TBW - Tron: A stablecoin infrastructure under strain

While the total value of USDT on Tron has surpassed that on Ethereum, and Justin Sun recently found himself having lunch with the President of the United States (due to his holdings of TRUMP memecoins), it's a good time to take stock of this low-key but very active ecosystem.

Tron, often overshadowed by other layer 1 blockchains, has been recording strong on-chain activity and notable developments for several weeks.

Presentation of the Tron project

Tron (TRX) is a public blockchain launched in 2017 by Chinese entrepreneur Justin Sun. Its primary purpose is to serve as the infrastructure for Web3, with the initial ambition of transforming the digital entertainment industry by enabling creators to publish, share and monetise their content without intermediaries.

Tron relies on its native cryptocurrency, TRX, used for transactions, network governance and validator incentives. The blockchain is based on a few distinctive principles:

• Consensus DPoS (Delegated Proof-of-Stake): TRX holders elect 27 Super Representatives (such as Binance Staking, Kiln or P2P.org) responsible for producing the blocks. Validators are renewed every six hours, encouraging regular rotation.
• Performance: Tron is designed to theoretically reach 2,000 transactions per second. In practice, it processes between 100 and 120 TPS, or up to 10 million transactions a day, with transaction fees of less than $0.01.
• Architecture and compatibility: The blockchain is based on a three-layer architecture (storage, core, application) and a virtual machine compatible with Solidity.

Financing

The project raised $70 million at its ICO in 2017, mobilising both retail and institutional investors. A significant portion of the tokens went to the TRON Foundation and Peiwo Huanle Co, the company founded by Justin Sun.

These funds enabled Tron to expand rapidly, particularly in Asia. The project then acquired a billion-dollar ecosystem fund, managed by the DAO, to support its expansion. Programmes such as the TRON Builders League were born, with targeted investments in video games, NFTs and AI.

The TRX token

The TRX (Tronix) plays a central role in the operation of Tron: it is used to pay transaction fees, interact with smart contracts, reward content creators and participate in governance.

As of May 2025, around 86 billion TRX are in circulation, almost the entire cap set at 100 billion. The token is trading at around $0.27 with a capitalisation of $20 billion. Inflation is currently limited.

The initial distribution was as follows:

• Public sale (ICO): 40%
• Private sale and strategic partners: 15.75%
• TRON Foundation: 34%
• Peiwo Huanle Co: 10%

Staking allows TRX holders to participate in governance and receive rewards. It is subject to a three-day delegation period, with no risk of slashing.

Business model and financial health

In the first quarter of 2025, Tron generated around $760 million in revenue, mostly from the use of stablecoins, particularly USDT, which accounts for the bulk of the $19 billion to $20 billion in daily transfers on the blockchain.

Tron is currently the main settlement layer for stablecoins, but this dependence is also a point of fragility. The withdrawal of the USDC from Circle in 2024 led to a loss of $335 million in stable assets, illustrating this exposure to a single player, Tether.

In contrast to Ethereum, whose revenues are split between DeFi, NFT and other activities, Tron relies almost exclusively on stablecoin transfers. Its very low fees (between $0.001 and $0.01) enable it to process a large number of transactions, but also restrict its margins, requiring massive volumes to remain profitable. This model remains sensitive to regulatory developments on stablecoins.

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Team and community

Justin Sun is the founder of Tron. He made his name as the head of Peiwo, a social audio application in China, and then as Ripple's representative in Asia. He founded the TRON Foundation in Singapore, which drove the ICO, the mainnet launch and the strategic acquisition of BitTorrent in 2018.

The initial team brought together engineers from Peiwo and BitTorrent, with expertise in social platforms and distributed systems. This core enabled Tron to position itself quickly, particularly in Asia.

Since 2021, Tron has made a transition to a DAO model. Figures such as Dave Uhryniak, Feroz Lakhani and Jason Dukes are playing an active role in driving the ecosystem. The Tronics community remains particularly involved in governance and educational projects.

Governance

The governance model is based on DPoS. Users who "freeze" their TRXs obtain voting power (Tron Power) and elect 27 Super Representatives (SRs). These SRs validate the blocks and can propose changes to the protocol. Candidates ranked 28th to 127th act as backup validators and share rewards.

Any account can apply for SR status. Decisions are taken collectively, with SRs managing protocol parameters and voting on proposed developments. The TRON DAO funds community initiatives, developer grants and hackathons. In 2025, more than 1.2 million TRXs were distributed to DAOs.

However, certain criticisms persist about the concentration of power: the main SRs are often major platforms and the historical holders retain a strong influence. Justin Sun also remains active via the TRON DAO Reserve, which plays a strategic role in shaping the ecosystem.

TRON's strategic fragilities

TRON's rise on the world stage comes with major challenges. While the network is benefiting from strong adoption, particularly around stablecoins, it remains exposed to structural risks and increasing regulatory pressure.

A critical dependence on Tether

TRON currently captures almost half (49.55%) of the USDT supply in circulation ($75.8 billion), compared with 40.79% for Ethereum. This dominant position, achieved through low fees and high throughput, is underpinned by a large user base in Africa and Asia, who use it as an alternative to traditional banking systems.

But this success relies almost exclusively on USDT: 99.25% of the stablecoin value on TRON comes from Tether. Since the withdrawal of USDC in 2024, the network's currency diversity has been almost non-existent. A strategic change by Tether or a regulatory sanction could profoundly affect the economics of the protocol.

>> Paolo Ardoino (Tether): "After USDT, we want to disrupt many sectors"

An increasingly scrutinised geopolitical role

The rise of TRON in digital dollar transfers gives it a significant geopolitical role. The network has become a tool for bypassing traditional banking infrastructures, with $20 billion in USDT transfers per day.

This dynamic is attracting the attention of regulators. The US Treasury predicts a stablecoin market of $2 trillion by 2028 and is stepping up initiatives to strengthen oversight.

The launch of fee-free USDT transfers in February 2025 has amplified TRON's use, but also accentuates anti-money laundering risks.

Artificially inflated volumes

TRON's activity indicators are largely influenced by bots. An AnChain study published in 2019 estimated that 31% of accounts and 19% of transactions on the network's top gambling apps were generated automatically, representing $270 million in simulated volume. Very low account creation fees (~$0.001) still allow groups of bots to generate artificial activity today.

Although TRON shows 8.4 million daily transactions in May 2025, a large proportion of USDT volume appears to come from institutional cash operations, more than from truly distributed uses. Recent studies also indicate that this dynamic is not unique to TRON: bots now dominate stablecoin volume on Ethereum, Solana and Base. However, the lack of up-to-date data on TRON maintains uncertainty about the true scale of the phenomenon.

The implications are real: in 2023, the SEC accused Justin Sun of carrying out more than 600,000 wash trading transactions over 249 days. Since then, surveillance has been stepped up. The joint TRON-Tether-TRM Labs unit is said to have frozen $160 million worth of funds deemed illicit since 2024. Conversely, players such as BlackRock and Fidelity continue to favour Ethereum, both for ETFs and DeFi products. The proposed TRON ETF, filed in May 2025, remains under review, with no sign of mainstreaming by major investors.

The central role of Justin Sun

TRON's governance remains highly personalised around Justin Sun. In March 2023, the SEC brought a civil action against him, accusing him in particular of market manipulation through wash trading and selling unregistered securities (TRX and BTT). The file also mentions the use of celebrities such as Lindsay Lohan or Jake Paul for promotions without explicit mention.

In February 2025, a suspension agreement was reached between Sun and the SEC with a view to a possible settlement. Some see a link to Sun's $75m investment in World Liberty Financial, although there is no direct evidence to date. The fact remains that this case has helped to reinforce the perception of TRX as a security-like asset, which could complicate TRON's access to the US market.

Governance still highly concentrated

TRON has a DAO structure, but the key decisions are in the hands of 27 "Super Representatives", including major platforms such as Binance. The weight of votes remains concentrated, and entities close to Sun retain significant influence. The exact breakdown of the TRX offer is not public, but many observers believe that a significant proportion remains under the control of the first insiders. This centralisation raises doubts about the effective governance of the network.

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Roadmap

Since 2017, Tron has gone through six major development phases:

• Exodus (2017-2019): implementation of DPoS, EVM compatibility.
• Odyssey (2019-2020): strategic partnership with Tether, explosion in volumes.
• Great Voyage (2021): launch of native ICOs, boom in dApps (games, NFT).
• Apollo (2023): integration of real assets via Tron Asset Tokenization.
• Star Trek (2025): launch of BitTorrent Chain (BTTC) and a zkEVM, with persistent technical limitations.
• Eternity (2027): reform of staking ("Stake 2.0") to reduce the influence of the whales, but without any major transformation of the power in place.

The Big Whale's analysis: a solid Product-Market Fit, but under pressure

Along with Bitcoin, Tron is one of the few Layer 1s to have found a real Product-Market Fit, by positioning itself as the global infrastructure for stablecoin payments. The use of USDT on Tron covers both institutional needs (settlement, cash flow) and retail uses (transfers, dollar savings).

But this success rests on a fragile foundation: a strong dependence on Tether, increased scrutiny from regulators, and volumes partly boosted by bots. The development of new blockchains specialising in stablecoins (such as Plasma) or the arrival of solutions from major fintechs (such as Paypal with its PYUSD) could quickly reshuffle the cards.

Tron has so far managed to capture real usage in areas with low levels of banking, but its domination is not a foregone conclusion. To maintain its lead, the network will need to combine regulatory adaptation, revenue diversification, and strengthening institutional trust.

As long as USDT remains central to crypto payments, Justin Sun will continue to play a key role in digital dollar transfer infrastructures. But the landscape is changing fast - and the sun never shines on the same blockchain indefinitely.

>> The Big Whale Report - How payments specialists are integrating digital assets

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