What's Driving TRON's Meteoric Rise?

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The crypto market is experiencing a significant bull run, with Bitcoin ETFs surpassing $55 billion in assets under management and the price of BTC repeatedly breaking through the $70,000 mark to set new all-time highs. Amid this industry-wide surge, the TRON network has emerged with a powerful and unique consensus, demonstrating remarkable resilience and growth.

The platform's native token, TRX, has seen its price climb steadily over recent months, approaching its own historical high. Over the past year, TRX has delivered an impressive 139.5% gain, providing substantial returns for holders and highlighting its exceptional market performance. TRX has firmly positioned itself within the coveted "$10 billion market cap club," boasting a valuation of approximately $11.9 billion. Furthermore, the Total Value Locked (TVL) on the TRON network has surpassed $25.8 billion, enabling TRX to capture significant value.

Unlike many legacy projects that have remained stagnant, TRX's consistent market performance under Justin Sun's leadership underscores its inherent utility and value proposition. This strength is not only reflected in TVL growth and protocol revenue but also in TRON's rapidly expanding ecosystem and, perhaps most importantly, its dominant position in the stablecoin market. These fundamental factors collectively contribute to TRX's growing consensus and market valuation.

Key Factors Behind TRX's Strong Performance

Analyzing TRON's On-Chain Metrics: Is TRX Undervalued?

TRON's on-chain data reveals outstanding performance across key metrics, particularly in TVL and protocol revenue.

Total Value Locked serves as a critical barometer for DeFi ecosystem health, indicating the total value users have locked in various protocols. It represents the most direct data point in the battle for liquidity among public blockchains.

According to DefiLlama, after reaching $6.5 billion in late 2021, TRON's TVL stabilized between $4-6 billion for several years before beginning a steady upward trajectory in 2023. At the time of writing, the network's TVL has reached a record-breaking $25.8 billion.

TRON has stood out in this competitive landscape, demonstrating the most impressive TVL growth rate among major networks. Over the past year, TRON's TVL growth rate reached 84%, outperforming most leading layer-1 and layer-2 protocols including Ethereum, BNB Chain, Arbitrum, Avalanche, and Optimism. While Ethereum maintains its lead in absolute TVL figures, TRON has consistently followed in second place, capturing approximately 10% of the total market share and maintaining its position ahead of chains like BNB Chain, Arbitrum, and Solana.

From this perspective, TRON's TVL performance surpasses that of most blockchains with higher market capitalizations, suggesting that TRX might be significantly undervalued. This hypothesis finds support in the Market Cap to TVL (Mcap/TVL) ratio. For comparison:

A lower Mcap/TVL ratio typically indicates that the market capitalization is low relative to the value of crypto assets locked in its protocols, potentially signaling that the project is undervalued. TRON's ratio is roughly one-tenth that of other major chains, strongly suggesting it may be undervalued.

Beyond TVL, protocol revenue stands as another crucial metric. In both traditional finance and crypto, revenue remains a fundamental indicator of financial health, vitality, and future growth potential. Data from DefiLlama shows that after hitting a daily protocol revenue high of $1.97 million on February 29th, TRON set a new record of $2.31 million on March 5th, with current daily revenue stabilizing around $2 million.

This growth in daily protocol revenue directly reflects the financial vitality and market validation of the TRON ecosystem. High revenue not only signifies greater liquidity within TRON's DeFi landscape but also provides a solid financial foundation for future innovation and expansion. This attracts more developers and users to the ecosystem, creating a virtuous cycle that indirectly empowers the token's price and may positively influence TRX's future price action.

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Dominance in the Stablecoin Arena

Beyond impressive TVL and revenue metrics, TRON has established absolute dominance in the stablecoin sector, effectively leading market demand and rightfully claiming the title as the undisputed home for USDT.

Since October 20, 2023, Tether Treasury has minted over 13 billion USDT across Ethereum and TRON networks. This substantial issuance represents more than just added liquidity; it signifies strong market confidence in TRON's infrastructure, security, and user experience.

Delving deeper into the data, The Block reports that the total stablecoin supply on the TRON network has reached $52.7 billion, surpassing Ethereum and solidifying its commanding position in the stablecoin market. In a landscape historically dominated by Bitcoin and Ethereum, TRON has successfully captured a dominant share of the stablecoin supply, demonstrating powerful market competitiveness.

Data from Dune Analytics further confirms this, showing that TRON leads in both USDT cross-chain incoming and outgoing volumes, highlighting its absolute dominance in stablecoin transactions. In discussions surrounding Real-World Assets (RWA) or cross-border dollar settlement services, stablecoins play an indispensable role. This prevailing trend will continue to benefit TRON as it builds its market competitiveness and influence.

Ultimately, high network usage creates favorable dynamics for TRX supply. As the network grows, it generates continuous fee revenue for the network and contributes to a persistent deflationary state for the TRX token, ultimately positively impacting its price.

The Surging TRON Ecosystem

Leveraging its unique stablecoin advantage, TRON's DeFi ecosystem presents a diverse and vibrant landscape. Core products like Justlend, Sunswap, and stUSDT offer users a wide range of financial services, encompassing lending, trading, and RWA sectors.

Justlend, a cornerstone of TRON's DeFi ecosystem, provides robust lending services. Messari data indicates that throughout 2023, JustLend played a pivotal role, with hundreds of millions of TUSD deposited at various times. Its TVL now exceeds $7.5 billion, representing a major share of the TRON network's total. Mirroring the network's overall growth, Justlend's TVL has shown a steady upward trend, reflecting growing user trust and participation in its lending services.

By offering low-cost borrowing rates and high efficiency, Justlend helps drive prosperity across the entire TRON ecosystem, creating more financial opportunities for users and contributing to overall TVL growth and healthy liquidity.

Sunswap and stUSDT are also indispensable components. Sunswap offers traders a convenient digital asset exchange environment with low fees and high security. Meanwhile, stUSDT, as a synthetic asset, maintains the stable value of USDT while providing more flexible investment and trading options by being pegged to real-world assets.

This combination of quality projects expands the boundaries of TRON DeFi, enriches the ecosystem, and enhances its overall TVL and liquidity health. TRON not only supports the development of quality projects but has also secured multiple strategic partnerships.

Notably, in September of last year, Google Cloud integrated TRON into its BigQuery public dataset, providing users with more convenient data query services. The commercial launch of Huawei Cloud's Web3 Node Engine Service (NES) further injected powerful technical support into the TRON ecosystem. These collaborations significantly improve TRON's comprehensibility and usability while providing developers with more opportunities for innovation.

Building on this foundation, TRON launched the sixth season of its Hackathon, offering a total prize pool of $650,000 to attract innovators and developers globally. This initiative not only acknowledges past collaborative achievements but also signals a commitment to future innovation, laying a solid foundation for the ecosystem's vigorous development.

From an investment standpoint, these strategic partnerships provide TRON with broader application scenarios and greater market recognition worldwide. This recognition will ultimately feed back into TRX's value, forming a stronger consensus around its worth.

Frequently Asked Questions

What is TRX used for on the TRON network?
TRX is the native utility token of the TRON blockchain. It is used to pay for transaction fees, participate in governance through staking, and serve as a medium of exchange within its extensive DeFi ecosystem, including lending platforms and decentralized exchanges.

Why is TRON considered a leader in stablecoins?
TRON hosts the largest supply of USDT stablecoins, surpassing even Ethereum. Its high throughput and low transaction fees make it an ideal network for stablecoin transfers, particularly for cross-border payments and settlements, leading to massive adoption.

How does TRON's revenue benefit TRX holders?
High protocol revenue indicates a healthy, actively used network. This revenue can contribute to ecosystem development and security. Furthermore, the network's fee model involves burning TRX, creating a deflationary pressure that can be beneficial for long-term token value.

What is the significance of TRON's Mcap/TVL ratio?
A low Mcap/TVL ratio suggests that the network's market capitalization is low compared to the value locked in its protocols. TRON's ratio is significantly lower than other major chains, which many analysts interpret as a sign that the TRX token is potentially undervalued.

What are TRON's main future growth areas?
TRON is focusing on several key areas: expanding its "Metaverse Financial Free Port" vision, developing a Bitcoin Layer 2 solution to bridge liquidity between ecosystems, and exploring integrations with Artificial Intelligence (AI) for smarter contracts and payments.

Is TRON a good investment during a crypto bull market?
While investment decisions should always be based on personal research, TRON's strong fundamentals—including dominant stablecoin share, growing TVL, high revenue, and ambitious future plans—position it as a significant player that often attracts attention during broad market rallies.

The Road Ahead for TRON

The Metaverse Financial Free Port

TRON launched its mainnet on June 25, 2018, an event the team celebrates as its "Independence Day" as the token moved away from Ethereum to operate independently. After years of development, TRON has entered a new phase with an updated roadmap and strategic direction.

Last year, on June 7th, insider reports indicated that Justin Sun outlined TRON's established tripartite business model of "public chain + exchange + stablecoin." The future focus will be on deepening its ecosystem and industry development, striving to become a "Metaverse Financial Free Port."

At the StarkWare Sessions 2023 conference, Visa's head of crypto, Cuy Sheffield, mentioned developing a large-value stablecoin payment settlement system on Ethereum and expressed strong optimism about the TRON network. He specifically highlighted TRON's superior performance in processing daily on-chain payments under $200, which significantly aids the realization of the "Metaverse Financial Free Port" vision.

Looking forward, as TRON works towards this goal, it will likely accelerate its internationalization and compliance efforts, continue to foster ecosystem prosperity, and integrate with various industry verticals such as education, environmental technology, and artificial intelligence. This continued development will add more practical utility to TRON's blueprint, painting a more concrete and viable vision for its future growth. More importantly, this strategic direction could open new narratives and growth avenues for TRX's market capitalization, reminiscent of its initial "Independence Day."

Venturing into Bitcoin Layer 2

On February 15th, Justin Sun unveiled plans on social media for a Bitcoin Layer 2 solution and its corresponding roadmap.

It's evident that after a recent period of consolidation following the ordinal inscription hype, the Bitcoin ecosystem is moving toward多元化的发展道路 (diversified development paths). Community demand for more advanced infrastructure is growing, strengthening expectations and consensus, particularly around BTCFi sectors like Bitcoin Layer 2, DeFi, and cross-chain solutions.

With the entry of Bitcoin Layer2 solutions like Merlin and B² Network, the market potential for Bitcoin staking is becoming clear—Merlin alone has already secured over $3 billion in assets. The Bitcoin ecosystem's potential and room for growth remain substantial.

TRON users will not only be able to participate in re-staking initiatives on more Bitcoin Layer 2 networks but will also support the growth of the Bitcoin Layer 2 ecosystem through TRON's diverse asset portfolio, providing strong underpinning for TRX's continued market cap growth.

TRON's进军比特币 Layer 2 (entry into Bitcoin Layer 2) will facilitate the movement of more stablecoins into the Bitcoin ecosystem, enhancing liquidity and vitality for both networks. By enabling interoperability between TRON-based tokens (like USDT, TRX, BTT) and the Bitcoin network, the market size of Bitcoin DeFi—and indeed the entire Bitcoin ecosystem's potential—could flow into TRON. This move provides a compelling narrative to support further increases in TRX's market capitalization.

TRON Embraces Artificial Intelligence

In February of last year, Justin Sun announced that TRON would provide a decentralized payment framework for AI systems like ChatGPT. The framework encompasses on-chain smart contracts, a payment layer protocol, underlying SDKs, and an AI payment gateway. Leveraging TRON's fast and low-cost transactions, developers could easily and securely receive payments for their AI services.

As digital technology rapidly evolves and global AI trends flourish, artificial intelligence has become a key driver across industries. Particularly in the Web3 era, the convergence of blockchain and AI is seen as a definitive future trend, poised to catalyze significant innovation and change. Against this forward-looking backdrop, TRON's proactive embrace of AI development opportunities is a noteworthy举措 (initiative).

While tangible real-world integration between blockchain and AI may take time to materialize, within the hype-driven crypto industry, the addition of AI concepts could usher in a new phase of growth for TRON's valuation. From a long-term perspective, the global AI trend is certain to intensify, and the fusion of blockchain and AI remains one of the most确定性发展方向 (certain development directions). TRON possesses the financial strength to pursue this direction vigorously.

This focus could potentially enhance the execution efficiency of TRON's smart contracts and attract more capital and liquidity into the ecosystem, making TRON more competitive within the industry. This represents a long-term positive factor for both the price and market capitalization of TRX.

The Crypto Evergreen: TRON's Enduring Presence

Throughout the crypto industry's prolonged cycles of change, many assets have faded away with the tides of time. Yet, TRX has remained resilient, weathering market bulls and bears while continuously expanding its rich application scenarios.

Beyond its substantial contributions to industry infrastructure, Justin Sun's influence and leadership as an OG in the crypto space have been prominent across multiple market cycles. Despite facing controversy, he has seldom defended himself publicly. In the liquidity-driven world of DeFi, Sun's contribution to the industry's overall TVL growth is evident, bringing fresh confidence and momentum to the sector.

In this current market upswing, the success of TRON and TRX is undeniable. The consistent growth in TRON's market cap and TVL, repeatedly record-breaking revenue, strategic ecosystem partnerships, and the consolidation of its dominant stablecoin position have all collectively fostered a solid market consensus around TRON.

Simultaneously, current data—such as the Mcap/TVL ratio—and strong community consensus suggest that TRX's value is significantly undervalued. With growing confidence from investors and the community in its future development, coupled with TRON's continuous exploration of new pathways and opportunities, TRX's future potential is poised for continued discovery.

Given Justin Sun's considerable influence in the crypto market, TRON's ambitions undoubtedly extend far beyond its current achievements, and the future of TRX is certainly not limited to its present state. As the crypto bull market gains strength, the value of TRX is likely to be further recognized, consensus will grow stronger, and time will serve as the ultimate witness.