What Does Data Say About TRON?

• As of June 2nd 2020, TRON is the second-largest blockchain for USDT, with more than 30% of the total USDT issued in circulation. Today, almost $2.9 billion worth of stablecoins circulate on the TRON blockchain.

• Interestingly, TRON’s market capitalization sits just above $1 billion, which means that USDT TRON-based market capitalization stands 2.6 times higher than the base layer protocol that secures it.

• However, excluding USDT, eight utility tokens on TRON rank in the top 1000 of CoinMarketCap, summing to just above $100 million in market cap, led by BTT (BitTorrent) and WIN (WINk).

• Naturally, this small list of utility tokens translates into low volumes in TRON-based DEXs. Yet, two DEXs remain somewhat fairly popular on TRON: PoloniDEX and TronTrade. Each of them recorded in June 2020 more than 750 unique users per day but respective average daily volumes under $250k daily.

• Regarding its dApp industry, TRON saw in June 2020 more than 25,000 unique users daily. In its dApp ecosystem, casino platforms dominate, both from the perspective of users (1.2k - 2.5k daily) and the size of volumes. From the standpoint of users, 7 out of the 10 most used applications on TRON were casinos. Unlike Ethereum, only one DeFi application ranked in the top 10 apps on TRON in regards to one of these two metrics.

• With the road to TRON 4.0, the recent launch of the Sun Network for dApps, and the launch of its crypto-backed stablecoin (JUST), it remains to be seen whether TRON’s popularity could expand outside of Asia.

• However, on-chain transactions barely seem to confirm any TRON bias toward “Asian hours”, with only 51% of the transactions for TRON dApps occurring in UTC am timezones, suggesting that TRON may be more global than we all thought.

Everyone seems to have an opinion about TRON, but what does the data actually say? This report intends to offer a comprehensive yet brief data-driven introduction to TRON. Its focus is on (1) stablecoins, (2) the market capitalization of TRON-based utility tokens, and (3) the TRON's decentralized application industry.

1. TRON: the second largest stablecoin network

Arguably, one of the most critical features of a blockchain is its ability to support stablecoins. In this area, TRON supports USD Tether (USDT), the world’s largest stablecoin, as a TRC-20 token asset (i.e., TRON’s equivalent of an ERC-20 token). On July 2nd 2020, Tether had issued more than 2.8 billion USD on the TRON network.

Conversely, USDT on Ethereum remains the most popular stablecoin, by far, with more than 1.48 million addresses with a positive balance and a supply above 6 billion USDT.

However, with 5,483,041 transactions as of July 2nd, the number of transactions with TRC20-USDT represents about twice the number of transactions with USDC on Ethereum. Similarly, 377,659 addresses own USDT-TRC20 vs. 178,523 addresses for USDC-ERC20. However, its supply is extremely concentrated: 98.45% of the supply on TRON is held by the top 500 holders (and 93.01% by 10 addresses).

Assuming the traditional function for stablecoins, i.e., arbitraging markets across exchanges, TRON is faster and cheaper to use than Ethereum1 for this specific function. Yet, the support for TRC20-USDT is not as widespread as ERC20-USDT on exchanges.

Table 1 - Statistics about stablecoins per network

Source: CoinMarketCap, Coin Metrics, TronScan, OmniExplorer, Etherscan as of July 2nd (UTC 2 am).

In addition, TRC20-USDT’s ratio of supply divided by total transfers differs greatly from other blockchains. This could be explained by a shorter history than other networks, as its inception was in April 2019. For instance, Omni had the lowest figure (~76) of all 4 assets (from table 1) and the oldest inception date.

Similarly, TRC20-USDT has a distribution of its supply very skewed toward a few large wallets owning most of the supply. In comparison, the largest holder of USDC was a contract address on Ethereum: Compound’s contract.

Finally, the ratio of USDT supply by TRON market cap was ~2.6 as of July 2nd, making TRON an outlier in the crypto industry.

2. A limited set of valuable utility tokens

From a technological perspective, TRON supports two primary standards of token:

• TRC-10 standard: its native utility token. Example of tokens include BTT.

• TRC-20 standard: its constructed token standard, similar to ERC-20. TRC-20 tokens are deployed after being compiled on the TRON Virtual Machine ("TVM"). Example of assets include WIN, JUST, and USDT.

Compared to Ethereum, TRON does not support as many tokens with a clear distinctive value proposition. Looking at CMC’s top 1000 cryptoassets by market capitalization, only eight tokens were running on TRON (excluding USDT). Together, their total market capitalization is around $110 million and dominated by BTT (66% of TRON’s total token capitalization) and WIN (20%).

Table 2 - Market capitalizations for TRON-based assets

Source: CoinMarketCap. July 2nd 2020 (UTC 1am)

JUST and USDJ are TRON-equivalent of MakerDAO’s MKR and DAI tokens. Created in May 2020, they remain fairly new, yet each of them having a market capitalization superior to $1 million. Meanwhile, BTT/WIN each has a market capitalization superior to $20 million.

However, it is worth noting that some assets may not necessarily be tracked by price aggregators, hence (likely) leading to this reported aggregated TRON-based token market cap being lower than in reality.

3. A dApp ecosystem focused on casinos

TRON has a popular ecosystem of decentralized applications. According to DApp.Review, TRON ranked the second blockchain per number of daily users, with a number of users superior to 25,000 users daily in June 2020.

Instead, TRON’s community has focused on decentralized and distributed casino applications, as discussed in our past report about tokenization.

Out of the top 10 dApps on TRON, 7 were casinos in June according to the average number of daily users.

Chart 1 - Average number of users per day on TRON dApps in June 2020

Source: Dapp.Review. June 1st - June 30th 2020.

According to the above chart, risky applications (e.g., scams) are also popular on TRON. However, doubtful applications are typical on public blockchains, with similar results found on Ethereum or EOS2. For instance, as of July 2nd 2020, 4 out of the 5 largest risky dApps (per daily volume) were running on Ethereum.

TRON also has some reasonably popular DEXs: PoloniDEX and TronTrade. They both recorded more than 750 unique users per day in June. TronTrade had on average 777 active daily users in July while PoloniDEX had on average 860 daily users interacting with the exchange.

However, according to on-chain data from Dapp.Review, TRON's top three most popular dApps were casino services: 888Tron, FIGHTRON, and RocketGame.

In June, most of these casinos averaged a number of daily users between 1.2-1.5k (vs. less than 900 for the two DEXs mentioned previously), with the exception of 888Tron that averaged 2.5k users per day. However, it is worth mentioning that the number of users can potentially be inflated since TRON’s fee structure is cheaper than other blockchains.

Hence, looking at on-chain volumes might paint a more comprehensive picture. In that regard, casinos also dominated the TRON dApp ecosystem by trading volumes. In June, the three largest applications per daily average volume were WINk, 888Tron, and RocketGame. Each of them exhibited a daily average volume superior to half a million USD.

Chart 2 - Average volume per day on TRON dApps in USD in June 2020

Source: Dapp.Review. June 1st - June 30th 2020 (assuming 1 TRX = 0.016372 USD).

Unlike Ethereum, it is worth noting that only one DeFi application ranked in the top 10 dApps on TRON in regards to these two metrics: TRONTrade - a decentralized exchange. Yet, TronTrade only exhibited a daily average volume of $231,757 per day.

This could be owed to TRON's limited selection of tokens, as discussed in the previous section. Similarly, PoloniDEX exhibited a daily average volume of $91,919 in June. Interestingly, despite the size of the USDT supply, volumes were mostly occurring on TRX quote pairs. For instance, on July 1st 2020, more than 88% of the volumes occurred on TRX quote asset markets. This finding could be explained by the large concentration of TRC20-USDT, which are held on a small number of addresses.

4. Conclusion: popularity in China and upcoming developments

TRON’s target has remained primarly focused on Chinese communities, often with marketing operations exclusively conducted in Chinese.

However, based on on-chain metrics, only 51% of the daily transactions for dApps were conducted in Asian hours (UTC 10 pm to UTC 10 am), which does not represent a significant deviation from the “non-Asian hours”3.

Chart 3 - Breakdown of dApp transactions in Asian hours (UTC 10 pm to UTC 10 am)

Source: Dapp.Review. June 1st - June 30th 2020.

Hence, TRON may be more global than the overall expectation in the industry. Yet, this finding could also potentially be explained by a substantial number of automated transactions on the network.

Developments continue as illustrated by the road to TRON 4.04, attempting to improve privacy (zk-SNARK), scalability (BFT mechanism), and other interoperability mechanisms.

Recently, some developments included the launch of the Sun Network (a second-layer for dApps), the creation of a MakerDAO-like protocol named JUST, and other developments in the "TRON DeFi space".

To conclude, TRON might become one of the coins that should stay on everyone’s agenda, as illustrated by other research outlets that also recently pointed out at the on-chain activity size of TRON5.

1. USDT is free for transfers on TRON but requires bandwidth (that can be obtained for free). https://medium.com/tron-foundation/usdt-is-now-on-tron-18936385a287↩

2. https://dapp.review/explore?category=risk↩

3. This is similar to the methodology used by data provider IntoTheBlock.↩

4. https://medium.com/@TronFoundation/great-voyage-tron-4-0-officially-launches-on-july-7th-49ed3fb1829↩

5. https://flipsidecrypto.com/blog/is-tron-a-scam↩