The Problem with Tron

Tron came into prominence recently when its price hit around $0.047 after being below $0.02 for most of the year and was likely due to the news of Tron 4.0 being released:

So this is great even after the recent altcoin crash and Tron is definitely worth look at. The question we are asking is “is it worth staking and will it be around in years to come?”.

The Dapps

A peek at Dapp Radar shows Tron has 6 of the top 10 Dapps. Great news! Let’s take a look:

  • TRONCHAIN: a pyramid (ponzi) scam – the lowest of low type of DAPP (to be fair Ethereum has Forsage plus a number of others).
  • TRON2GET: another scam.
  • SharkTron/Defi: stake TRX to get SRX tokens (e.g. staking 7500 TRX gives you 120 SRX per day) with 1SRX~2.25TRX (a 100% ROI within a month). It isn’t listed on CoinGecko but it is on JustSwap by manually adding the contract address. There is a 10% penalty for unstaking and SRX tokens can only be generated by staking TRX and from getting referrals. You can use SRX for gambling using Shark Dice. All scams where you get eaten by sharks.

So we’re not off to a great start with the top 4 Tron apps being scams. JustSwap seems to be the only legit app and is obviously a Uniswap ripoff. Surprisingly there is only one BitTorrent app which I couldn’t open.

Its certainly great to see the biggest Ethereum scam “Forsage” moving to Tron: https://medium.com/forsage/everything-you-wanted-to-know-about-the-tron-blockchain-80ef21f2b1ff. The sooner they get off Ethereum the better – Forsage was leading in Eth gas fees for ages (see my earlier article here). Those high fees have had at least one benefit.

DappRadar is probably accurate when it says “TRON continues to disturb Ethereum’s dominance. Still, 60% of activity remains within the Gambling & High-Risk categories“.

I think that 60% is on the low end…

The Tokens

A peek at JustSwap liquidity shows quite a number of token pairs with around $175 million in liquidity and around $9 million in daily transactions. This figure may be disputed due to wash trading according to here.

Let’s look at the top pairs as of 19/10/2020:

  • USDT-TRX: don’t get me started on USDT – that stablecoin is going to hurt a lot of people one day.
  • SUN-TRX: A meme coin named after the founder. You can only get it on JustSwap and may be used for future defi but nobody knows. SUN’s whitepaper calls it a “social experiment”. $45 million in liquidity and it has no purpose.
  • JST-TRX: JUST(JST) actually appears on CoinGecko. It was airdropped to Tron holders and is used for depositing/lending and is the token for the Tron DeFi ecosystem. According to Tron you can borrow USDJ by using TRX as collateral and the interest (“stability fee”) is paid in JST and this is currently 0.5%/year. This rate is set by holders of JST and I’m uncertain why this is not set by lending/depositing rates and the size of the liquidity pool like it is in Aave.
  • USDJ-TRX: USDJ is the stablecoin. CoinMarketCap shows a market cap of around $11 million (CoinGecko doesn’t show it) and according to the whitepaper is “a USD-pegged cryptocurrency backed by collateral assets, generated through decentralized smart contracts on the TRON network”. According to Tron, your TRX is first converted to PTRX and this is the collateral asset. If TRX crashes then the JUST platform will dilute PTRX to recapitalize the system. It’s not clear how this is done, or how the price of USDJ is adjusted through arbitrage like it is in a stablecoin such as DAI. I can’t see any pools where you can see the liquidity like you can with Aave – does one exist? Maybe they should have called it “JASC” (just another stable coin).
  • WBTT-TRX: A wrapped BTT pool for BitTorrent is worth $5 million? BTT itself initially came from an airdrop.
  • Lots of pointless tokens.
  • A recent DeFi scam was reported here.

Staking

You can stake TRON is one of three ways:

  • Vote a Super Representative
  • Run a Super Representative Candidate Node
  • Run a Super Representative Node

According to Staking Rewards at this time of writing the adjusted rewards were 3.31%, 2.96% and 3.23% respectively:

To be a super representative requires 9999 TRX which isn’t a lot in terms of cost. https://tronscan.org/#/sr/representatives shows the 27 SRs that have received the highest votes.

To make it interesting just type in any of the SR addresses and Google “scam”. i.e. Poloniex looks to be a shady crypto exchange according to this review. Interesting to see an SR called “JustinSunTron” – you’d think that the creator wouldn’t allow an SR to be named after him that points to his twitter account.

I guess the point is that becoming an SR looks to be a difficult process and staking via voting appears to offer the best staking returns. How is this possible? Why would the model discourage those wishing to run a delegated PoS node? Why the voting and limit consensus to 27 nodes when hundreds of nodes would be preferred?

There is certainly some controversy on this https://www.ccn.com/why-is-justin-sun-lying-to-tron-holders-follow-the-money/: “a quick glance at TRON’s staking network shows a severe lack of decentralization. The current Super Representative with the most votes is Binance. Binance controls over 55% of TRON’s block production. Over 98% of Binance’s votes come from its own cold storage address.“.

It just gets better: https://decrypt.co/21108/did-binance-just-help-take-over-steem-network-justin-sun. If you take a look at the names here and do a little SR correlation…

And then there is the problem with token inflation…

Programming Contracts

If you know how to develop contracts in Ethereum, programming Tron is almost identical. The language is Solidity and you can use Tron-IDE (similar to Remix) to develop contracts. There is even a Truffle clone (TronBox). Not surprisingly apart from accusations of plagiarizing several pages of Tron’s whitepaper, the Tron project has been accused of copying the Ethereum Virtual Machine. Let’s hope they’ve fixed the issues that were in EthereumJ.

The copy probably has more to do with Tron wishing to pinch projects from Ethereum, rather than creating its own ecosystem. The TRC20 contracts look very similar to ERC20 ones. Let’s not even hide the name. It certainly saved them a lot in dev costs and Justin Sun is certainly no developer. But it does point to the fact that Tron doesn’t aim to lead in this particular field.

The TRON Team and Justin Sun

Go to https://tron.network/about and look for the team behind Tron. Scroll past the massive pic of Justin Sun and there is a team of …. one Sun.

To be fair with a bit of tunneling you can find the Tron dev head Marcus Zhao: https://twitter.com/Marcus_ZhaoHong and there is a team based in China.

There is little doubt that Justin Sun is very busy on social media and self promotion. Full marks for marketing (other chains need to take note).

Final Thoughts

Tron is a truly decentralized universe and Justin Sun is the center of that universe.

Published by Crypto Cam Tech

Professional developer for 30 years + with the passion for helping others in their journey.

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