Tron, an alternative to Ethereum, made significant waves in the decentralized finance (DeFi) space. At time of writing, Tron’s native token, TRX, ranked among the top 10 cryptocurrencies, boasting a market cap exceeding $14 billion and a Total Value Locked (TVL) of $8.1 billion. The daily trading volume for Tron surged to $137.95 million, highlighting its growing popularity in the crypto world.
The growth of Tron’s investment ecosystem was driven by its strong protocol interoperability, presenting a potential opportunity for individuals looking to diversify their crypto portfolios.
Tron was created in 2017 by Sun Yuchen, widely known as Justin Sun, as an alternative to Ethereum. The blockchain project was envisioned as a way to redefine the internet. With this goal, Tron managed to attract a global network of investors and developers, although it primarily focused on China, earning it the nickname “Asian Ethereum.”
Unlike other blockchains that concentrated on advancements in cryptography or network design, Tron emphasized decentralized applications (dApps), smart contracts, tokens, and the delegated proof-of-stake (DPoS) consensus mechanism, which had been introduced by earlier projects. Tron also garnered attention due to its compatibility with Ethereum.
In 2018, the Tron Foundation acquired BitTorrent, a pioneer in peer-to-peer networking, which led to the launch of the BitTorrent token (BTT) on the Tron blockchain in 2019.
Originally launched as an Ethereum-based token, Tron migrated to its own network in 2018. The architecture of Tron’s network consisted of three layers:
- Core Layer: This layer handled the computation of instructions.
- Application Layer: This layer was used for creating wallets and dApps.
- Storage Layer: This layer was responsible for data segmentation.
Tron utilized a Decentralized Proof of Stake (DPoS) consensus mechanism, where 27 rotating “super representatives” validated transactions and maintained the system’s history. Tron users participated in the consensus system by staking TRX, which granted them Tron Power and voting rights. TRX also played a crucial role in utilizing dApps on the Tron network and participating in the protocol’s operations.
In 2020, Tron 4.0 was launched, introducing privacy protocols, TRC-20 tokens, and cost-efficient shielded transactions. By 2021, Tron transitioned to governance by a Decentralized Autonomous Organization (DAO).
Tron became one of the largest ecosystems in decentralized finance (DeFi). However, Tron’s Total Value Locked (TVL) was primarily dominated by a single ecosystem: JustLend.
Type of dApp: Lending
JustLend, a decentralized lending protocol, was exclusively supported by the TRON network. It provided an ecosystem for lending and borrowing digital assets, including TRX, Bitcoin, Ethereum, and stablecoins. The app relied on pools with algorithmically determined interest rates, enabling users to supply and borrow tokens in an automated and risk-controlled environment. Some of its unique features included auto-matching orders via smart contracts, real-time lending and borrowing, and automatic liquidation when the collateral value fell below a certain threshold.
Interest accrued at each TRON block generation, approximately every three seconds. The protocol issued jTokens backed by supplied assets, allowing token holders to earn interest.
By the time of this writing, JustLend had dominated Tron’s DeFi landscape with a TVL of $5.873 billion, significantly outpacing other protocols within the Tron ecosystem.
Tron emerged as a major player in DeFi, driven by its robust architecture and JustLend’s dominance, offering significant opportunities for investors seeking diversification in the crypto space.
