Over the past few months, the Total Value Locked (TVL) on the Tongcoin [TON] network has experienced a downward trend. However, there has been a noticeable increase in staking involvement, signaling a change in investor behavior.
Exploring the Decline
An analysis by CryptoCrypto of TON’s TVL from mid-2024 to early 2025 revealed a significant decrease. This decline could indicate a slowdown in network usage or a withdrawal from decentralized finance (DeFi) platforms.
Despite this, Liquid Staking continues to be a significant portion of the TVL. It suggests that although the overall locked value has fallen, staking remains an attractive investment option.
This shift from high-risk DeFi ventures might lower the typical volatility associated with DeFi exposure.
If the trend of declining TVL continues, TON’s price could stabilize as more funds get tied up in less volatile staking endeavors.
Rise in Secure Yield Preference
Further examination showed a rise in the Staking TVL Ratio, despite the overall drop in TVL. This ratio, indicating the proportion of TVL in Liquid Staking and Staking Pools, has surged to new levels.
The increasing inclination towards staking suggests that investors are prioritizing earning rewards over engaging in riskier DeFi tactics.
This shift could lead to greater price stability for TON, with the influx of locked tokens alleviating selling pressure.
The escalating staking ratio implies that price fluctuations might become more controlled, potentially paving the way for price appreciation as staking rewards accumulate.
Speculation or Consolidation?
Furthermore, an analysis of Netflows uncovered a significant spike in combined exchange inflows around mid-February 2025, coinciding with a price peak.
Following this surge, Netflows stabilized, suggesting that the initial surge likely stemmed from market speculation or a specific event.
The subsequent stabilization hints that the market may have absorbed the impact, signaling a phase of consolidation for TON’s price.
After speculative surges, TON’s price might enter a consolidation period, laying the groundwork for potential growth as market sentiment stabilizes.
Impact of Increased Engagement
An assessment of active addresses indicates consistent growth, especially among addresses with a balance, from late 2024 to 2025.
This uptick in activity aligns with the surge in staking engagement, suggesting that both new and existing users are more involved in the staking ecosystem.
A rise in active addresses typically reflects a healthier network, potentially leading to heightened demand for TON and supporting price escalation.
The expansion of active addresses, particularly those with balances, paints a positive picture for TON, indicating a bullish trend as network participation broadens.
Despite the recent TVL drop, the increasing staking participation and growth in active addresses hint at a shift towards stability and expansion for TON.
These patterns hint at TON transitioning into a phase where staking-induced stability could underpin long-term value appreciation.