TON Resumes Block Production After Nearly Six-Hour Interruption

SUMMARY

The TON blockchain halted block production Wednesday morning, resuming in the early afternoon after nearly six hours.
The outage may have been triggered by the launch of a new meme coin called DOGS, potentially causing the network crash.

Toncoin (TON), the native token of the TON blockchain, continued block production after about six-hour blackout caused by a surge in network activity. This disturbance, which started on Wednesday morning, raised concerns over network stability, as an extended period without block generation can lead to security risks and transaction delays. The blackout was likely triggered by the recent airdrop of the Dogs memecoin, which altogether increased network activity. As the notoriety of Dogs soared, the surge in transactions overpowered the TON blockchain, with its transactions per second (TPS) falling short of expectations.

Bybit, a leading cryptocurrency exchange, briefly suspended TON withdrawals and deposits due to the network’s instability. Before the blackout, TON had been performing well, opposing broader market trends as other major cryptocurrencies experienced critical declines. Despite the blockchain’s freeze, TON managed to recuperate some of its losses amid the East Asia trading day, with its price down by less than 1%, according to CoinDesk Indices data. In contrast, the CoinDesk 20 (CD20) index, which tracks the largest and most liquid digital resources, dropped over 6.5%, driven by a bitcoin-led market slide that resulted in over $300 million in crypto futures liquidations—the most noteworthy since early August.

Bitcoin’s price fell by 6%, with Ethereum, Solana, Cardano, and Dogecoin too encountering declines of over 5%. XRP showed relative strength with a 3.4% decrease, while Tron’s TRX was the best performer among major cryptocurrencies, with only a 2% drop. Ether futures saw the most elevated liquidations at $102 million, taken after by Bitcoin at $96 million, as a wave of sudden liquidations likely contributed to a long squeeze, worsening the market’s losses. A long squeeze happens when traders betting on higher prices are constrained to sell into a falling market to cut their losses, making a downward cycle.

This market volatility was moreover reflected in the open interest on Bitcoin futures, which fell to $31 billion from $34 billion earlier in the week, signaling disappearing sentiment among traders. In the meantime, U.S.-listed Bitcoin exchange-traded funds (ETFs) experienced over $127 million in net outflows, breaking an eight-day streak of inflows. Ether ETFs saw continued outflows for the ninth successive day, with over $3.45 million leaving the products. The negative force in the market was exacerbated by traders looking for downside protection through short-dated volatility bids and the lack of on-chain catalysts in the near term.

AI-related tokens were not saved from the downturn, with Near, ICP, FET, Bittensor’s TAO, and RENDER (RNDR) all encountering noteworthy decreases. Despite Nvidia’s upcoming earnings report, which had at first driven a few interests in AI tokens, sentiment around AI has shifted, with investors bracing for increased volatility.

In the middle of this market turbulence, Hong Kong-based custodian Hex Trust released a staking partner program, signaling progressing regulation interest in the digital resource space. As TON recoups from its blackout, the broader crypto market remains in a state of flux, with traders closely observing for signs of a potential September correction. The market’s following moves will likely be influenced by key developments such as Nvidia’s earnings and the performance of mega-cap stocks, as investors navigate a progressively volatile landscape.