TON blockchain freezes $2.6 billion worth of tokens inactive

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

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

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

The TON community has long speculated that access to these inactive wallets may have been lost. Some say that having unused TON only increases uncertainty for network participants. TON is used as a natural gas fee required to gain access to decentralized services on the TON network. About three years earlier, Telegram abandoned development on TON after the US Securities and Exchange Commission accused the company of violating security laws regarding its $1.7 billion initial coin offering in 2018. Since then, the project has been turned over to community developers.