TRON

DIGITAL ASSET REPORT:

TRX Review and Investment Grade

Crypto Briefing Research Department

April 6, 2020
Grade-B-minus

Quick Facts

Ticker:TRX
Current Price:$0.013413
Market Capitalization:$894,428,342
Buy Up To Price:$0.026200
Funding Information
Private Sale Date:Jan 8, 2017
Private Sale Price:~$0.0003
Private Sale Allocation:$30,000,000
Public Sale Date:Aug 30, 2017
Public Sale Price:~$0.0015
Public Sale Allocation:$150,000,000
Circulating Supply:66,682,072,191 TRX
Total Supply:99,281,283,754 TRX
Top 10 Addresses Combined Stake:8.51%
ATH Price:$0.300363 (Jan 05, 2018)
30-Day Average Price:$0.012150
24H Volume:$994,121,199
30-Day Average Volume:$1,148,997,031

Contents

Fundamental Factors

Market Opportunity 80;
Ecosystem Development 83;
Token Economics 80;
Token Performance 65;
Core Team 75;
Underlying Technology 70;
Roadmap 60;

Combined Score: 7.37

Introduction

TRON was founded in 2017 by Chinese entrepreneur Justin Sun. The project raised $180M to build an “advanced decentralized blockchain platform” shortly before ICOs were completely banned in China.

Since the launch, TRON has, however, been surrounded by controversy and criticism. The project’s whitepaper has been widely accused of plagiarism. Many of its parts were copied from the whitepapers of other projects (Filecoin and Interplanetary File System) without citation. The project also violated the GNU Lesser General Public License by copying the code from EthereumJ (one of the first Ethereum libraries), without the appropriate reference. 

TRON’s founder, Justin Sun, has probably become the most controversial figure in the blockchain space. Some have named him “a perpetual marketing machine," and  excessive hype and PR has earned Sun an army of haters across the crypto space. Sun even apologized for his excessive marketing antics in a letter to Chinese authorities.

Nevertheless, TRX, TRON’s native token, currently ranks 15th among the top cryptocurrency projects in the world, with a market cap of over $900M

Furthermore, over the last year the project has significantly grown its mainnet to over 3.2M new accounts  with nearly 1M active dApp users.

Technologically, the project has already proven itself to not be just hype. TRON has built a delegated proof of stake network on top of the TRON virtual machine (TVM), which is analogous to Ethereum. In 2019, Tron was second by the number of dApps built on the platform (411 dApps), while Ethereum is still ahead (with 690 dApps). 

The TRON ecosystem has been growing on the back of strategic acquisitions. Over the course of the last 2 years, the project has acquired the file-sharing service BitTorrent (with more than 100 million active users), the crypto exchange Poloniex, the content sharing platform Steemit, and several other projects. Given that the majority of the projects in the space are struggling with adoption and user acquisition, TRON’s strategy “to buy its way up” seems to be quite successful. 

In fact, it can help the project build significant capitalization and community, even though its founder occasionally puts promotion before development.

Underlying Technology

TRON utilizes a 3-layer architecture, which is divided into a Application Layer, a Storage Layer, and a Core Layer.

  • Application layer — presents an interface that developers can use to build different kinds of applications.
  • Storage Layer   features distributed storage protocol that consists of block and state storage.
  • Core Layer   features smart contracts, account management, and consensus. 

The network utilizes the DPoS consensus mechanism with three types of nodes: Super Representative Witness (SR Full Node), Full Node, and Solidity Node. SR Full Nodes are responsible for block production; Full Nodes provide APIs, and broadcast transactions and blocks; Solidity Nodes synchronize irrevocable blocks and provide inquiry APIs.

Currently, there are 27 SR Full Nodes run by different entities, with Binance being the highest-ranked node on the network. 

Each super representative is required to have a significant amount of TRX staked. Validating nodes that engage in malicious behavior have their funds confiscated, keeping them honest.

Super Representatives play a key role in governing the protocol. However, most of them are controlled by the TRON Foundation, which makes the network centralized. 

In fact, the project has been heavily criticized for its “excessive centralization. However, it is likely that it will retain its current level of centralization, so the Foundation (and Justin Sun) can continue governing its progress.

When looking at the top-20 CMC rankings, TRON’s closest competitors are Ethereum and EOS.

Ethereum is currently the number one blockchain platform. While it is considered to be the most decentralized smart contract platforms, it still has problems, such as low throughput, network congestion, and high transaction costs. 

Developers in need of high throughput (and without concern for decentralization) are choosing TRON over Ethereum. According to TRON, it can consistently handle up to 2,000 transactions per second, while Ethereum can process only 20 transactions per second. 

Moreover, TRON’s transactions are much cheaper than what Ethereum can offer. This might explain the platform's popularity among gambling dApp developers. They need both high throughput and low transaction costs, while decentralization does not play much of a role, outside of minimizing regulatory risk, at least in the current state of the industry. 

If we compare TRON to EOS, both platforms look quite similar. They are more centralized than Ethereum, and both provide high throughput. In fact, EOS can handle up to 4,000 transactions per second.

Moreover, transactions on EOS are entirely free for its dApp users since the cost burden is placed entirely on its dApp developers. 

However, while TRON uses Solidity programming language for its smart contracts, EOS uses C++, an arguably more complex language. In fact, Solidity is very popular, since it is also used by Ethereum. Given the number of Ethereum developers, TRON presents a unique and simplified opportunity for developers to build on its platform.

Although Ethereum is first when looking at transaction count statistics, TRON is already second, with over 1M transactions per day. This shows that, despite all of the criticism, its network is being used and is showing signs of adoption.

Overall, for dApp developers, TRON presents valuable advantages that sometimes outweigh centralization concerns. This helps build adoption and grow the community of developers around the project. 

TRON dApp Activity

TRON has been among the top performing dApp networks in the space, with over 400 dApps launched in 2019. TRON’s dApps have also successfully attracted a large number of active users. Over the last year, there were more than 900K active users on TRON dApps. 

In fact, according to Dapp.com in 2019, “TRON has become the blockchain with the largest amount of daily active users since November.”

The number of TRON mainnet accounts is also growing at an increasing rate. Currently, there are over 5M accounts, with over 8K new accounts added on a daily rate. 

Gambling dApps are dominating the TRON ecosystem and the project continues to build on its reputation as “Las Vegas on the blockchain." Over 75% of active users and volume have come from two categories: casinos and “high risk” gambling games. Around $4M worth of TRX cryptocurrency is spent daily in TRON gambling dapps. 

Although some people might be skeptical of the future of the gambling sector on the blockchain, it does present an opportunity for growth across the world.

According to EOS CTO Ben Sigman:

“People whose businesses and services are limited by governments are going to seek new areas to expand to where those limitations and laws aren’t present yet. That’s why gambling was a big part of the early internet too.”

Gambling offers an ideal opportunity for TRON to build its community and popularize the platform across gamblers and gamers across the globe.

Ecosystem Development

In order to grow its ecosystem, TRON’s founder, Justin Sun, has heavily relied on high profile acquisitions.

Since the launch of the platform, the project has acquired the following: 

  1. The file sharing service BitTorrent was acquired by Justin Sun in June 2018. The project was sold for $140M in cash and had around 170M users.
  2. In March 2019, TRON acquired the blockchain app store CoinPlay. 
  3. Justin Sun was part of the investor group that acquired Poloniex in November 2019. 
  4. In December 2019, Tron acquired the streaming service DLive, which at the time of acquisition had 3.5M monthly visits.  
  5. In February 2020, Tron announced the acquisition of Steemit. 

While organic growth could take a long time, it might be easier to integrate TRON into existing ecosystems that have a large and established user base. 

For example, with the acquisition of BitTorrent, the project has issued BTT tokens on the TRON blockchain. Recently, Sun announced that its DAU (daily active users) increased by 30% adding 6M DAU (with a total of around 30M DAU in April). The project is also planning to launch BTT staking in April of this year. 

Since investing in Poloniex, the exchange acquired the largest TRON Dex, which could potentially bring more users to decentralized trading of TRON assets. 

The acquisition of Steemit, however, was less successful. The Steemit community was entirely against the move, given that Steem is a decentralized blockchain and no single entity should have control over the network. 

This resulted in the split of the Steemit network and, currently, it remains unknown how successful the integration of Steemit and Steem will be for the Tron ecosystem.

Nevertheless, the acquisition strategy that Sun is using could be beneficial for the project in the long term. Not all of the deals might play out as was originally expected. But the project has a good chance to build a healthy ecosystem on top of its already established base rather than try to build everything from ground zero (especially given the overall low adoption rates across the industry). 

In addition to these acquisitions, TRON has also been very active in building new products and establishing new partnerships. Last year, Tether issued its stablecoin USDT on the TRON blockchain. Around 762M USDT tokens are currently in circulation on the TRON blockchain, which is around 12% of all Tether tokens in circulation. 

Another notable partnership during the last year was the partnership with Samsung. The technology conglomerate announced that it will integrate the support of TRON to its dApp store, Blockchain Keystore.

Recently, the project also announced the launch of a MakerDao competitor, Djed. It will include a new TRX-backed, USD-pegged stablecoin, USDJ.

Overall, TRON is among the few projects in the space that are heavily investing in ecosystem development. Given that the project continues on its current development path, its investments and ecosystem expansion should positively impact its long term sustainability.

Conclusion

Although TRON has been one of the most controversial projects in the space since its launch, the project has been heavily building its ecosystem. This is likely to continue.

Investments and partnerships that the project has established will likely take time to materialize, but there is a strong possibility that at least some of them will greatly benefit the project in the long run.

Given the fact that TRON continues to increase its adoption and continues to attract new users to the platform, it has a good chance to excel going forward. Therefore, it receives a grade of B-.

How to buy TRX

Choose your preferred exchange. TRX can be purchased from several cryptocurrency exchanges. The full list of exchanges can be seen ​here​.

Step 1. Head over to your preferred exchange.

If you want to purchase TRX, one of the options is to use KuCoin.

Step 2. Create an account on the exchange of your choice if you don’t already have one.

Step 3. Top-up your exchange balance with some of your BTC, ETH or USDT

On KuCoin, TRX can be purchased with Bitcoin, Ethereum or Tether so make sure to first send over some BTC, ETH or USDT to your exchange wallet. (Don’t forget to double-check that the address you are sending your coins to is correct!)

*Optional​: If you don’t own BTC, ETH or USDT the easiest way to buy them is through ​Coinbase​ or Binance US.

Step 4. Choose your trading pair

Head over to the exchange and choose BTC to purchase TRX with.

Step 5. Purchase TRX with a market or a limit order.

If you want to buy just a small amount instantly, it is easiest to use a Market Order.

Input the amount of TRX you want to purchase and press Buy.

If you need to purchase a large amount of TRX, it is best to use a Limit Order to get the best possible price.

Input the amount of TRX you would like to purchase and the price at which the order should be filled at and press Buy. (It might take some time for the whole order to be filled if you are purchasing a large amount).

Step 6. Store your TRX on one of the supported wallets for increased security.

To store TRX, you can use Trezor​, or Ledger for improved security.