TRON has earned its respect throughout the years, as it started as a copycat but is now globally used to facilitate crypto transactions. It first started as payment for content creation and distribution on the internet, and quickly grew to become a controversial and well known name in crypto. Let’s explore what TRON is, its currency TRX, and the masterful level of marketing by its founder Justin Sun.
The Tron Network is a decentralized entertainment and content-sharing platform that utilizes blockchain and peer-to-peer (P2P) technology. It offers several compelling features that have attracted crypto interest throughout the years.
As it was established by Justin Sun in 2017, he wanted to reshape the digital content world by providing a decentralized platform where creators can directly share and monetize their content, circumventing traditional intermediaries like YouTube and Amazon.
Set up in Singapore, The TRON Foundation launched a successful $70 million ICO just days before China banned ICOs, and it was just in time before TRON made its strategic shift to its own independent blockchain in June 2018.
The TRON Mainnet launched in May 2018, marking the Odyssey 2.0 release, and in June 2018, TRON declared its independence with the creation of the Genesis block.
H.E. Justin Sun is the name linked to TRON and is one of the sole reasons TRON remains relevant to this day. His reputation has many faces, as he is hated by many and loved by many as well.
At just 27 years old, Sun founded the Peiwo app, which had 10 million users and had been listed in Forbes 30 under 30 for Asia. As a protégé of Jack Ma, founder of Alibaba Group, he was around the right people.
But he did this in every way possible, including the use of controversial tactics for which he is still facing legal challenges, including an SEC lawsuit alleging illegal activities with TRX and BTT tokens.
Key accusations include selling unregistered securities, engaging in over 600,000 wash trades to inflate TRX trading volumes, and paying celebrities for undisclosed promotions, such as the famous dinner with Warren Buffett where he paid him to dine with him.
Currently, Sun still holds several influential roles, including CEO of Rainberry Inc. (formerly BitTorrent) and advising roles in the crypto industry including with the exchange HTX, previously known as Huobi.
He also recently came into the spotlight for buying a $5 million banana and eating it after the purchase – another way to burn his money in real life.
From TRON to Trouble: Justin Sun Saga of Crypto Ambition & Controversy
This review of TRON (TRX) was created for informational purposes. This article is not intended for promotion.
If we take a look at the blockchain on which TRON operates, we see it has many similarities with other decentralized systems.
It also uses its own virtual machine, a place where actions happen – and by actions we mean smart contracts. The Tron Virtual Machine (TVM) is a lightweight, Turing-complete virtual machine that connects existing development environments.
It is designed to offer a customized, stable, and scalable blockchain for TVM-compatible tokens, using the TRC-20 standard, which is fully ERC-20 compliant and implemented via smart contracts. This means it’s compatible with the Ethereum Virtual Machine (EVM), so developers can use familiar languages like Solidity.
At the core of TRON’s architecture is the Core Layer. It handles crucial functions such as transaction validation, account management, and smart contract execution. This layer utilizes the Delegated Proof of Stake (DPoS) consensus mechanism, where TRX token holders vote for “Super Representatives” to manage transaction validation and block creation.
This system enables users to vote with their coins to elect Super Representatives (SRs), who manage the network and validate transactions. New blocks are created every three seconds, rewarding those involved with 32 TRX coins.
TRON features its distributed storage protocol that incorporates a graph database to enhance their real-world data storage applications. The network includes three types of nodes: Witness Nodes (Super Representatives), Full Nodes, and Solidity Nodes, each serving distinct functions in the network’s ecosystem.
A Witness is responsible for block production. A Full Node, aside from its general duties, provides additional APIs and broadcasts transactions and blocks.
A Solidity Node, on the other hand, is specialized for executing smart contracts written in Solidity, offering the computational resources needed for DApps to function effectively, synchronizes irrevocable blocks, and provides inquiry APIs.
TRON has also established several key partnerships which include some major names like Samsung, Swisscom Blockchain, Opera, and Pornhub.
More recently, in September, TRON received regulatory approval to list its Layer-1 token through the VanEck TRX ETN (Exchange Traded Note) on Xetra, a major trading venue under Deutsche Börse, which is a step closer to becoming an ETF.
ETNs, however, are debt securities issued by financial institutions; they do not own any assets but promise to pay the return of a specific index, making their value dependent on the issuer’s creditworthiness.
Another big strategic move was the acquisition of BitTorrent in 2018, which allowed TRON to utilize the peer-to-peer platform’s vast user network and technology for decentralized file-sharing. BitTorrent, a famous downloading platform, is a well-known name for all in the illegal downloading space.
As mentioned above, Tron and its founder left a trail of some allegations of code plagiarism from Ethereum and rumors about Justin Sun cashing out a significant amount of TRX, though these were later debunked.
In January 2018, it was revealed that substantial content within TRON’s English whitepaper had been copied from the whitepapers of Filecoin and the InterPlanetary File System (IPFS), with some sections being nearly identical to the original documents.
The Multi-Billion Dollar Plagiarism Scandal – Plagiarism Today
TRON’s governance has faced significant challenges that center around concerns of centralization, accountability, and regulatory compliance, which pose risks to its integrity and decentralization.
The network’s Delegated Proof of Stake (DPoS) model is often criticized for enabling a small number of Super Representatives (SRs) to have disproportionate control, potentially sidelining the broader community’s interests.
A notable legal challenge includes a lawsuit from the U.S. Securities and Exchange Commission (SEC) in March 2023, accusing them of unregistered securities offerings and market manipulation with TRX and BitTorrent tokens.
While the TRON Foundation has contested the SEC’s claims, arguing that its operations are primarily outside U.S. jurisdiction, we will see how this will evolve over time and what it means for the foundation and its supreme leader.
TRX (Tronix) is central to its ecosystem, serving various functions including governance, paying transaction fees, and engaging with DApps. TRX operates on the TRON blockchain and is available in TRC-10 and TRC-20 token formats.
The total supply of TRX is approximately 100.85 billion, with a dynamic circulating supply that changes based on token release schedules and ecosystem activities.
Additionally, TRX enables content creators to monetize their work directly on TRON-based platforms through donations, subscriptions, and advertising revenue.
TRON’s economic model incorporates a blend of deflationary and inflationary mechanisms that strategically impact its tokenomics. Deflationary elements include token burns, where a portion of TRX tokens is permanently removed from circulation.
The annual inflation rate has notably been negative, around -2.4%, reflecting a trend that aims to stabilize the market and attract long-term investment rather than speculative trading.
1. Delegate to Super Representatives (SRs)
2. Freeze TRX for Bandwidth or Energy
3. Use a Staking Platform like Bit2Me Earn
USDD is TRON’s algorithmic stablecoin, designed to be pegged to the US dollar at a 1:1 ratio. The underlying mechanism of USDD is similar to that of UST-LUNA, in that it uses arbitrage opportunities between TRX and USDD to maintain its peg.
When USDD’s price drops below $1, users can exchange 1 USDD for $1 worth of TRX, and vice versa when USDD’s price exceeds $1.
But remembering how Terra ran into the ground, Justin Sun has taken significant measures by over-collateralizing USDD.
According to the TRON DAO’s website, USDD has a collateralization ratio of 279.79%, including TRX burnt to mint USDD and TRX itself in its reserves. At present, TRON’s DAO reserves are valued at approximately $815.5 million, which includes around 14,040.6 BTC ($423.3 million) and about 1.9 billion TRON.
So unlike other traditional stablecoins backed directly by fiat, USDD is supported by a mix of cryptocurrencies including TRX, BTC, and USDT, which are still volatile or subjected to being depegged themselves.
Based on the pie chart shown, Tron represents 6.81% of the total value locked across all blockchain chains with almost $9.229 billion locked on-chain.
TRON’s protocol excels in on-chain activity, with a significant presence in the stablecoin market of $60.844 billion which is the second largest of them all, following Ethereum.
Leading the DeFi scene on TRON is JustLend with over $6 billion in TVL, making it the primary decentralized lending platform within the network. Other notable platforms include JustStables, which manages about $1.5 billion and focuses on stablecoin issuance, and SUN, an integrated platform for swapping and yield farming with roughly $580 million in TVL.
Tron Surpasses Ethereum with $435M Revenue as TVL Decline
TRON’s architecture and well-known name that offers real-time settlement with near-zero fees, is used as a competitive alternative to traditional cross-border payment systems.
Tron is especially popular in Asia, particularly for transactions involving the USDT (Tether) where both individuals and businesses are looking to execute their dollar crypto settlements.
In emerging markets across Asia, including countries like Vietnam and India, there is a growing trend of using TRON’s stablecoin capabilities for digital payments.
Additionally, the increasingly stringent and uncertain regulatory environment in the U.S. has led many crypto firms to look towards Asia, particularly Hong Kong, as a more favorable setting.
The way Tron has pushed forward is special, and the manner in which it’s becoming a well accepted name and big ecosystem with its own launchpads, memecoins, stablecoins and real world use cases could mean something.
The ecosystem on TRON is vast, with over 160 million accounts and more than 5 billion transactions with many of them ‘real’ – it continues to evolve, with plans underway to support gaming applications and integrating Bitcoin into its ecosystem.
However, TRON still faces challenges including concerns over centralization due to its Delegated Proof of Stake (DPoS) system, which concentrates decision-making among a few large stakeholders and some future lawsuits to consider.
The TRON ecosystem represents one of crypto’s most intriguing paradoxes. While plagued by controversy and centralization concerns, its success in facilitating high-volume, low-cost transactions and capturing significant stablecoin market share demonstrates its practical utility beyond the headlines.
Justin Sun’s aggressive marketing tactics and legal challenges aside, TRON has evolved from its initial entertainment-focused vision into a serious contender in the blockchain space.
With nearly $9 billion in TVL, widespread adoption in emerging markets, and continued technological development, TRON has proven more resilient and adaptable than many of its critics expected.
Disclaimer: Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.
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