c40f3", "name": "Protocol Overview" } ], "title": "Understanding Nexus: A Comprehensive Overview", "previewImage": "https://cdn.sanity.io/images/2bt0j8lu/production/6c006611ca5148c732fac20be7f0f8ecc6641368-6400x3600.png" } ], "metadata": { "limit": 10, "page": 1, "totalRows": 2, "totalPages": 1 } } } }, "description": "Default response" }, "400": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Bad Request" }, "403": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Forbidden" }, "404": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "No reports found" }, "500": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Internal Server Error" } }, "security": [ { "apiKey": [] } ], "summary": "Get research reports", "tags": [ "research/Research Reports" ] } }, "/research/v1/reports/tags": { "get": { "description": "Returns a list of research report tags", "operationId": "getResearchReportTags", "responses": { "200": { "content": { "application/json": { "schema": { "properties": { "data": { "items": { "type": "string" }, "type": "array" }, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" }, "example": { "error": null, "data": [ "AI", "Centralized Exchanges", "Consumer", "DAOs", "DeFi" ] } } }, "description": "Default response" }, "400": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Bad Request" }, "403": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Forbidden" }, "500": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Internal Server Error" } }, "security": [ { "apiKey": [] } ], "summary": "Get list of tags for research report", "tags": [ "research/Research Reports" ] } }, "/research/v1/reports/{reportId}": { "get": { "description": "Returns a research report by its report ID", "operationId": "getResearchReport", "parameters": [ { "in": "path", "name": "reportId", "required": true, "schema": { "format": "byte", "type": "string", "example": "3f9ff008-a798-4f6e-85c7-a6a109e8832c", "default": "3f9ff008-a798-4f6e-85c7-a6a109e8832c" } } ], "responses": { "200": { "content": { "application/json": { "schema": { "properties": { "data": { "$ref": "#/components/schemas/ResearchReport" }, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" }, "example": { "error": null, "data": { "id": "2af98e9e-1c9a-4e31-80be-38e8c1211990", "createdAt": "2026-03-25T22:43:10Z", "updatedAt": "2026-03-26T18:17:50Z", "assetIds": [ "818de6bf-5bb6-42c6-874c-2fb2da81a5b5", "95111d4e-a862-41e1-829f-d661e1b8f658", "f8852d39-3261-4345-871e-54d533918dc2", "99b6a5f4-2200-4098-82fd-53d091bdee70" ], "assets": [ { "id": "f8852d39-3261-4345-871e-54d533918dc2", "name": "Opinion", "symbol": "opn", "slug": "opinion" }, { "id": "95111d4e-a862-41e1-829f-d661e1b8f658", "name": "Kalshi", "symbol": "KALSHI", "slug": "kalshi" }, { "id": "818de6bf-5bb6-42c6-874c-2fb2da81a5b5", "name": "Polymarket", "symbol": "POLY", "slug": "polymarket" }, { "id": "99b6a5f4-2200-4098-82fd-53d091bdee70", "name": "Hyperliquid", "symbol": "HYPE", "slug": "hyperliquid" } ], "authors": [ { "id": "ecaf52b1-16eb-4322-bf02-886bea2c5b06", "name": "Austin Weiler", "image": "https://cdn.sanity.io/images/2bt0j8lu/production/d70ad0cd21c781575a4fc129c8b634ae0ddd2432-2283x2283.jpg?w=100", "linkedinUrl": "" } ], "content": "## Key Insights\n\n* **Polymarket is one of the two largest prediction markets. From** **September 2025 to February 2026, it generated $31.0 billion in volume, a 31% share**.\n* On March 7, Polymarket was reportedly seeking a $20 billion fully diluted valuation (FDV) in its next funding round, with a POLY token and airdrop confirmed in October 2025**. The central question is whether a $20 billion FDV reflects reasonable expectations for future fee generation, or if the market is mispricing the opportunity.**\n* Our valuation forecasts 2028 FDV based on volume projections across sports, politics, crypto, and other market categories, take rates, and fee multiples.\n* On **March 30, Polymarket launches taker fees on nearly all markets.** How volume responds to taker fees, increased competition, and post-airdrop volume retention will determine whether our assumptions hold.\n\n**Valuation Model:** The full valuation model, including assumptions and scenario sensitivities, is available [here](https://docs.google.com/spreadsheets/d/1JpRHkS--eHIii_P-PhsM1nrOJtfi56Qmg17qO6J9Mqk/edit?usp=sharing).\n\n## Introduction\n\nPrediction markets are the current breakout sector in crypto. In February 2026, the sector processed [$23.2 billion](https://dune.com/datadashboards/prediction-markets) in trading volume, up 1,218% YoY from [$1.8 billion](https://dune.com/datadashboards/prediction-markets) in February 2025. Polymarket and Kalshi led that expansion, ranking among the top two platforms by monthly volume, open interest, transaction count, and unique users for almost every week of 2025.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/5ac0fbec1d84efeb855d363200990beb0d433aff-2048x1099.png?w=800)\n\nFrom February 2025 to February 2026, Polymarket's monthly trading volume grew 427% from [$1.5 billion](https://dune.com/queries/6689536/10534249) to [$7.9 billion](https://dune.com/queries/6689536/10534249). Monthly transactions grew 2,206% from [3.5 million](https://dune.com/queries/6689539/10534256) to [80.7 million](https://dune.com/queries/6689539/10534256), and active users grew 58% from [426,000](https://dune.com/queries/6689540/10534259) to [671,400](https://dune.com/queries/6689540/10534259) over the same period. \n\nOpen interest (OI) measures the capital at risk across unresolved markets, offering a cleaner view of platform activity than volume because it cannot be inflated by wash-traded markets. From March 1, 2025, to February 28, 2026, Polymarket's OI grew 262% from [$107.5 million](https://dune.com/queries/5749464/9330387) to [$389.0 million](https://dune.com/queries/5749464/9330387). \n\nThat dominance drew investment capital at scale in 2025 as Polymarket raised three rounds of funding:\n\n* On [June 25, 2025](https://messari.io/project/polymarket/fundraising/funding), it raised a $185 million Series C led by Multicoin Capital.\n* On [August 26, 2025](https://messari.io/project/polymarket/fundraising/funding), it completed a $150 million strategic round led by Coinbase Ventures. \n* On [October 7, 2025](https://messari.io/project/polymarket/fundraising/funding), Intercontinental Exchange, the parent company of the New York Stock Exchange, agreed to invest up to $2 billion in a commercial and regulatory partnership that valued Polymarket at roughly $9 billion.\n\n**On [March 7, 2026](https://www.wsj.com/finance/kalshi-and-polymarket-are-each-eyeing-roughly-20-billion-valuations-d7b9c5d8), Polymarket was reportedly sounding out investors for funding rounds at a $20 billion fully diluted valuation (FDV). This report builds a ground-up valuation of Polymarket to test whether that FDV is justified.** \n\nVenture and institutional capital funded the platform's growth, then attention turned to whether a public token would arrive. On [October 24, 2025](https://www.coindesk.com/markets/2025/10/24/polymarket-will-launch-token-and-airdrop-after-u-s-relaunch-cmo-says), Polymarket CMO Matthew Modabber confirmed plans for a POLY token and a future airdrop. In [February 2026](https://messari.io/copilot/share/polymarket-airdrop-rumors-a36ebae6-fc4d-4db0-b967-a4302d6cbb44), expectations shifted toward a launch before the end of August 2026, after a [Polymarket team member](https://x.com/mustafap0ly) liked an X post stating that the platform would conduct an airdrop within that timeframe. The timing remains unconfirmed, but a 2026 launch appears increasingly likely. Whether that growth translates to durable value capture for POLY holders is the central question for investors. \n\nThe platform has proven product-market fit, and the fundraising validates institutional conviction. Polymarket generated minimal revenue for most of its existence, as taker fees launched on January 6, 2026, limited to select crypto and sports markets, and the majority of markets remained fee-free. On [March 23, 2026](https://docs.polymarket.com/trading/fees), Polymarket announced plans to extend taker fees to all markets except geopolitical, [effective March 30](https://docs.polymarket.com/trading/fees), with varying maximum effective fee rates across categories. **The path from product-market fit to token value accrual will depend on how well Polymarket retains volume share after its fee expansion.**\n\nThis report focuses on [Polymarket (global)](https://polymarket.com/) and refers to it as \"Polymarket\" throughout. This report does not cover [Polymarket U.S.](https://www.polymarketexchange.com/) or its valuation, as it is a [separate legal entity](https://polymarket.com/tos#:~:text=Polymarket%20operates%20globally,Privacy%20Policy.) from Polymarket (global). \n\n## Understanding Polymarket\n\n[Polymarket](https://messari.io/project/polymarket) is an onchain prediction market where users trade tokens tied to the outcome of future events. Markets cover questions such as _\u201c[Will Marco Rubio win the 2028 U.S. Presidential Election?](https://polymarket.com/event/presidential-election-winner-2028),\u201d_ with each market having binary Yes or No tokens tied to the outcome. Yes and No tokens trade between $0.00 and $1.00 in [USDC.e](https://messari.io/project/usd-coin-ethereum-bridged) (bridged [USDC](https://messari.io/project/circle-usdc)), and each pair of these tokens is fully collateralized by $1.00 of USDC.e. The collateral is locked in a [Conditional Token Framework (CTF)](https://docs.polymarket.com/trading/ctf/overview) contract, an open standard built by [Gnosis](https://github.com/gnosis/conditional-tokens-contracts/).\n\nNew tokens are minted through a process called [splitting](https://docs.polymarket.com/concepts/positions-tokens#split): when a user splits $1 of USDC.e collateral, the CTF mints two [ERC1155](https://messari.io/copilot/share/erc1155-token-standard-explained-a910557b-9763-44ee-b010-b19786941192) tokens, 1 Yes token and 1 No token, representing each side of the binary market. For example, splitting $100 USDC.e produces 100 Yes tokens + 100 No tokens.\n\nThe reverse process is called [merging](https://docs.polymarket.com/concepts/positions-tokens#merge): when a user converts equal amounts of Yes and No tokens back into USDC.e. For example, merging 100 Yes tokens + 100 No tokens converts them into $100 USDC.e.\n\nIf the market outcome is Yes, each Yes token pays $1.00, and each No token settles at $0. If the outcome is No, the payouts reverse. A $0.65 token price implies a 65% market-implied probability that the event occurs. \n\nPolymarket does not restrict high-performing users from trading because all bets are peer-to-peer, meaning Polymarket never takes the other side of a trade and carries no house risk. Traditional sportsbooks like [DraftKings](https://ca.finance.yahoo.com/quote/DKNG/) and [FanDuel](https://ca.finance.yahoo.com/quote/FLUT/) [ban profitable bettors](https://fairoddsterminal.com/why-modern-sports-betting-different) because the platforms trade directly against their customers and absorb losses when those customers win.\n\nPolymarket is onchain and does not require Know Your Customer (KYC) identity verification. [Polymarket U.S.](https://polymarket.com/usa), which is not covered in this report, operates as a Designated Contract Market (DCM) regulated by the Commodity Futures Trading Commission (CFTC) and requires KYC. \n\n### Technical Architecture\n\n**Events and Markets**\n\nPolymarket organizes prediction markets into two layers: [events](https://docs.polymarket.com/concepts/markets-events#events) and [markets](https://docs.polymarket.com/concepts/markets-events#markets). An event is a container that groups one or more related markets. A market is the core unit of trading on Polymarket. Each market poses a single binary question with a Yes or No outcome.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/f1143cb0f26795300699e935a5b0563359540acc-2048x1152.png?w=800)\n\nSingle-market events contain only one market. For example, _\"Will Bitcoin reach $100,000 by December 2024?\"_ is both the event and the market. Multi-market events occur when an event has two or more mutually exclusive outcomes. For example, the event _\u201cWho will win the 2024 Presidential Election?\u201d_ ran as one event with multiple separate Yes/No markets:\n\n* _Market: Donald Trump? (Yes/No)_\n* _Market: Joe Biden? (Yes/No)_\n* _Market: Kamala Harris? (Yes/No)_\n* _Market: Other? (Yes/No)_\n\n**Trade Execution**\n\nTraders buy and sell these tokens through a hybrid onchain [central limit order book (CLOB)](https://docs.polymarket.com/concepts/prices-orderbook#:~:text=Central%20Limit%20Order%20Book%20(CLOB)). Polymarket stores orders, and its [operator matches orders offchain](https://docs.polymarket.com/concepts/prices-orderbook#how-trades-work).\n\n\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/cc2d671841a5b45bc95a814d525c09e1a016a945-2048x1262.png?w=800)\n\n_Source: [Polymarket Documentation (prices & orderbook)](https://docs.polymarket.com/concepts/prices-orderbook)_\n\nOnce Polymarket matches orders, the trades settle [onchain](https://docs.polymarket.com/concepts/prices-orderbook#how-trades-work) on [Polygon](https://messari.io/project/polygon-ecosystem-token). Two order types are available: market orders execute immediately at the best available price, and limit orders sit in the order book until a counterparty matches them at the specified price. Traders can cancel unfilled limit orders at any time.\n\n**Resolution**\n\nWhen a market's end date passes, it enters the resolution phase. Polymarket uses [UMA's Optimistic Oracle](https://docs.polymarket.com/concepts/resolution#:~:text=UMA%20Optimistic%20Oracle), a permissionless resolution system, to resolve markets. Each market has pre-defined resolution rules specifying the outcome source of truth, market end date, and guidance for edge cases.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/186b2d2dce1e0505cf7d70b0f050e0504fca6351-2048x1262.png?w=800)\n\n_Source: [Polymarket Documentation (resolution)](https://docs.polymarket.com/concepts/resolution)_\n\nThe resolution process starts with a proposal. Any user can propose an outcome by selecting the winning side and posting a bond, [typically $750 USDC.e](https://docs.polymarket.com/concepts/resolution#:~:text=Posting%20a%20bond%20(typically%20%24750%20USDC.e)). If no one disputes the proposal within [two hours](https://docs.polymarket.com/concepts/resolution#:~:text=2%2Dhour%20challenge%20period), the market resolves and the proposer recovers their bond plus a reward. A dispute requires the challenger to post a matching $750 counter-bond, which opens a second proposal round. If that second proposal is also disputed, the question escalates to UMA's Data Verification Mechanism (DVM). DVM resolution is a [24-48 hour debate period](https://docs.polymarket.com/concepts/resolution#:~:text=During%20the%2024%2D48%20hour%20debate%20period) during which participants submit evidence on UMA's Discord advocating for their outcome, followed by a 48-hour vote by UMA token holders. \n\nThe [DVM vote](https://docs.polymarket.com/concepts/resolution#:~:text=After%20the%20debate%20period%2C%20UMA%20token%20holders%20vote%20on%20the%20correct%20outcome) produces one of four outcomes:\n\n* **Proposer wins:** Original proposal accepted. Proposer recovers their bond plus half of the disputer's bond.\n* **Disputer wins:** Proposal rejected, which requires a new proposal. Disputer recovers their bond plus half of the proposer's bond.\n* **Too Early:** Event has not yet concluded. Disputer recovers their bond plus half of the proposer's bond.\n* **Unknown / 50-50:** Neither outcome applies. The market resolves at 50/50, which means each token redeems for $0.50, and the disputer recovers their bond plus half of the proposer's bond.\n\nPolymarket's hybrid CLOB makes binary prediction markets intuitive for non-crypto-native users, and onchain settlement on Polygon provides transparent, verifiable execution once a trade is matched. The design holds up well on the surface, but the architecture carries two structural risks. \n\nFirst, offchain order matching gives Polymarket direct control over a centralized layer in the trade flow, exposing users to censorship or downtime risks. Second, UMA's DVM introduces resolution risk when voting power concentrates among a small number of large UMA token holders. Smaller token holders face slashing penalties for voting against the majority, creating a structural incentive to follow whale votes rather than seek truthful outcomes.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/792c4d4646861555b966bfac7ee8274d6bd347f9-2048x1262.png?w=800)\n\n_Source: [The Defiant](https://thedefiant.io/news/defi/polymarket-s-usd7m-ukraine-mineral-deal-debacle-traced-to-oracle-whale)_\n\nOn [March 24, 2025](https://www.theblock.co/post/348171/polymarket-says-governance-attack-by-uma-whale-to-hijack-a-bets-resolution-is-unprecedented), this vulnerability surfaced on a market asking, \"Ukraine agrees to Trump mineral deal before April?\" A user placed a large bet on Yes despite no official agreement existing, and proposed a Yes resolution. The proposal was disputed, and during the vote, a validator cast [5 million UMA tokens across three accounts](https://thedefiant.io/news/defi/polymarket-s-usd7m-ukraine-mineral-deal-debacle-traced-to-oracle-whale), representing 25% of total votes, in favor of Yes, steering the vote toward an incorrect outcome. The market resolved in favor of Yes. Polymarket called it an \"unprecedented\" governance attack and confirmed it could not issue refunds. The incident was isolated, and Polymarket has implemented changes to the resolution system since the attack, but the structural vulnerability in UMA's voting mechanics remains open.\n\n### Revenue Model\n\nPolymarket charges [no fees](https://docs.polymarket.com/polymarket-learn/trading/fees) on deposits or withdrawals and [covers](https://docs.polymarket.com/trading/gasless#what-is-covered) all Polygon gas fees for outcome token trades and approvals. Until January 2026, the platform generated no direct trading revenue.\n\nOn [January 6, 2026](https://www.gncrypto.news/news/polymarket-introduces-fees-15-minute-markets/), Polymarket introduced taker fees on 15-min crypto markets, its first direct monetization of trading activity. In February 2026, taker fees expanded to 5-min crypto markets and select sports markets, specifically NCAAB and Serie A. On [March 23, 2026](https://docs.polymarket.com/trading/fees#markets-with-fees), Polymarket announced **taker fees would extend to all markets except geopolitical**, effective [March 30](https://docs.polymarket.com/trading/fees#markets-with-fees), with varying maximum effective fee rates across categories. Polymarket charges **no maker fees on any market.**\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/29a92a69aed7bb4636376515ba3e0e01df7fa111-2048x1262.png?w=800)\n\n_Source: [Polymarket Documentation (fees)](https://docs.polymarket.com/trading/fees)_\n\n[Taker fees](https://docs.polymarket.com/trading/fees#fee-structure) vary by price per share, peak at 50% probability, and decrease symmetrically toward the extremes. Crypto markets charge the highest peak effective fee rate (for 100 shares), [at 1.80%](https://docs.polymarket.com/trading/fees#fee-structure). A trader buying 100 shares at a 50% probability pays a $0.90 taker fee on a $50 trade. \n\nMentions markets charge the next highest [peak rate at 1.56%,](https://docs.polymarket.com/trading/fees#fee-structure) with a $0.78 taker fee on the same $50 trade. Sports markets charge the lowest peak rate of any fee-charging market, [at 0.75%](https://docs.polymarket.com/trading/fees#fee-structure), a $0.38 taker fee on a $50 trade.\n\nOn buy orders, Polymarket collects taker fees in outcome shares rather than USDC.e. A trader buying 100 contracts at $0.50 receives fewer shares: the $0.90 fee is deducted from the position, delivering 98.20 shares instead of 100. On sell orders, the fee is deducted directly from the USDC.e proceeds the trader receives.\n\nBy comparison, Kalshi charges taker fees on [most markets](https://kalshi.com/fee-schedule), peaking at 50% probability, but charges an [effective peak fee rate of 3.5%](https://kalshi.com/docs/kalshi-fee-schedule.pdf), more than double Polymarket's crypto peak. On the same $50 trade, a Kalshi user pays $1.75.\n\nTo compensate liquidity providers on fee-bearing markets, Polymarket operates a [**maker rebate**](https://docs.polymarket.com/market-makers/maker-rebates) program. Effective March 30, rebates are [50% for finance](https://docs.polymarket.com/trading/fees#markets-with-fees) markets, [20% for crypto](https://docs.polymarket.com/trading/fees#markets-with-fees) markets, and [25% for all other](https://docs.polymarket.com/trading/fees#markets-with-fees) fee-charging markets. Rebates are paid daily in USDC.e based on a maker's proportional share of taken liquidity.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/9c832519993e8df79780a6787af423a09dc3aad3-2048x1185.png?w=800)\n\nFrom January 6 to March 25, Polymarket generated [$1.8 million in taker fees](https://dune.com/queries/6538205/10339674), with fees limited to crypto and select sports markets. Effective March 30, taker fees apply to nearly all Polymarket markets. Kalshi has charged taker fees throughout its existence and, as of [March 25](https://dune.com/datadashboards/kalshi-overviewhttps://dune.com/datadashboards/kalshi-overview), generated [$56.3 billion in cumulative volume](https://dune.com/queries/5910828/9546583), suggesting prediction market users tolerate fees when the underlying product is compelling. \n\n**The question is whether Polymarket demand proves inelastic or compresses as users encounter fees for the first time.**\n\n### POLY Token Utility\n\nPolymarket has not released an official utility framework or value capture mechanism for the POLY token. On [October 24, 2025](https://www.coindesk.com/markets/2025/10/24/polymarket-will-launch-token-and-airdrop-after-u-s-relaunch-cmo-says), Polymarket CMO Matthew Modabber confirmed plans for a POLY token and a future airdrop. During this announcement, [he stated](https://www.coindesk.com/markets/2025/10/24/polymarket-will-launch-token-and-airdrop-after-u-s-relaunch-cmo-says), \"We want POLY to be a token with true utility and longevity, and to be around forever.\" \n\nThree areas of Polymarket's architecture point to where that POLY utility could materialize, the first is liquidity provider incentives. **We believe that over time, market accuracy will become the core product of prediction markets.** Accuracy requires liquidity, and liquidity requires incentives. POLY rewards on top of existing USDC.e maker rebates would give market makers a direct reason to provide deeper liquidity, tightening spreads, and improving the probability accuracy that institutional partners like the NYSE already demand.\n\nThe second is resolution staking. POLY could replace UMA tokens as the staking collateral for proposing and disputing market resolutions, with correct voters earning tokens and incorrect voters losing them. Beyond potential improvements to the existing vulnerabilities in their UMA optimistic oracle architecture, this mechanism would tie token demand directly to the platform's core function.\n\nThe third is fee rebates for POLY stakers. A staking-based taker fee discount would create a direct incentive for high-volume traders to accumulate and hold POLY, tying token demand to platform usage in the same way trading fee discounts have worked on centralized exchanges.\n\nNone of these mechanisms have been confirmed. Each draws on established DeFi precedent and fits Polymarket's existing architecture. Investors should treat them as informed speculation until Polymarket makes an official announcement.\n\n## State of Polymarket\n\nFrom January 2025 through August 2025, Polymarket ranked first among prediction markets by trading volume, with [72% share ($12.0 billion)](https://dune.com/queries/6689536/10534249) in cumulative notional volume. \n\nCompetition intensified over the last six months as Polymarket's position shifted from dominant to contested. From September 2025 through February 2026, Kalshi led prediction markets with a [40% share ($39.6 billion)](https://dune.com/queries/6689536/10534249), followed by Polymarket at [31% ($32.1 billion)](https://dune.com/queries/6689536/10534249) and Opinion at [23% ($22.9 billion)](https://dune.com/queries/6689536/10534249).\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/a6068a1e9c6dfd9dafb658edb7e31816ca3a6398-2048x1106.png?w=800)\n\nDespite the share loss, the underlying business continued to grow across all key metrics. From September 2025 to February 2026, Polymarket's monthly trading volume grew 383%, from [$1.6 billion to $7.9 billion](https://dune.com/datadashboards/polymarket-overview). Monthly transactions grew 1,385%, from [5.4 million to 80.7 million](https://dune.com/datadashboards/polymarket-overview). Monthly active users grew 172%, from [246,600 to 671,400](https://dune.com/datadashboards/polymarket-overview). From September 30, 2025, to February 28, 2026, OI grew 141% from [$161.3 million to $389.0 million](https://dune.com/datadashboards/polymarket-overview). \n\nTwo factors drove this growth. The first is expanding mindshare. Prediction markets, specifically Polymarket and Kalshi, entered mainstream awareness in 2025 through significant marketing campaigns and media partnerships. In Q4 2025, Polymarket secured partnerships with the [NHL](https://www.nhl.com/news/nhl-announces-landmark-multiyear-partnerships-with-kalshi-polymarket), [UFC](https://www.cnbc.com/2025/11/13/tko-polymarket-strike-multiyear-deal-to-integrate-prediction-markets-into-ufc-events.html), [Golden Globe Awards](https://variety.com/2026/film/news/polymarket-golden-globes-prediction-market-partner-1236627204/), and others, each of which embedded Polymarket odds directly into live broadcasts and partner platforms. For many non-crypto-native users, this was their first exposure to prediction markets, and the media distribution converted passive audiences into active participants on the platform.\n\nThe second is airdrop farming. Polymarket was already growing organically before the POLY announcement, but the token announcement was a clear accelerant, and separating organic demand from farming activity in current volume figures is difficult.\n\nBefore the POLY airdrop announcement on October 24, 2025, the single-largest-volume month in Polymarket's history was October 2024, with [$4.3 billion in volume](https://dune.com/queries/6689536/10534249), driven by the U.S. Presidential Election. After Modabber's airdrop announcement, November 2025 generated [$4.4 billion in volume](https://dune.com/queries/6689536/10534249), and every month since has surpassed October 2024's record by a significant margin. While Polymarket was already growing organically, the POLY airdrop announcement likely contributed additional demand from farming activity on top of existing organic growth.\n\nFrom September 2025 to February 2026, Kalshi\u2019s monthly trading volume grew 259%, from [$2.9 billion to $10.4 billion](https://dune.com/datadashboards/polymarket-overview). This growth occurred without an airdrop announcement, suggesting genuine growing interest in prediction markets rather than volume driven by farming activity on Polymarket. While Polymarket's mainstream penetration suggests a strong volume floor, post-airdrop protocols typically [retain 10-20% of pre-airdrop volume](https://paragraph.com/@sixdegreelab-3/chapter-1-retention-a-review-by-sixdegree-of-airdrop-and-liquidity-mining#:~:text=Selected%20airdrops%20including%201inch%2C%20Uniswap%2C%20Optimism%2C%20Arbitrum%20and%20ParaSwap%20have%20a%20retention%20rate%20under%2020%25%20after%20four%20months%20and%20under%2015%25%20after%2012%20months), and investors should treat current volume figures with some caution until post-TGE retention data is available.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/6e44c5cff368c2d68aeafc4a3210437c3f3371aa-2048x1152.png?w=800)\n\nPolymarket's volume is distributed across three primary categories: sports, politics, and crypto. In February 2026, sports led with a [37% share ($3.0 billion)](https://dune.com/queries/5910984/9546787), followed by [crypto at 30% ($2.4 billion)](https://dune.com/queries/5910984/9546787) and [politics at 28% ($2.2 billion)](https://dune.com/queries/5910984/9546787). Other categories, led by culture and economy markets, accounted for the remaining [5% share ($342.8 million)](https://dune.com/queries/5910984/9546787). \n\nAs of February 28, Polymarket had $389.0 million in OI, with the same top three categories in a different order. Politics led with a [60% share ($232.9 million)](https://dune.com/queries/5910984/9546787), followed by [sports at 17% ($67.0 million)](https://dune.com/queries/5910984/9546787) and [crypto 16% ($64.1 million)](https://dune.com/queries/5910984/9546787). Other categories accounted for the remaining [7% share ($25.0 million)](https://dune.com/queries/5910984/9546787).\n\nPolymarket has three independent categories driving volume, which is a key strength, but each operates on different catalysts. Sports volume follows fixed seasonal schedules and marquee events, with the NFL season providing the highest-volume window each year. Politics volume is cyclical, peaking around U.S. elections, with the 2026 midterms and 2028 presidential cycle representing the next natural volume catalysts. Crypto volume is driven by 5-min and 15-min up/down markets launched in October 2025, which generate high turnover through short resolution cycles. Each category's growth trajectory differs, so we modeled them separately in the valuation section.\n\nWith Polymarket's market position established, we turn to valuation. The core question is whether the [$20 billion FDV](https://www.wsj.com/finance/kalshi-and-polymarket-are-each-eyeing-roughly-20-billion-valuations-d7b9c5d8) Polymarket was reported to be seeking from investors on March 7 reflects reasonable expectations for future fee generation, or whether the market is mispricing the opportunity.\n\n## Valuing Polymarket (POLY)\n\nPolymarket is valued on a multiple of projected 2028 fees. Polymarket operates as a pure-play prediction market with no L1 monetary premium or diversified revenue streams, making fee generation the appropriate valuation basis. Taker fees launched on January 6, 2026, and as of March 30, are effective across all markets except geopolitical. Revenue before March 30 does not represent steady-state monetization, as taker fees only recently expanded beyond crypto and sports markets. Projecting to 2028 provides sufficient runway for the fee rollout to mature across all fee-charging categories.\n\nThis valuation is based solely on Polymarket\u2019s volume and fee projections. Polymarket U.S. operates as a separate legal entity and is excluded from this analysis.\n\nPrediction markets remain a relatively nascent primitive, and each major category operates on structurally different catalysts with distinct growth trajectories. Projecting against a single aggregate TAM would obscure these dynamics. We model sports, politics, crypto, and other categories independently and map out the bear, base, and bull cases using six assumptions that cover four category-specific volume projections, take rates, and multiples. \n\n_Our full valuation model can be viewed [here](https://docs.google.com/spreadsheets/d/1JpRHkS--eHIii_P-PhsM1nrOJtfi56Qmg17qO6J9Mqk/edit?usp=sharing)._\n\n### Polymarket Category Volume Assumptions\n\n#### Sports volume\n\nTo calculate the growth rate, we compared Polymarket sports volumes during _September 2024 to February 2025 ([$6.2 billIion](https://dune.com/queries/5910984/9546787)) with those from September 2025 to February 2026 ([$10.5 billion](https://dune.com/queries/5910984/9546787))_. This window is annually the highest-volume period in U.S. sports betting, driven by the NFL season. Measuring the same period in subsequent years provided a like-for-like basis for isolating the true volume trajectory.\n\nThis comparison yielded a 68% YoY growth rate. We expect the base growth rate to be below 68% due to potential Polymarket U.S. volume cannibalization. To account for these factors, **we applied growth rates of 30%, 50%, and 100% in our bear, base, and bull cases, respectively.**\n\nIn 2025, Polymarket generated [$10.6 billion in sports volume](https://dune.com/queries/5910984/9546787), and we applied the above growth rates to this figure to arrive at our 2028 projections.\n\nWe benchmarked these projections against the 2028 global sportsbook handle. In 2025, the U.S. sportsbook handle reached [$165.0 billion](https://www.sportsbookreview.com/news/us-betting-revenue-tracker/). Assuming global legal sportsbook handle equals 2x the U.S. handle, a conservative estimate, the 2025 global handle stood at approximately $330.0 billion. The global legal sportsbook handle grew at a [10% CAGR from 2022 to 2025](https://www.igamingdirect.com/reports/2025/06/19/2025-global-sports-betting-market-growth-report/#:~:text=CAGR%20(2021%E2%80%932025)%3A%2010.3%25). Applying that rate forward, the 2028 global sportsbook handle will reach $442.8 billion.\n\n* **Bear:** 30% YoY growth brings Polymarket sports volume to $23.3 billion by 2028, 5% of the projected 2028 global sportsbook handle. Competition intensifies from incumbent sportsbooks, Kalshi, and other onchain entrants like Opinion, Novig, and Hyperliquid, while Polymarket U.S. cannibalizes domestic sports volume from the global platform.\n* **Base:** 50% YoY growth brings Polymarket sports volume to $35.7 billion by 2028, 8% of the projected 2028 handle. New users continue onboarding, and average volume per wallet increases. As of January 13, 2026, [59% of Polymarket wallets](https://messari.io/report/polymarkets-best-growth-path#:~:text=59%25%20(1.1%20million,moving%20the%20price.) had bet less than $1,000 in all-time volume. In 2024, DraftKings averaged [$13,000 annual volume per user](https://messari.io/report/polymarkets-best-growth-path#:~:text=user%2C%20or%20about-,%2413%2C000%20annualized,-.%20That%20single%2Dyear), meaning most Polymarket wallets have significant room to grow before reaching traditional sportsbook levels.\n* **Bull:** 100% YoY growth brings Polymarket sports volume to $84.7 billion by 2028, 19% of the projected 2028 handle. Traditional sportsbook users migrate significantly to Polymarket as peer-to-peer pricing advantages in prediction markets become widely recognized and distribution improves.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/070a04828aad19ca0a633b225bbf93e89714e0a3-2048x882.png?w=800)\n\n#### Politics volume\n\nPolitics volume is heavily correlated to the U.S. Presidential election cycle, with volume concentrated in the months immediately preceding and during the election. This surge was evident from [September through November 2024](https://dune.com/queries/5910984/9546787). To exclude this influence and isolate the underlying growth trajectory, we compared volume during _January to June 2025 ([$3.6 billion](https://dune.com/queries/5910984/9546787)) with that from July to December 2025 ([$5.2 billion](https://dune.com/queries/5910984/9546787))_, periods unaffected by election-driven demand.\n\nThis comparison resulted in a **46% increase, which we used as our base growth rate**. The **bear and bull cases apply 0.5x and 2x multipliers, resulting in 23% and 92%, respectively.**\n\nOn top of the base growth rate, we applied election-cycle multipliers to capture the structural volume boost from the U.S. political calendar: a 20% multiplier in 2026 to account for the midterm elections, and a 40% multiplier in 2028 for the U.S. presidential election. We calculated the presidential election multiplier by comparing 2024 annualized politics volume ([$12.0 billion](https://dune.com/queries/5910984/9546787)) against the 2025 volume ([$8.7 billion](https://dune.com/queries/5910984/9546787)). This resulted in a 40% difference, which reflects the volume uplift from a presidential election year. We applied half that rate, 20%, for midterm elections.\n\nIn 2025, Polymarket generated [$8.7 billion in political volume](https://dune.com/queries/5910984/9546787), and we applied the above growth rates (plus election multipliers) to this figure to arrive at our 2028 projections.\n\n* **Bear:** 23% YoY growth (plus election multipliers) brings Polymarket politics volume to $18.1 billion by 2028. Competition from Kalshi, Robinhood, and traditional sportsbooks entering political markets erodes Polymarket's first-mover advantage as the category matures.\n* **Base:** 46% YoY growth (plus election multipliers) brings Polymarket politics volume to $32.4 billion by 2028. The base growth rate holds as traditional finance firms increasingly adopt political markets as macro hedging tools for regulatory and trade policy outcomes.\n* **Bull:** 92% YoY growth (plus election multipliers) brings Polymarket politics volume to $80.2 billion by 2028. Non-U.S. interest in U.S. political outcomes drives significant international demand, and mainstream media adoption of political odds as a standard reference tool creates a self-reinforcing awareness cycle. Polymarket Global experiences minimal cannibalization from Polymarket U.S.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/21f6b306f8e9521bd542458afe2cb949a0be840c-2048x882.png?w=800)\n\n#### Crypto volume\n\nOn [October 21, 2025](https://www.binance.com/en/square/post/31303183204065), Polymarket launched [15-min up/down markets](https://polymarket.com/crypto) for [BTC](https://polymarket.com/crypto/bitcoin), [ETH](https://polymarket.com/crypto/ethereum), [SOL](https://polymarket.com/crypto/solana), and [XRP](https://polymarket.com/crypto/xrp), followed shortly by [5-min markets](https://polymarket.com/crypto). Crypto volume spiked after these launches, creating a sharp jump in activity that is unlikely to repeat.\n\nComparing volume from before and after this launch would overstate long-term growth, since it would treat this one-time jump as sustainable. To avoid that, we compared two equal 10-week periods after the spike: _October 27, 2025, to January 4, 2026 ([$2.8 billion](https://dune.com/queries/5910984/9546779)),_ and _January 5 to March 8, 2026 ([$5.5 billion](https://dune.com/queries/5910984/9546779))._ This isolated volume growth after the new baseline was established.\n\nThis comparison resulted in a **92% increase, which we used as our base growth rate.** **The bear and bull cases apply 0.5x and 2x multipliers, resulting in 46% and 184%, respectively.**\n\nIn 2025, Polymarket generated [$5.4 billion in crypto volume](https://dune.com/queries/5910984/9546787), and we applied the above growth rates to this figure to arrive at our 2028 projections.\n\n* **Bear:** 46% YoY growth brings Polymarket crypto volume to $16.9 billion by 2028. After POLY TGE, volume contracts sharply as airdrop farming washout occurs and 5-min and 15-min market novelty fades.\n* **Base:** 92% YoY growth brings Polymarket crypto volume to $38.3 billion by 2028. Fast-resolving markets prove durable after POLY TGE as institutional arbitrageurs enter on deeper liquidity, and [pre-market crypto events](https://polymarket.com/crypto/pre-market) (i.e., pre-TGE, or Pre-IPO projections) find product-market fit.\n* **Bull:** 184% YoY growth brings Polymarket crypto volume to $123.7 billion by 2028. Fast-resolving markets establish themselves as the dominant crypto speculation vertical, and markets expand into new timeframes and assets. [Pre-market crypto events](https://polymarket.com/crypto/pre-market) find strong product-market fit (i.e., as a hedging tool for private investors).\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/53a1c01184f5d71d1c7d9bfb64fe2705ab680a48-2048x882.png?w=800)\n\n#### Other volume\n\nThe \u2018other\u2019 category covers all markets outside Polymarket's core three verticals, with culture and economy leading the segment in 2025 volume. To set a baseline, we compared average weekly volume over the last eight weeks of 2024 ([$38.7 million](https://dune.com/queries/5910984/9546787)) against the 2025 full-year weekly average ([$56.2 million](https://dune.com/queries/5910984/9546787)).\n\nWe chose that window to exclude the November 2024 U.S. presidential election spike. Before the 2024 U.S. presidential election, Polymarket had almost no mainstream audience, so \u2018other\u2019 markets generated low volume. The election drew thousands of new users to the platform, and after it ended, those users stayed and began trading culture, economy, and other markets. Using full-year 2024 as a baseline would average in nine months of negligible volume, so we anchored to the last eight weeks of 2024, the first period where \u2018other\u2019 markets had a real user base behind them.\n\nThis comparison resulted in a **45% increase, which we used as our base growth rate. The bear and bull cases apply 0.5x and 2x multipliers, resulting in 23% and 90%, respectively.**\n\nIn 2025, Polymarket generated [$2.9 billion in \u2018other\u2019 category volume](https://dune.com/queries/5910984/9546787), and we applied the above growth rates to this base to arrive at our 2028 projections.\n\n* **Bear:** 23% YoY growth brings \u2018other\u2019 category volume to $5.4 billion by 2028. Experimental categories fail to find sustained product-market fit, liquidity remains too thin for institutional use cases, and users concentrate activity in the core Sports, Politics, and Crypto verticals.\n* **Base:** 45% YoY growth brings \u2018other\u2019 category volume to $9.0 billion by 2028. A few categories break out, such as economic indicators, culture markets, or weather hedging.\n* **Bull:** 90% YoY growth brings \u2018other\u2019 category volume to $20.3 billion by 2028. Multiple categories achieve product-market fit simultaneously. For example, weather derivatives attract institutional hedging demand, economic indicator markets establish themselves as macro trading tools, and culture markets expand as liquidity deepens.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/32c896487ca1c99e23774eb8c98ce2ea6585cf59-2048x882.png?w=800)\n\n### Monetization Assumptions \n\n#### Take Rate \n\n**We assume Polymarket's take rate equals 50 bps, 70 bps, and 90 bps in our bear, base, and bull cases, respectively.** For our lower bound, we assume that Polymarket\u2019s take rate starts to converge towards Robinhood's Q4 2025 crypto take rate of [27 bps](https://investors.robinhood.com/news-releases/news-release-details/robinhood-reports-fourth-quarter-and-full-year-2025-results) ([$221 million in fees from $82 billion in volume](https://investors.robinhood.com/news-releases/news-release-details/robinhood-reports-fourth-quarter-and-full-year-2025-results)), but still remains elevated in 2028. For our upper bound, we assumed that Polymarket\u2019s take rate will remain below Kalshi\u2019s 2025 take rate of [115 bps](https://finance.yahoo.com/news/kalshi-fee-revenue-2025-263-145801350.html) ([$263.5 million in fees from $22.9 billion in volume](https://finance.yahoo.com/news/kalshi-fee-revenue-2025-263-145801350.html)).\n\nPolymarket launched taker fees on select crypto markets on January 6, 2026, and expanded to nearly all markets effective March 30, 2026. We expect the take rate to increase as fee-bearing volume scales across categories through 2028.\n\n* **Bear:** Take rate equals 50 bps. Competition from Kalshi and emerging platforms limits pricing power, and peak effective fee rates compress as the prediction market sector matures.\n* **Base:** Take rate equals 70 bps. Polymarket peak effective fee rates established on March 30 remain intact.\n* **Bull:** Take rate equals 90 bps. Polymarket increases peak effective fee rates for all high-volume markets. At 90 bps, the Polymarket\u2019s projected bull take rate remains below Kalshi's 2025 take rate, reflecting competitive compression as prediction market pricing normalizes over the next three years.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/6862564646f0e0ee40b2c3038f218bbdcccc298c-2048x882.png?w=800)\n\n#### Multiple\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/298a3a329d0609a4816b555096c14baa91dcd540-2048x1185.png?w=800)\n\nWe assume Polymarket trades at 20x, 30x, and 40x fees in our bear, base, and bull cases, respectively. These multiples are applied to the 2028 projected fees. On [March 19, 2026](https://www.bloomberg.com/news/articles/2026-03-19/kalshi-gets-1-billion-in-new-funding-at-22-billion-valuation), Kalshi raised $1 billion at a [$22 billion valuation](https://www.bloomberg.com/news/articles/2026-03-19/kalshi-gets-1-billion-in-new-funding-at-22-billion-valuation). With [$263.5 million in 2025 fees](https://finance.yahoo.com/news/kalshi-fee-revenue-2025-263-145801350.html), the $22 billion FDV equals an 83.5x fees multiple. We used that multiple as a ceiling for the prediction markets sector. As fee growth is realized through 2028, Kalshi's implied multiple will compress naturally. Our 2028 bull case multiple of 40x is therefore more conservative than Kalshi's current 83.5x multiple.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/450b0aa38b1a921d1c67dc08a5a8c31d528c06e6-2048x882.png?w=800)\n\n* **Bear:** The market assigns a 20x multiple on weak growth visibility and unconfirmed POLY value accrual. Take rate stalls below expectations, post-TGE volume contraction weighs on projections, and POLY trades at a steep discount to peers with more defined token distribution mechanisms.\n* **Base:** The market assigns a 30x multiple on steady peak effective fee rates and volume growth projections. The market prices Polymarket as a credible but not leading protocol with a maturing fee structure.\n* **Bull:** The market assigns a 40x multiple on increasing peak effective fee rates, confirmed POLY utility, and Polymarket establishing itself as the dominant prediction market protocol. At 40x, POLY trades below Kalshi's implied 83x private round multiple, reflecting the typical compression between private and liquid token valuations and Polymarket's less mature fee structure.\n\n### Polymarket Valuation Results\n\nUnder our assumptions, Polymarket's base-case FDV is $24.2 billion by 2028, with a range from $6.4 billion (bear case) to $111.2 billion (bull case).\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/b12805506aff74827adf5abb55dbfa235bb7ef45-2048x1468.png?w=800)\n\n* **Bear:** Total volume across all categories reaches $63.6 billion by 2028. A 50 bps take rate generates $318.0 million in annual fees. **At a 20x multiple, the implied FDV is $6.4 billion.**\n* **Base:** Total volume across all categories reaches $115.4 billion by 2028. A 70 bps take rate generates $807.9 million in annual fees. **At a 30x multiple, the implied FDV is $24.2 billion.**\n* **Bull:** Total volume across all categories reaches $309.0 billion by 2028. A 90 bps take rate generates $2.8 billion in annual fees. **At a 40x multiple, the implied FDV is $111.2 billion.**\n\n#### Interpretation\n\n**Under our base case, Polymarket reaches a $24.2 billion FDV by 2028**, just 21% above the $20 billion valuation Polymarket has been rumoured to seek as of [March 7, 2026](https://www.wsj.com/finance/kalshi-and-polymarket-are-each-eyeing-roughly-20-billion-valuations-d7b9c5d8). At $20 billion, investors would be paying just below base case execution with minimal upside remaining. The bear case at $6.4 billion represents substantial downside from current levels, and the risk is real: post-TGE volume retention and the blended take rate at scale remain unproven.\n\nTake rate and multiple are the primary valuation levers across bear, base, and bull cases. Multiple is market-assigned and reflects investor sentiment toward the prediction market category, POLY token utility, and growth expectations. Polymarket does not control it, while Polymarket does control taker fees. With taker fees now applicable to nearly all markets, effective March 30, the fee rates themselves are set. The blended take rate, however, moves with volume, and if it compresses in high-fee markets, the blended take rate falls with it. **Polymarket's focus now is adaptability: maximize fees in markets where demand is inelastic, and adjust rates down in markets where volume proves sensitive to price.** Sustaining volume growth in all fee-charging markets will determine whether the blended take rate reaches base case expectations.\n\nThe bull case implies a $111.2 billion FDV, 5.6x the rumoured $20 billion valuation. Reaching it **requires $309 billion in total 2028 volume, a 90 bps blended take rate, and a 40x market multiple. Each variable is achievable in isolation. Achieving all three simultaneously is the challenge.**\n\n### Sensitivity Tables\n\nWithin each scenario, the valuation remains sensitive to fees generated and the \u2018multiple\u2019 factor that together determine how projected fee generation translates into an implied FDV. To illustrate this relationship, we conducted a sensitivity analysis across all three scenarios.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/1426bcb887ffa1a0792b34aec43db9bd0ccc0e8b-2048x1098.png?w=800)\n\n**In the bear case, Polymarket\u2019s valuation clusters within a $600.0 million to $17.2 billion range across revenues of $159.0 to 477.0 million, and multiples of 4x to 36x.** The biggest unknown in the bear case is the multiple. While our bear case is 20x for this scenario, there are strong arguments to be made for a much lower multiple. For example, [DraftKings (DKNG)](https://finance.yahoo.com/quote/DKNG/) and [FanDuel (FLUT)](https://finance.yahoo.com/quote/FLUT/) trade at low P/S multiples (1.8x and 1.2x, respectively) due to the high-cost nature of running a sportsbook. If Polymarket falls into the same trap of high customer acquisition and retention costs that have harmed sportsbooks\u2019 bottom line, then it will likely trade at the lower range of these multiples.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/bb660324171bc65f4e4dd646534176ec61f6fdbd-2048x1098.png?w=800)\n\n**In the base case, Polymarket\u2019s implied FDV spans a broader range of $3.1 billion to $65.4 billion, reflecting balanced sensitivity to both fees ($307.9 million to $1.3 billion) and multiples (10x to 50x).** The valuation responds more linearly to changes in assumptions, as outcomes are driven less by existential adoption risk and more by how investors price fee durability and growth optionality. This range provides the most informative valuation band, consistent with prediction markets, and Polymarket alongside it, establishing themselves as new, scalable market infrastructure that is able to capture previously underserved demand.\n\n![](https://cdn.sanity.io/images/2bt0j8lu/production/9edf05a4e7398c7ea3d8e694e5498d1de5ca8993-2048x1098.png?w=800)\n\n**In the bull case, Polymarket\u2019s valuation ranges from $26.0 billion to $258.0 billion, driven primarily by sensitivity to multiples (20x to 60x) and secondarily by fee outcomes ($1.3 billion to $4.3 billion).** The biggest unknown in the bull case is if Polymarket will be in the early or late stages of its growth cycle. If strong growth can be expected post-2028, it can retain a multiple closer to Kalshi\u2019s current fee multiple of 83.5x. However, if the reverse is true and Polymarket\u2019s post-2028 growth appears to be slowing down, it would like trade at a multiple more consistent with traditional exchange infrastructure, such as [CME](https://finance.yahoo.com/quote/CME/) (16.7x) and [NDAQ](https://finance.yahoo.com/quote/NDAQ/) (9.2x).\n\nThe sensitivity analysis underscores that Polymarket\u2019s implied FDV is not a single point estimate but a spectrum shaped by fee outcomes and investor expectations. Our base-case estimate of $24.2 billion sits at the center of the base-case sensitivity range, providing a defensible valuation anchor while acknowledging both downside risk under weaker multiples and upside potential if Polymarket is re-rated as an institutional trading venue. At the current rumored $20.0 billion FDV, investors are underwriting base case execution with modest upside. However, the investors who got in during any of the 2025 rounds have significant upside for both the base and bull cases. \n\n## Risks \n\nPolymarket\u2019s valuation rests on prediction market demand, protocol monetization, and competitive positioning that are far from certain. Below, we outline the key risk factors for Polymarket.\n\n### Legislative/Regulatory Scrutiny\n\nIn recent months, prediction markets have come under increased [scrutiny](https://www.nytimes.com/2026/03/23/opinion/prediction-markets-gambling.html) as they have grown in popularity, particularly as an alternative venue for sports-related speculation. Because prediction markets do not operate under the same regulatory framework as traditional sportsbooks, critics have argued that they function as unregulated gambling platforms.\n\nOn [March 23](https://www.wsj.com/finance/regulation/lawmakers-to-introduce-bipartisan-bill-banning-sports-bets-on-prediction-markets-17d2e272?gaa_at=eafs&gaa_n=AWEtsqcGDsdkO86Wf_WAlTkB8DJACD2GGsyOYC_u33wc3bgNjSeD0ytUzYGkvP6YjFg%3D&gaa_ts=69c43278&gaa_sig=MYenoMqdfI1EYq_Bwa5_9DhvATQO0ODbYEuoynYVd-ZGGrgyymlcIJ4h0tYbkj8a4yIJlE8n0LWkGXccxr3n3g%3D%3D), a bipartisan bill was [introduced](https://www.wsj.com/finance/regulation/lawmakers-to-introduce-bipartisan-bill-banning-sports-bets-on-prediction-markets-17d2e272?gaa_at=eafs&gaa_n=AWEtsqcGDsdkO86Wf_WAlTkB8DJACD2GGsyOYC_u33wc3bgNjSeD0ytUzYGkvP6YjFg%3D&gaa_ts=69c43278&gaa_sig=MYenoMqdfI1EYq_Bwa5_9DhvATQO0ODbYEuoynYVd-ZGGrgyymlcIJ4h0tYbkj8a4yIJlE8n0LWkGXccxr3n3g%3D%3D) in the U.S. Senate seeking to prohibit prediction markets from offering contracts tied to sporting events. Should regulators impose further restrictions on the types of contracts that can be offered, or on prediction markets more broadly, Polymarket\u2019s trading volumes and growth trajectory could be materially impacted.\n\n### Polymarket U.S. Cannibalization\n\nAs noted earlier, Polymarket (global) and Polymarket U.S. operate as separate legal entities. This report focuses solely on Polymarket (global). If the value generated by the U.S. entity does not accrue to the global entity, there is a risk of economic cannibalization.\n\nFor example, if future growth, particularly in high-volume verticals such as sports, occurs primarily within Polymarket U.S., then Polymarket (global) may experience slower growth or declining relative market share.\n\n### High Customer Acquisition Costs\n\nPrediction markets share structural similarities with sportsbooks, particularly in terms of user acquisition and retention dynamics. Historically, sportsbooks have incurred high customer acquisition costs through aggressive promotions and marketing campaigns.\n\nIf switching costs between prediction market platforms remain low, Polymarket may need to rely on similar incentives to attract and retain users. This could compress margins by offsetting fee revenue with higher marketing and promotional expenses.\n\n### Increased Competition\n\nThe prediction market sector is experiencing rapid growth, leading to increased competition. Kalshi has grown meaningfully to the point where the market could be characterized as a duopoly. At the same time, competition from onchain prediction markets is intensifying.\n\nLooking ahead, additional entrants are likely, including both traditional operators (i.e., sportsbooks) and crypto-native platforms such as [Hyperliquid](https://x.com/HyperliquidX/status/2018327360723202167) or [Novig](https://messari.io/project/novig/fundraising). Increased competition could pressure Polymarket\u2019s market share, fee structure, and long-term profitability.\n\n### Post-Airdrop Activity Decrease\n\nA portion of Polymarket\u2019s recent activity is likely driven by airdrop farming, though the magnitude is unclear. If a meaningful share of user engagement has been driven by airdrop farming, activity levels, and consequently fee generation, could decline following the distribution event. This creates uncertainty around the durability of current volumes and the sustainability of user growth post-airdrop.\n\n### Market Integrity\n\nMarket integrity remains a critical factor for long-term adoption and credibility. Polymarket\u2019s no-KYC framework, while lowering friction for user participation, may increase the risk of insider trading or information asymmetries. If users perceive that markets are being exploited by participants with privileged information, trust in the platform could erode.\n\nAdditionally, Polymarket relies on UMA\u2019s optimistic oracle for market resolution. Any further high-profile disputes, delays, or controversial resolutions could undermine confidence in the platform\u2019s ability to fairly and accurately settle markets. Repeated incidents may reduce user participation and negatively impact trading volumes over time.\n\n## Conclusion\n\nPolymarket has established itself as a dominant prediction market, generating $31.0 billion in volume, a 31% share, from September 2025 to February 2026. On October 7, 2025, Intercontinental Exchange agreed to invest up to $2 billion at a $9 billion FDV, validating institutional conviction. On March 30, Polymarket extends taker fees to nearly all markets, the most significant step yet toward monetizing its volume. If volume sustains through the fee expansion, Polymarket has a clear path to justifying a premium POLY token valuation.\n\n**Our base case values Polymarket at a $24.2 billion FDV by 2028, with the range spanning $6.4 billion in the bear case to $111.2 billion in the bull case.** The base case is 21% above the sought valuation of $20 billion. The bull case requires fee expansion, volume growth, and fee multiple expansion simultaneously, but the bear case is a reminder that post-TGE volume contraction and fee-driven demand compression are real risks. The most critical variable is volume retention after taker fee expansion, and we urge market participants to track volume across newly fee-charging markets in the 60-90 days following March 30 before drawing firm conclusions about Polymarket\u2019s long-term value.", "hook": "Valuation of Polymarket's POLY using a ground-up fee multiple framework, with scenario analysis across sports, politics, crypto, and other category volume projections, take rates, and fee multiples.", "publishDate": "2026-03-26T15:01:00Z", "readingTimeInMinutes": 32.74666666666667, "slug": "a-valuation-of-polymarket-poly", "subscriptionTier": "enterprise", "summary": "Prediction markets are crypto's latest breakout sector. In February 2026, the sector processed $23.2 billion in monthly volume, up 1,218% year-over-year. Polymarket has led that expansion, generating $31.0 billion in volume and a 31% category share from September 2025 to February 2026. In October 2025, Intercontinental Exchange agreed to invest up to $2 billion at a $9 billion valuation, validating institutional conviction in the platform.\n\nPolymarket operates as a peer-to-peer prediction market across sports, politics, crypto, and other categories, letting users trade directly against each other on a central limit order book. On March 30, Polymarket extends taker fees to nearly all markets, its most significant step toward monetizing the volume it has built. Whether that monetization translates to durable revenue is the central question for POLY investors.\n\nThis report builds a ground-up valuation of Polymarket across market category volume, take rates, and fee multiples to test whether the $20 billion FDV Polymarket was reportedly seeking as of March 7, 2026, is justified by forward fee generation.", "tags": [ { "id": "4d0bee6c-b154-42a4-9db2-ed6273808bac", "name": "Valuations" }, { "id": "ddd672c1-e388-472b-8f88-c60f95196e0d", "name": "Prediction Markets" } ], "title": "A Valuation of Polymarket (POLY)", "previewImage": "https://cdn.sanity.io/images/2bt0j8lu/production/5c9cb3fb8c68658250bdf288ccac0b1636ddc89d-6400x3604.png" } } } }, "description": "Default response" }, "400": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Bad Request" }, "403": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Forbidden" }, "404": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Report does not exist for reportId" }, "500": { "content": { "application/json": { "schema": { "properties": { "data": {}, "error": { "type": "string" } }, "required": [ "data" ], "type": "object" } } }, "description": "Internal Server Error" } }, "security": [ { "apiKey": [] } ], "summary": "Get a research report by report ID", "tags": [ "research/Research Reports" ] } } }, "components": { "schemas": { "Pagination": { "properties": { "limit": { "format": "int64", "type": "integer" }, "page": { "format": "int64", "type": "integer" }, "totalPages": { "format": "int64", "type": "integer" }, "totalRows": { "format": "int64", "type": "integer" } }, "required": [ "limit", "page", "totalPages", "totalRows" ], "type": "object" }, "ResearchReport": { "properties": { "assetIds": { "items": { "type": "string" }, "type": "array" }, "assets": { "items": { "$ref": "#/components/schemas/researchAsset" }, "type": "array" }, "authors": { "items": { "$ref": "#/components/schemas/Author" }, "type": "array" }, "content": { "description": "Polymorphic field of either HTML or Markdown", "type": "string" }, "createdAt": { "format": "date-time", "type": "string" }, "hook": { "type": "string" }, "id": { "type": "string" }, "publishDate": { "format": "date-time", "type": "string" }, "readingTimeInMinutes": { "format": "double", "type": "number" }, "slug": { "type": "string" }, "subscriptionTier": { "type": "string" }, "summary": { "type": "string" }, "tags": { "items": { "$ref": "#/components/schemas/Tag" }, "type": "array" }, "title": { "type": "string" }, "updatedAt": { "format": "date-time", "type": "string" } }, "required": [ "assetIds", "assets", "authors", "content", "createdAt", "hook", "id", "publishDate", "readingTimeInMinutes", "slug", "subscriptionTier", "summary", "tags", "title", "updatedAt" ], "type": "object" }, "researchAsset": { "type": "object", "description": "Schema for researchAsset", "properties": {}, "additionalProperties": true }, "Tag": { "type": "object", "description": "Schema for Tag", "properties": {}, "additionalProperties": true }, "Author": { "type": "object", "description": "Schema for Author", "properties": {}, "additionalProperties": true } }, "securitySchemes": { "apiKey": { "in": "header", "name": "X-Messari-API-Key", "type": "apiKey" } } } }