Tron in focus, is it the next big Dapp provider?

By Austras | Crypto in focus | 19 Oct 2021


To build a perfect blockchain you often have to sacrifice something. Security for speed, speed for security, transaction fees for speed & security. Is there a perfect compromise that allows for a stable foundation with strong growth without sacrificing too much? A perfect example for this is Tron, that host a strong ecosystem with strong security & speed, but is the chain worth our time?

Background

Tron originally began as an ERC-20 token on the Ethereum blockchain. It was founded by CEO Justin Sun in 2017, it hosts smart contracts and a novel approach to consensus. It was funded using an ICO where users paid to claim tokens upon release, this was a bit rocky as they had to refund all their Chinese customers due to the ICO breaking regulations in China. During the second year of its lifespan, it both acquired media storage site Bittorrent & migrated to its own native chain. The migration allowed a 1:1 swap for the ERC-20 TRX token to its native currency on its own chain. 

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The time since then has been rocky. The project was mainly handled by the young CEO Justin Sun and people were heavily skeptic. The first few months on its native chain the price pumped heavily, which attracted a great number of investors, it dropped heavily not even a week after reaching its ATH. There are a lot of speculations as to why the price spiked, the general consensus is unclear but a major cause appears to be the praise and attention it got from McAfee founder John McAfee. Along with this the whitepaper seems to have been heavily plagiarized and copied from other projects, Justin Sun spoke out and apologized, blaming the error on translators that did the translation for them for free. Lastly, the coin was proven to be semi/heavily centralized as during a Kucoin hack, the team was able to freeze any stolen Tron and return them.

Network

Tron reaches its consensus through a Delegated-Proof-of-Stake method where there are a small number of 27 super representatives that verify new block creation & chosen by Tron themselves. The 27 super representatives are solely responsible for creation blocks, underneath the representatives there are roughly 100 more super partners. They help maintain development on the blockchain by voting on governance proposals and changes, their votes is based off how many staked tokens they hold from users. The actions of the chain are split among a storage layer, core layer & application layer. As you might be able to tell from the names, these are meant for storage, transactions & smart contracts respectively. These functions are fulfilling the same actions that are allowed by its competitors such as storage same as Filecoin or streaming videos/data same as Twitch.

The main function of Tron is payment and performing smart contracts. As it was originally a ERC-20 token it can perform similar actions, it has also upgraded to have its own NFTs, these being TRC721 tokens. Smart contracts are paid for in Tron and you can utilize one of the unique features on-chain which is called freezing. To perform this, you freeze some of your TRX coins and this allows you to generate energy (you get some energy for free but freezing increases the amount gained). Energy or bandwidth allows you to perform transfers daily for free, normal transactions cost TRX as gas but that cost is fairly minimal.

Use case

The biggest attraction that Tron seems to gather is thanks to its Dapps that have a low barrier for entry thanks to the low transaction. Users making regular payments can do so for almost nothing/free thanks to how the transaction & gas method is set up. There are a wide range of Dapps that rival the likes of Ethereum, offering DEX:es, lending services, streaming/data services and several blockchain based games. The ecosystem built ontop of Tron is the biggest reason behind it having such a high placement on the marketcap list.

Tron today

Tron might seem like a perfect project and it's easy to only focus on the benefits. Using their network for transactions or smart contract based apps are very comfortable and cheap. However, this is thanks to the fact that the network is fairly centralized, so the quick & cheap transactions come with a risk. The team behind Tron headed by Justin Sun has also garnered a bad reputation with the native blockchain launch and its short comings from the white paper & Kucoin hack. It's caught in a place between users advocating its fast & cheap transaction natured, especially on its Dapps, and users that are skeptical on the centralization and blockchain's past. It has been gathering partnerships and new projects & building new features steadily over time so I believe that we'll see more growth from the chain. 

Pros:
  • Low/no fees
  • High TPS and low finality time
  • Strong smart contract ecosystem
Cons:
  • Semi-centralized
  • The team & CEO behind
  • It has built a bad reputation for its shortcomings in the past

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Austras
Austras

Product manager & tutor, love learning & teaching others. || https://cointr.ee/dorfel


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