Tron Price Analysis

Tron Price Analysis

TRON (TRX) hinted at a potential bear trend reversal this week, showing signs that the loyalty of TRX believers might finally bear fruit after a challenging last three months. From the 26th to the 29th of July, its price rose from $0.0359 (Index) to 0.0402, a ~12% jump in under four days

While encouraging, these gains have since fallen away, with TRX currently trading at $0.31. Additionally, in the more medium term, the price of TRX has fallen significantly over the last three months. From trading at ~0.091 on May 2nd it has retracted ~65%.

 bnc chart 6The graph shows the normalized USD price, and volume, of five different TRX trading pairs over the last 90 days.  TRX/USDT, TRX/BTC, TRX/ETH, TRX/KRW and TRX/TRY. The orange line represents an Index of the prices, blue is TRX/USDT, yellow is TRX/BTC, green is TRX/ETH, navy is TRX/KRW and TRX/TRY is turquoise. The bar charts represent total trading volume in USD.

The reason behind last week’s price spike can likely be put down to speculation surrounding the release of a previously announced ‘secret project’, and the first launch of TRON’s Virtual Machine (TVM), a virtual operating system that will be used to implement TRON smart contracts.

Details surrounding these two new initiatives were revealed during an official TRON livestream on the 30th of May, but despite some fanfare from core TRON Project followers, the wider crypto market’s response was a general ‘meh’, and the price of TRX fell sharply in the immediate aftermath of the announcements.

Exchanges and trading pairs

 TRX pairs

The most used trading options for TRX, tend to be crypto-to-crypto with the USDT/TRX, BTC/TRX and ETH/TRX making up over 90% of the current volume in the market. The stablecoin Tether pair is by far the most popular and accounts for over USD 100 million worth of daily volume. The most popular fiat-to-crypto pair is Korean Won/TRX, followed by Turkish Lira/TRX, and there are also on-ramp options for TRX with the US dollar and Indian Rupee.

 Tron UDST X

The most popular exchanges for the TRX/USDT are Okex and Binance, which are respectively the busiest exchanges in the world by 24hr trading volume. Okex, handles ~USD 413 million worth of trading through the USDT/TRX pair. The most popular exchanges for the BTC/TRX pairs are also Okex and Binance. Bitfinex is the most popular exchange for the USD/TRX pair.

The secret’s out: Project Atlas

Speculation abounded that TRON’s ‘secret project’ would be connected to its recently announced, purchase of the BitTorrent filesharing service. This was indeed the case, with the TRON project announcing that it would soon be integrating BitTorrent’s data ecosystem on top of the TRON blockchain. During the livestream, TRON CEO Justin Sun described BitTorrent as the network’s biggest Dapp project.

The primary feature of Project Atlas appears to be TRX based seed rewards for Torrent participants accessing the BitTorrent protocol. Seeding occurs when after a file is downloaded by a user in the ecosystem, the user opts to ‘host’ it, allowing other network users to transfer data between each other without needing a central server.

Currently, the primary rationale for seeders giving up their bandwidth for other users in the network is altruistic/libertarian sentiment. However, with a TRX based reward system, seeders will have a monetary incentive to continue hosting files for longer time periods.

This should extend the length of time of Torrent swarm sizes, allowing files to exist within the ecosystem for longer and provide greater accessibility for more obscure files that would likely disappear quickly without the monetary incentives.

For the TRON network, given the significant usage of BitTorrent as a platform to download and store files, Project Atlas has the potential to create a surge of transaction volumes on the network. If it operates as advertised, then there should be rafts of TRX being consistently sent to the wallets of seeders on the BitTorrent file network, organically creating network activity.

Greater transaction activity is an indicator of a healthy distributed ledger network. The more transactions (data) flowing through a network, the more blocks there are being published on top of user transactions, making them more immutable, censorship resistant, and thereby, more secure.

This outcome certainly seems possible with the TRON/BitTorrent deal, although the nature of the seeder reward system is yet to be revealed, so the effects of the deal on network performance are difficult to predict.

An additional consideration is that as TRON operates using a proof-of-authority consensus algorithm, censorship resistance is already sacrificed because miners are given greater authority over transaction approval than in a proof-of-work model.

In addition, if there is a sudden jump in new transactions, i.e. if Dapps like BitTorrent create heavy user loads, TRON could face coordination challenges.

The nature of the POA consensus model also means there are a limited number of miners handling the TRON blockchain, with Super Representatives who are allocated blocks to mine automatically, in rotation. It is conceivable that if there is suddenly a jump in block production requirements, and these new blocks keep getting allocated to Super Representatives, then TRON will have to decide how to appease other network nodes who are indeterminately allocated fewer rewards. Also, as the Super Representatives are not anonymous, the rest of the network would have identifiable targets to direct their unhappiness towards.

TRON will have to ensure that these governance issues are managed appropriately to avoid the network being paralyzed by power struggles between nodes.

New mainnet, new beginnings

TRON officially launched its fully migrated main network on the 29th of July. Prior to the release many had questioned the ability of TRX to function with stability on its new network.

 LN TRON

However, post launch, TRON’s network statistics indicate growing transactions per day, more addresses on the network, growing block sizes and a larger blockchain. Indicating a steadily expanding ecosystem, and proving naysayers wrong who believed the network was all hype.

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