Friday, December 9, 2022

Should I Buy Tron? 5 Things You Should Consider

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Tron price has made a steady recovery after it crashed to a year-to-date low of $0.05 in February. At the time of writing, the TRX token was trading at $0.075, bringing its total market capitalization to over $7.3 billion. This makes it the 24th biggest cryptocurrency in the world. Here are the five things to consider when buying Tron.

Tron is a proof-of-stake coin

Blockchain projects are built using a number of technologies. Bitcoin, the first cryptocurrency in the world, introduced a concept known as proof-of-work. PoW is a safe technology that makes its possible to generate new coins using computer algorithms. While the process is safe, it requires significantly expensive computers and the process is usually expensive. 

Tron does not use the proof-of-work approach. Instead, it uses proof-of-stake, which is a process that uses validators to generate new coins. PoS is usually more environmental friendly and is known for being faster than proof-of-work. 

In fact, some of the best-known blockchain projects have now embraced the PoS technology. Ethereum is transitioning from PoW to PoS during its Ethereum 2.0 upgrade. Other popular platforms using PoS are Polkadot, Avalanche, and Terra.

There are several benefits that come from the fact that Tron is a PoS coin. First, it means that one can easily earn staking rewards. Staking is a process where you just deposit your funds to an exchange like Coinbase and BinanceAfter doing this, you will be earning a certain amount of interest on a monthly. Staking is not possible with PoW networks like Bitcoin and Kadena.

Second, as a proof-of-stake, Tron is a significantly faster blockchain project than other networks. According to its website, it can handle over 2,000 transactions per second. Bitcoin can only handle less than 10 TPS while Ethereum handles less than 20 tps. Third, Tron is easily integrated with other blockchains like Avalanche and Solana.

Tron ecosystem is growing

The second thing you need to know is that the Tron ecosystem is seeing strong growth. In the past few months, the number of developers building using Tron is growing. Most of these developers are in the decentralised finance (DeFi) industries while others are in the metaverse and non-fungible token (NFT) industries. 

According to DeFi Llama, there are now 9 applications built using Tron’s platform. Some of these apps are JustLend, JustStables, SunSwap, and SocialSwap among others. These apps have a total value locked (TVL) of over $4.4 billion. JustLend has a TVL of over $1 billion and is seeing strong growth. With the current TVL, Tron is the 7th biggest app in its ecosystem.

One of the biggest parts of the Tron ecosystem is BitTorrent Chain. It was the first scalable heterogeneous cross-chain interoperability protocol. Apps built in BTTC are compatible with other chains like Ethereum, Solana, and Fantom.

The relationship between Tron and BitTorrent started in 2018 when Justin Sun acquired it. After years of development, they launched BTTC, whose native token is known as BTT and has a total market cap of over $1.8 billion.

Tron is facing strong competition

Another thing you need to know when you want to buy Tron is that its competition is rising substantially. When Tron was launched a few years ago, there were a few competitors. At the time, Ethereum was one of the few platforms with smart contract features. Today, the industry has become so competitive with applications that are using different strategies.

Some of the biggest Tron competitors are Terra, BNB Chain, Avalanche, Solana, and Fantom. All these ones are significantly bigger than Tron. Other smaller ones that are becoming major threats to Tron are Polygon, Cronos, Arbitrum. Waves, and Near. 

All these platforms are changing their industries using different features. For example, Near Protocol and Ethereum have embraced the sharding technology in a bid to increase throughput. On the other hand, Polygon is a layer-2 network whose goal is to supercharge Ethereum applications. Therefore, the growth of Tron price will depend on the number of developers who will embrace the network.

Tron has a stablecoin

Stablecoins are becoming players in the blockchain industry. Unlike normal cryptocurrencies that are highly volatile, these coins are backed by fiat currencies like the US dollar and euro. Some of the biggest stablecoins are Tether, USD Coin, Terra USD, and Binance USD. In total, stablecoins hold over $200 billion worth of assets. 

In April 2022, Tron’s Justin Sun announvced that Tron Foundation was set to launch a new stablecoin known as USDD, or decentralised USD. Once launched, it will be the first stablecoin in Tron’s ecosystem.

Unlike other stablecoins, Tron’s stablecoin will be fully decenttralised, meaning that it will not rely on any centralised organisations to store the reserves. Instead, these reserves will be provided by Tron DAO.

USDD will also be different from other stablecoins because it will not be backed by a fiat currency. Instead, it will be pegged to TRX. As a result, whe the USDD price will fall below $1, users will be able to send 1 USDD to the system and receive 1 USD worth of TRX. It is the same concept like that of Terra USD.

Tron is highly liquid

 

Finally, Tron is one of the most popular cryptocurrencies in the world. As a result, it is offered by most exchanges like Coinbase, FTX, and OKX. It is also one of the most widely held cryptocurrencies. According to its website, it has over 88 million accounts. Therefore, this makes it one of the most liquid cryptocurrencies that you can buy or trade. 

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