TRON

TRON (TRX) is a decentralized, blockchain-based operating system that the Tron Foundation launched in 2017. While TRX tokens began as ERC-20 assets on Ethereum, they migrated to their own independent network one year later.

The project was initially established to grant full ownership rights to digital content creators. Its primary objective is to support creators, who typically earn only a small fraction of revenue, by offering greater rewards for their work. This is achieved by enabling content consumers to compensate makers directly, bypassing intermediaries such as YouTube, Facebook, or Apple.

The TRON software facilitates smart contracts, diverse blockchain systems, and decentralized applications (dApps). The platform employs a transaction model comparable to Bitcoin (BTC), specifically using UTXO. All transactions occur on a public ledger, allowing users to monitor the history of operations.

Consequently, the platform was designed to build a decentralized Internet and functions as a tool for developers to build dApps, serving as an alternative to Ethereum. Any individual can develop dApps on the TRON network and provide content, receiving digital assets in return for their efforts. A clear benefit of TRON is the capacity to create and share content openly without concern for transaction fees.

Justin Sun established TRON and currently holds the position of CEO. He completed his studies at Peking University and the University of Pennsylvania, earning a spot on the Forbes Asia 30 Under 30 list for entrepreneurs. Born in 1990, Sun previously worked with Ripple, where he acted as the chief representative for the Greater China region.

TRON distinguishes itself by creating a space where content producers can engage directly with their followers. The project aims to remove centralized intermediaries, such as app stores, music platforms, and streaming services, so that creators retain more of their earnings rather than losing commissions to middlemen. This approach may also lower costs for consumers. As the entertainment industry becomes more digital, TRON appears to have an early advantage in bringing blockchain technology to this sector.

The team states that it employs a skilled and experienced group of developers located globally, many of whom were recruited from major firms like Ripple Labs.

Finally, while other blockchain initiatives may keep their development plans unclear, TRON sets itself apart by providing a roadmap that outlines its goals for the upcoming years.

TRON’s total token supply sits just above 100 billion, with approximately 71.6 billion currently in circulation. During the 2017 token sale, allocations included 15.75 billion TRX for private investors and 40 billion for initial coin offering participants. The Tron Foundation received 34 billion, while a firm owned by Justin Sun was granted 10 billion. Consequently, 45% of the TRX supply went to the founder and the project, leaving 55% for investors. Critics contend that this distribution ratio is significantly higher than those observed in other cryptocurrency initiatives.

The TRON network relies on a delegated proof-of-stake consensus model. Holders of TRX can lock up their tokens to acquire Tron Power, which grants them the ability to cast votes for “super representatives” acting as block producers. In return for validating transactions, these producers earn TRX rewards that are shared with their voters. The TRON team states that this structure allows the blockchain to attain greater throughput.

You can purchase Tron on dozens of exchanges where it is listed, such as Binance, Bitfinex, KuCoin, Poloniex, Bancor, and Coinbene, among others. However, Coinbase does not support TRX.

Data on the TRON network is free from central authority and hosts content without charge. Creators are rewarded with TRX tokens for their intellectual work;

Content makers can create their own coins to use within applications they develop;

The network also supports decentralized games, allowing players to reward creators directly with digital assets.

The ecosystem relies on a three-level architecture to ensure smooth and powerful operation:

• Storage Layer, which securely stores blockchain state, history, and network data, serving to segment various types of ecosystem data;
• Application Layer, where developers play a key role, utilizing TRX to build applications and create wallets;
• Core Layer, which processes instructions written only in Java or Solidity. This layer computes and processes instructions before sending them to the Tron Virtual Machine for logic execution and dApp operation.

A delegated Proof-of-Stake (dPoS) system serves as the main protection tool and a special feature, offering an alternative to Proof-of-Work and Proof-of-Stake algorithms. This provides a competitive advantage by making the network more energy-efficient. Additionally, its layered architecture allows TRON to process more simultaneous transactions than Proof-of-Work (PoW) systems. The development team states that TRON has higher throughput, capable of processing up to 2000 operations per second without fees, meaning network transactions are feeless.

TRON is a blockchain-based operating system aiming to make the technology suitable for daily use. While Bitcoin handles up to six transactions per second and Ethereum up to 25, TRON claims a capacity of 2,000 TPS.

The project is best described as a decentralized platform focused on entertainment and content sharing. To support this, one of its major acquisitions was the file-sharing service BitTorrent in 2018.

TRON has divided its goals into six phases, which include providing simple distributed file sharing, using financial rewards to drive content creation, enabling creators to launch personal tokens, and decentralizing the gaming industry.

TRON is also one of the most popular blockchains for building DApps.

In April 2022, Tron CEO Justin Sun announced plans to launch an algorithmic stablecoin called Decentralized USD or USDD. It uses an automated balancing technique that burns $1 worth of TRX to mint 1 USDD. The Tron DAO Reserve manages USDD, ensuring its value remains stable relative to its underlying collateral, and sets the APY for users staking USDD. At the time of writing, users earn a 30% yield on staked USDD.

Although USDD has faced criticism for borrowing heavily from the design of UST—Terra’s algorithmic stablecoin that triggered a bank run and crash of the Terra ecosystem—it has distinguishing elements. Notably, it uses a guaranteed over-collateralized framework, unlike the undercollateralized model of UST. Collateral cryptocurrencies in the USDD protocol include Tether, USDC, Bitcoin, and Tron.

The minimum collateral ratio for USDD is set at 130%. Therefore, the value of collateral in the protocol's reserves is practically higher than the circulating value of USDD. This makes a sustained depeg of USDD appear unlikely. Despite the 130% minimum, USDD is currently backed by collateral reserves worth over thrice the value of USDD in circulation. The Tron DAO Reserve aims to build a $10 billion treasury to back USDD's value.

Another key element for USDD stability is the operation of Super Representatives, Tron's institutional partners. These incentivized entities influence trade sides to absorb potential USDD price volatility. For example, if USDD drops below $1, Super Representatives burn part of their USDD holdings to mint TRX, which helps return USDD to its target price.

However, these mechanisms have not prevented USDD from experiencing volatility. In June 2022, its price fell 9% relative to 1 USD. In response, the Tron DAO Reserve injected $650 million worth of USDC into the USDD collateral reserve.