TRON: The only Ethereum killer that has posted gains in the last 6 months

Ethereum is known for its slow processing speeds and high transaction fees. Noticing these shortcomings, several faster, more efficient blockchains have entered the fray, trying to grab a piece of the market.

Some offer blisteringly fast transaction speeds, extremely low processing fees and creative scaling solutions. However, like Ethereum, most of these blockchains have suffered enormously through the current crypto winter. The only exception is TRON.

At the time of writing, TRON's TRX token was down 13.84 percent YTD. At first glance, that might not seem like something to write home about. However, considering that the rest of the 'Ethereum-killers' have all lost upwards of 50 percent during the same period, it is indeed a commendable act. Moreover, TRX has actually gained 1.7 percent in the last 6 months.

But what is TRON, how does it work, and what's keeping it buoyant during these troubling times? Let's find out.

TRON is a decentralised, open-source blockchain built around the proof-of-stake (PoS) consensus mechanism. Like Ethereum, the TRON network also supports smart contracts, making it DApp-friendly.

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It was established in March 2014 by Justin Sun with the aim of decentralising the web. Currently, large tech companies like Facebook and Google control data on the internet. They are also able to analyse and monetise this data, creating a large debate when it comes to privacy and content ownership.

This is the problem that TRON is trying to solve. It is like a decentralised version of the internet that helps users control and monetise their content, be it text, images, audio or video. The main goal is to bypass the corporate middleman from the process of consuming media. This allows content producers to obtain funds directly from consumers. On TRON, users can create, share, or even trade content.

Users on TRON must acquire specific resources to transact or use smart contracts on the network. These resources are of four types, i.e., bandwidth, RAM, CPU and storage. To acquire any of these resources, users need to lock up a certain amount of TRONIX (TRX) with the network. TRX is the native cryptocurrency of the TRON network.

Then, every time a user makes a transaction, bandwidth is consumed. On the other hand, if a user makes a smart contract transaction, energy is consumed. Energy is a unit of CPU resource consumption. Both bandwidth and energy are replenished over a 24-hour period.

TRON is secured by a variation of the traditional proof-of-stake (PoS) mechanism called delegated-proof-of-stake (DPoS). Here, 27 super representatives (SRs) are elected to verify transactions and package them into blocks. TRX holders can vote for their favourite SRs based on past performance and their merits.

These SRs can also propose network improvements, which are either approved or rejected by other SRs along with a second type of TRON node, known as SR partners.

As mentioned earlier, TRON was initially created as a direct challenge to the media industry, which is currently valued at $1 trillion. It even launched with the slogan "Decentralise the Web". However, the network is moving per the roadmap highlighted in its whitepaper. The project is halfway through this 10-year, 5-stage journey and has now expanded its vision to the DApp market.

Like many of its competitors, including Ethereum and Binance Smart Chain, TRON supports a whole gambit of token standards, including TRC-20, TRC-10 and TRC-721 (non-fungible) token standards. This helps developers power a range of novel use cases. Moreover, TRON's DPoS consensus system can easily process around 2,000 transactions per second (TPS), and there are plans to further optimise this in the future.

All these features make it a favourable ecosystem for DApps and DeFi protocols. The blockchain now hosts several such platforms, including BitTorrent (the decentralised file-sharing protocol), PoloniDEX (a decentralised exchange) and the JUST ecosystem of DeFi platforms.

Thanks to its robust capabilities, the TRON network has managed to gain incredible traction in the last few years. By the end of May 2022, the blockchain had over 94 million total user accounts with more than 3.2 billion total transactions.

According to data from DefiLlama, TRON now ranks third in terms of total value locked among all public chains. It currently has a TVL of $5.77 billion, following closely behind BNB Chain and Ethereum.

Also Read: Explained: Consensus protocols, how they work and their importance

Its stablecoin, USDD, has also shot into popularity, ranking 9th by market capitalisation among all USD stablecoins. This is just two months after its launch in May 2022. TRON also hosts the largest circulating supply of USD Tether stablecoin, overtaking USDT on Ethereum since April 2021.

Of late, TRON has also enjoyed backing from major asset management companies. Towards the end of May, Fireblocks announced that it would support the TRON blockchain, including its native TRX token and TRC-20 coins. This was shortly after Crypto Finance, a subsidiary of Deutsche Börse, also announced its support for TRX storage, making TRX available to the entire Deutsche Börse network.