Tron boasts a market capitalization of $10.6 billion, ranking 12th overall. In June, its native coin TRX increased by 9% to $0.12.
Discrepancy with Microeconomic Indicators
However, this price rise is not supported by microeconomic indicators. The total value locked (TVL) in the Tron network decreased by 26% since its March peak. It also fell by 8.3% from the beginning of the month to $7.7 billion. The question arises: how does the coin’s value increase despite the apparent capital outflow from the network?
Performance in Decentralized Applications
Furthermore, Tron’s products do not rank in the top 50 for rewards generated from staking in decentralized applications.
This is because JustLend, the leading platform with a TVL of $5.4 billion (70% of Tron’s total TVL), shows zero yield. The issue remains: who locks their coins without any returns? Additionally, 94% of JustLend’s assets are BTCT (TRC-20 token), which is not traded on centralized or other decentralized exchanges.
Challenges and Controversies
In February, USDC issuer Circle announced it would stop minting and supporting the stablecoin on the Tron network, citing security and transparency issues. In April, the SEC updated its lawsuit against Tron and Justin Sun, accusing them of securities law violations and market manipulation. This includes artificially inflating TRX and BTT.
Growth in USDT Usage
Tron’s only area of consistent growth is USDT usage. Over half of the stablecoin’s circulation is on the Tron network. In 2024, USDT’s market cap on Tron grew by 23% to $57.1 billion.
However, this growth occurs amid major players abandoning USDT due to new legislation like MiCA and criticism over its increasing use in criminal activities, as noted by the UN’s Southeast Asia division.
Conclusion: Unpromising Investments
Considering the opaque pricing and external pressures on Tron and Justin Sun, investments in TRX seem unpromising.
