Author: Revc, Jinse Finance
Preface
TRX has started a recovery cycle since 2023, and has recently broken new highs. Tron is also regarded as the cash flow cow chain in the crypto industry, and its position in the stablecoin channel between CEX markets is solid. Due to the low complexity of Tron governance and technology, Tether chose it as the first stablecoin. The issuance of TRC20-USDT exceeded 60 billion in July this year, and nearly 13 billion were added in 2024. The explosive growth reflects the strong market demand for TRC20-USDT.
Tron Network Revenue and Fee Mechanism
The good performance of TRX price is closely related to its gas fee and price transmission mechanism. The market often reports that the monthly income of Tron network reaches tens of millions or even hundreds of millions of US dollars, and the public envies its ability to generate revenue.
Source: Tokenterminal
But in fact, the income of the Tron network is transmitted to the currency price performance in a very simple and highly recognized way , and the income does not go directly into Justin Sun’s pocket.
Tron uses a resource model to execute on-chain transactions, and stakers receive resources such as bandwidth and energy. As long as there are enough resources, tokens can be transferred and smart contracts can be executed for free. If the resource limit is exceeded, TRX will be used to pay transaction fees, and the paid TRX will be destroyed. Therefore, Tron's income comes from the destruction of TRX in transaction fees. Recently, some people in the crypto community have also inquired about obtaining more Tron network energy , which indirectly reflects that the Tron network has attracted new attention .
At the same time, stakers and block producers will receive newly minted TRX as rewards, about 5.07 million TRX per day. As long as the TRX destroyed per day exceeds 5.07 million, the circulating supply of TRX will decrease. According to Tron official data, TRX has been in a deflationary state for more than two years .
Since the issuance volume has been lower than the destruction volume for a long time, the Tron network has good income fundamentals. Under this fee mechanism, TRX holders can enjoy the dividends of the development of the Tron network.
Current Status of Tron Ecosystem Development
Tron's current revenue depends on the USDT transfer business. In contrast, DeFi, games, RWA, etc. have developed slowly. Recently, the meme sector has led Tron's on-chain transaction fees to a new high. The official immediately adjusted and optimized the transaction fee mechanism.
Since Tron missed the DeFi Summer explosion period, the objective conditions and environment to make up for it are not yet available. The development of public chains needs to step on many hot spots in each cycle , such as DeFi and NFT for Ethereum , and stablecoins for Tron. In the future , Tron may also usher in a track that adapts to its own characteristics , leading Tron to a second explosion .
The author believes that Tron can try the RWA track, although he is not optimistic about the explosive potential of the RWA track. The main reason is that the on-chain links of RWA assets in legal and attribute verification are too complicated. However, Tron may be more suitable for the RWA track. The largest asset on Tron, USDT, is actually the largest RWA asset. Tether issues on-chain stablecoins by reserving U.S. Treasury bonds.
RWA is currently dominated by low-alpha assets, and the basic annualized yield is benchmarked against the yield of US bonds. In the bull market cycle, the return expectations of the crypto market are tens or even hundreds of times, so Tron's direction for RWA is to attract high-alpha assets in the real world, at least assets with yields several times that of US bonds. Most high-alpha assets are securities to be listed, but the SEC's supervision has also blocked this path, so the goal of RWA tokenization can be productive assets rather than stock assets. At the same time, there needs to be reliable and simplified legal procedures and potential returns, and there must be a certain market size. It is hoped that Tron can connect a wider range of capital markets and users through the RWA track.
SunPump
SunPump has issued 76,785 meme coins so far and earned more than 30.81 million TRX, equivalent to nearly 4.63 million US dollars. Its daily trading volume and peak revenue once surpassed Pumpfun.
However, SunPump's trading volume has begun to decline recently, which may be due to the lack of temporary hot spots, or it may be that due to the gap in consumption power between the East and the West, Eastern users are more sensitive to PVP friction costs and are prone to transaction fatigue. In addition, due to the relative limitations of culture and social media platforms in Eastern communities, the MEME atmosphere is not easy to form and spread widely. However, the MEME sector is still worthy of attention and development, and Justin Sun also has a wide influence in Europe and the United States.
Discussion on the Possibility of Tron's Future Development
Although homogeneous competition in the industry cannot challenge its leading position in the stablecoin track for the time being, without rich scenarios to retain funds and only serving as a channel, the ecosystem will either advance or retreat. Currently, Tron can explore at several levels:
1. Expand the number of super representatives to allow developers to form a higher degree of decentralized perception of Tron at the governance level . The first principle of the public chain is decentralization. The protocols and users on Ethereum bear huge interaction costs and are willing to pay for decentralized design, because without decentralization there is no political correctness. Ethereum ecological projects have a strong advantage of political correctness. Solving the problems of Ethereum is to solve the problems of decentralization. Although some protocol projects are far from the real needs of customers, most of them cater to the infrastructure imagined by VCs, as long as VCs and exchanges are convinced and TVL and leek resources are obtained, the project will be successful. Therefore, if the underlying technical design and governance of a public chain are not decentralized enough, it will be difficult to build an ecosystem and project.
Although there are currently 417 super representatives on the Tron network, which is a medium governance level among public chains, the governance model can be transformed into a more proactive one, making Tron governance and operations more transparent.
2. Optimize the TRX distribution mechanism , strengthen the perception of incentives for application layer construction , quantify the contributions of application layer developers , and developers who bring users and funds to Tron can obtain a share of rewards , further combining with a wider developer and hackathon community to bring vitality to the Tron network .
Fud and potential risks
Justin Sun Sun is a very distinctive founder of a crypto project, with extensive exposure and influence on social media, the international political stage, and the financial market. It is difficult to objectively verify whether the user Fud and the projects related to him are intentional harvests, or whether the uncontrolled Fomo sentiment leads to violent market fluctuations and then out of control, because it is difficult to authenticate the subjective behavior of users in the transaction process, which makes it difficult to trace back and divide responsibilities. However, we also hope that Justin Sun can further respond to the concerns of the market and users and more actively fulfill the platform's responsibilities.
The regulatory risks faced by Tron mainly come from the SEC's prosecution, accusing it of offering and selling securities without registration. As the tug-of-war with regulators continues, there is hope that it will eventually be settled in the form of a fine.
Why can’t Chinese people create a decentralized public chain with an active ecosystem?
Chinese people are good at running centralized exchanges . The Chinese-speaking region is the Internet market with the highest user density and has unique advantages in production, research and operation capabilities . However, the operating concepts of exchanges and public chains are completely different . In the early stages when Web3 has not yet been widely adopted, the users of any Web3 product or public chain are likely to be fellow builders with the same intelligence and ambition. Therefore, products are secondary and distribution is prioritized. Projects with good consensus and distribution mechanisms have higher startup efficiency.
Another point is that a small number of Chinese are used to making plates and grabbing land, using the most brutal and predatory means to obtain the greatest benefits, which is also due to the high degree of involution in the Chinese-speaking area in recent years. Whether it is Web2 or Web3, the decentralized community always appears in a monopolistic and destructive identity such as VC. Take the Chinese-speaking area and the Indian market as an example. Because Chinese companies have been ahead in development for several years, they have launched destructive competition in the Indian market without considering the objective development stage of the Indian market, so they were kicked out by the Indian government. Of course, there is also the influence of conservatives.
If the decentralized concept of Web3 projects is not consistently adhered to, then when they are launched and face the market and users, there will already be a large number of vested interests on the train, and users and leeks are just carrying the sedan chair. The most intuitive comparison is that when Bitcoin began to be widely accepted, 80% of it had not yet been mined, but now Web3 projects have more than 50% of the tokens distributed at the time of TGE. The appearance of greed is shocking.
summary
I hope that Tron and other public chains will be the first stop for Chinese people to enter the crypto world, similar to how Solana is the first stop for North American Web2 developers and capital to enter the crypto world. Chinese people can have a highly decentralized autonomous community, a place where Web3 projects can take root and grow.
By then, Justin Sun will also transform into Sun Wukong. He will not only be a businessman in the traditional sense who adapts to the rules and succeeds, but also a "Fighting Buddha" who is supported by the power of the community, a representative who resists the old Internet forces and capital VCs, and holds the idealism of decentralization.
After all, the wheel of history rolls forward. Any progress in productivity and production relations is overturning the decadent old world and opening up a path for class ascendance. The significance of entrepreneurs may be to make there be fewer Camel Xiangzi and blue and yellow clothes on the streets.
