What is TRON (TRX)? How does the Tron cryptocurrency work?

Main

• TRON (TRX) is a native cryptocurrency of the blockchain platform of the same name, on the basis of which decentralized applications operate. The TRON coin is in the TOP-20 crypto assets by market capitalization.
• TRON appeared in 2017 in China and was positioned as an “Ethereum killer”. The project claims simplified development of decentralized applications and support for smart contracts of other blockchains.
• Despite the long development, the TRON ecosystem remains limited, although it includes several large projects, including in the field of decentralized finance (DeFi).

Who and when created TRON

The TRON blockchain platform was developed under the leadership of a young Chinese entrepreneur, Justin Sun. Previously, he was Ripple’s representative in China and launched the popular Peiwo voice streaming mobile app.

In July 2017, Sun registered the non-profit TRON Foundation in Singapore. A few months later, he founded a company in San Francisco (USA).

In August 2017, TRON held an ICO, as a result of which its team raised about $70 million. The project was positioned as a competitor to Ethereum and EOS. In the spring of 2018, the TRON testnet was launched, and the mainnet was launched on May 31, 2018.

The aggressive marketing and eccentric statements of Justin Sun on social networks, which significantly influenced the market quotes of the native TRON coin, have been repeatedly criticized by the crypto community.

The TRON project was reproached for high centralization and copying competitors. The researchers found that the whitepaper of the project released for the ICO contains a significant amount of plagiarism from materials from other blockchain projects, including Ethereum.

Justin Sun announced his retirement from Tron at the end of 2021, stating that he is stepping back from active management. In January 2022, the TRON Governance Reform was completed, transferring project management from the TRON Foundation to a decentralized organization Tron DAO.

How TRON Works

There are three levels in the TRON blockchain architecture:

• core — modules for consensus, smart contracts, TRON virtual machine (TVM) and account management;
• level applications – used by developers to create decentralized applications;
• atstorage level – designed to store network blocks, segmentation of blockchain data and data on its state.

The TRON blockchain uses the Delegated Proof-of-Stake (DPoS) consensus algorithm, which was first used by its competitor, the EOS project. Blocks are generated every 3 seconds and the maximum network throughput is 2000 transactions per second.

Behind verification of transactions and the creation of new blocks are answered by 27 so-called super representatives (super representatives) – in fact, validators, who are selected from several hundred node operators. The super representative who generated the next block and processed the transactions receives 32 TRX. He can use all or part of the rewards to buy votes in order to maintain control over the network.

Users who participate in TRX staking by delegating their coins to super representatives can earn returns of around 4% (data Staking Rewards at the end of August 2022).

There are three types of nodes in the TRON blockchain:

• supernodeswho are candidates for superrepresentatives;
• full nodeswhich broadcast transactions and synchronize with the blockchain;
• solidity nodesthat synchronize blocks from full nodes and provide an API for third-party applications to access the blockchain.

What is TRON (TRX) cryptocurrency for?

The native cryptocurrency of the blockchain is the TRON (TRX) coin. For the ICO in 2017, following the usual practice for that time, they released the ERC-20 standard token of the same name in the Ethereum network. The emission of 100 billion TRX was distributed as follows:

• 40% for public token sale;
• 15% for closed presale;
• 35% to the reserve fund of the project.

Later, all ERC-20 tokens were converted into TRX coins, already issued on the TRON blockchain.

TRX is the main unit of account in the TRON blockchain. It pays transaction fees, as well as rewards for staking and block confirmation by Super Representative nodes.

When TRX is locked, users receive Tron Power (TP) tokens, which allow them to vote for super representatives and network development proposals in the decentralized governing organization Tron DAO.

The TRX cryptocurrency can be used as a means of payment for settlements and purchases, including in many online services and using prepaid plastic cards. You can store a coin not only in the official wallet Tron Linkbut also in most popular crypto wallets, including Trust Wallet, Exodus, Coinbase Wallet, Trustee Wallet, etc.

By the launch of the TRON mainnet, the price of TRX soared above 22 cents, but then consistently fell to about 1 cent. Again, the cost of the TRON cryptocurrency began to grow in 2020 and reached 16 cents by the spring of 2021. During 2022, the price of TRX fluctuates around 6-8 cents per coin.

History of TRON development

Back in 2017, the TRON team adopted a roadmap for the development of the project for the next 10 years. It consisted of six eras:

• Exodus (2017-2018). Conducting a token sale, developing a blockchain and creating a distributed file exchange system.
• Odyssey (2019-20). Mainnet launch and implementation of incentives to reward content creators.
• Great Voyage (2020-21). Opening opportunities for holding an ICO on the Tron blockchain.
• Apollo (2021-23). Enabling content producers to issue their own TRC-20 tokens.
• Star Trek (2023-25). Creation of a decentralized platform for games and prediction.
• Eternity (2025-27). Monetization based on community growth.

In general terms, this roadmap remains relevant to this day.

In the winter of 2019, in order to integrate with BitTorrent, Justin Sun acquired the decentralized streaming platform DLive, which was then transferred to the TRON and BTFS blockchain.

In August 2021, the TRON Foundation launched the $300 million TRON Arcade fund, which will invest in GameFi blockchain projects and Play2Earn games over the next three years.

In the fall of 2021, the Tron Foundation together with APENFT launched a $100 million fund focused on NFT projects. It offers artists support and guidance, as well as advice on copyright protection and other legal issues.

How TRON Gained Popularity With USDT

One of the biggest successes of the TRON network was the release in April 2019 of the popular stablecoin USDT, which then only traded on the Ethereum and Omni networks.

Extremely low transfer fees have made TRON-based USDT a very popular tool for moving value between centralized exchanges and private crypto wallets. The average cost of a USDT TRC-20 transfer is less than $1, while a stablecoin transaction on the Ethereum network can cost more than $15-30.

By April 2022, the capitalization of USDT-TRON exceeded $41 billion, which amounted to almost 50% of the total emission of this stablecoin on all blockchains. Largely due to the popularity of USDT, by September 2022, the total number of TRON accounts exceeded the 109 million mark.

What projects are included in the TRON ecosystem

Compared to competing blockchain platforms, TRON has a rather meager list of DeFi applications deployed on this network. According to the Defillama service, only 10 protocols work in this network.

Moreover, the TRON ecosystem is largely centralized, since most of the tools and services are developed under the guidance and control of the TRON Foundation.

Some of the largest DeFi services include:

• landing protocol JustLend;
• decentralized exchange SunSwap;
• USDJ stablecoin.

Together, these three protocols account for over 90% of the total liquidity locked in TRON.

Despite the small number of applications, TRON steadily enters in the top five networks in terms of blocked liquidity.

How reliable is the algorithmic stablecoin USDD

In May 2022, the algorithmic stablecoin USDD, announced by Justin Sun, was released, pegged to the US dollar. The emission of the asset began simultaneously in the TRON, Ethereum and BNB Chain blockchains.