Telegram Scales TON Network and Ethereum Classic Prepares for Halving: Impact on Fees and Miners

2026/05/07 06:33:02

Custom

Traditional proof-of-work systems like Ethereum Classic face revenue compression for miners during block reward cuts, but the TON network is countering this trend by drastically lowering user fees to drive mass-market adoption. When Telegram announced it would become a major validator on May 4, 2026, the underlying market dynamics for network participation shifted from passive staking to active operational integration. The scaling of the TON network and the pressure of the Ethereum Classic halving—how they work, what they change, and where the risks lie—is the focus of the analysis below.

Key takeaways

TON block times fell from 2.5 seconds to 400 milliseconds in May 2026.
Toncoin price surged 33.8% to $1.80 following Telegram's validator announcement.
TON transaction fees were reduced 6x to approximately $0.0005 in April 2026.
Ethereum Classic halving cut miner rewards 20% to 2.048 ETC per block.
April 2026 gross staking rewards on TON were 3.5x higher than March totals.
Total TON staked reached 220 million tokens by May 2026.

What is TON network?

TON network defined: A high-throughput Layer 1 blockchain originally designed by Telegram that uses a unique sharding architecture to support millions of transactions per second.

The TON network operates as a decentralized infrastructure layer that integrates directly with the Telegram messaging ecosystem to provide seamless crypto payments and decentralized applications. By utilizing a proof-of-stake consensus mechanism and the Catchain 2.0 protocol, the network achieves near-instant finality, which is essential for consumer-facing apps. In May 2026, the network evolved into a more centralized operational model where Telegram acts as a primary validator to ensure stability and distribution.

You can buy TON tokens on KuCoin to participate in the growing ecosystem of decentralized bots and mini-apps. Think of the network as a digital highway system: while traditional blockchains like Bitcoin are like narrow country roads with high tolls (fees), TON is designed as a multi-lane superhighway where tolls are negligible, allowing for millions of "micro-cars" to move simultaneously without congestion. This efficiency is driven by a validator set that now includes institutional-grade participation from Nasdaq-listed firms and major technology platforms.

History and market evolution

The development of the TON and ETC ecosystems has been defined by radical shifts in protocol economics and stakeholder roles. These milestones have directly influenced how users pay for transactions and how miners or validators earn revenue.

May 2024: Ethereum Classic completed its third halving at block 20,000,001, reducing the block reward from 2.56 ETC to 2.048 ETC.
April 2026: Pavel Durov announced a massive fee reduction on TON, fixing costs at approximately $0.0005 to encourage high-volume app usage.
May 4, 2026: Telegram officially entered the validation space, sparking a 36.4% price jump in Toncoin within 24 hours as market confidence surged.

► TON transaction throughput increase: 10x — TON Strategy, May 2026 ► TON transaction finality: ~1 second — GlobeNewswire, May 2026

Current analysis

Technical analysis

Network performance metrics on TON indicate that the Catchain 2.0 upgrade has successfully stabilized the chain during high-traffic events, providing a strong foundation for price discovery. On KuCoin's TON/USDT chart, the recent rally to $1.80 created a new technical floor, supported by a massive increase in staking participation and institutional treasury interest. Based on KuCoin's trading data, the current technical setup shows increased liquidity as Telegram's validator role reduces the circulating supply of liquid tokens. You can monitor live TON prices on KuCoin to track how these infrastructure milestones impact daily volatility and volume.

Macro and fundamental drivers

The primary fundamental driver for TON is the direct integration with Telegram’s user base, which creates a captive market for the network's newly lowered fees. Conversely, the macro driver for Ethereum Classic is the halving mechanism, which forces a re-evaluation of miner profitability.

► Total TON staked: 220 million — TON Strategy, May 2026 ► April 2026 staking reward growth: 3.5x — StockTitan, May 2026

Fundamental analysis suggests that while Ethereum Classic miners face reward cuts, TON validators are seeing increased gross rewards due to the sheer volume of network activity. This creates a divergence where proof-of-work miners must rely on price appreciation to survive, while proof-of-stake validators on TON benefit from the scaling of the machine economy.

Comparison

Participants must weigh the scarcity-driven economics of Ethereum Classic against the utility-driven scaling of the TON network. Ethereum Classic relies on a fixed-supply schedule that rewards long-term holders through halving events, whereas TON focuses on low-friction usage and high-speed execution to drive value through ecosystem growth. While ETC mining requires significant hardware investment and electricity costs, participating in the TON ecosystem as a staker or validator provides a more energy-efficient way to earn rewards from network fees.

Participants who prioritize fixed-supply monetary policy and proof-of-work security may find Ethereum Classic more suitable; those focused on high-speed decentralized applications and social media integration may prefer the TON network. KuCoin's research on blockchain scaling provides deeper insights into how these different economic models perform during periods of high network load.

Create your free KuCoin account today to access over 700+ global crypto assets and the latest gems. Sign Up Now!

Future outlook

Bull case

By Q3 2026, if TON’s 6x fee reduction leads to the launch of a "killer app" within Telegram, the network could see its daily active users surpass major Layer 2 competitors. In this scenario, the increased demand for Toncoin to pay for even these tiny fees would drive significant buy-pressure, potentially pushing the asset toward new all-time highs as Telegram's validator role locks up more supply.

Bear case

By October 2026, the Ethereum Classic halving may have forced a significant portion of the hashrate to migrate to other chains if the ETC price does not offset the 20% reward cut. For TON, the risk lies in the modest reduction of validator fee-based income; if transaction volume does not grow enough to compensate for the lower per-transaction cost, validator participation could stagnate, leading to a more centralized and less secure network.

Conclusion

The divergence between the TON network and Ethereum Classic highlights two distinct paths for blockchain survival: scaling through utility and scaling through scarcity. While Ethereum Classic miners adjust to the reality of the 2.048 ETC block reward, TON is aggressively positioning itself as the most accessible blockchain for the masses through Telegram’s validator support and sub-cent fees. The success of these protocol changes will ultimately be measured by their ability to maintain network security while providing sustainable incentives for those who secure the chain. To stay informed on these shifting network economics, refer to KuCoin's latest platform announcements.

FAQ

How does a crypto halving affect miners on the Ethereum Classic network?

A crypto halving reduces the block rewards given to miners, which directly impacts their revenue and profit margins. Following the May 2024 halving, ETC rewards fell by 20%, which can force miners with high electricity costs or inefficient hardware to shut down unless the market price of ETC rises to compensate for the lower issuance.

Why did the TON network reduce its transaction fees?

The TON network reduced fees by approximately 6x in April 2026 to encourage mass adoption and make the blockchain more suitable for microtransactions and high-frequency applications. By fixing the transaction fee at roughly $0.0005, the protocol aims to compete with traditional payment processors and other low-cost Layer 1 blockchains.

What is the significance of Telegram becoming a TON validator?

Telegram becoming the largest validator on the TON network provides a massive boost to the network's credibility and operational stability. This move directly aligns the interests of the messaging platform with the blockchain's success, ensuring that the network has the institutional-grade hardware and distribution needed to support its 900 million users.

How much was the Ethereum Classic block reward reduced during the last halving?

During the halving at block 20,000,001 in May 2024, the Ethereum Classic block reward was reduced from 2.56 ETC to 2.048 ETC. This 20% reduction is part of the "5M" policy, where rewards are cut every 5 million blocks to maintain the asset's long-term scarcity.

How did the Catchain 2.0 upgrade improve the TON network?

The Catchain 2.0 upgrade deployed in April 2026 significantly improved network speed by cutting block times from 2.5 seconds to just 400 milliseconds. Additionally, transaction finality was improved from 10 seconds to approximately 1 second, and the overall throughput of the network increased by an estimated 10x.