- Tron is much cheaper to use than Ethereum and tends to process more transactions per day.
- The Layer 2 platform is superior to Tron because it boasts several advantages that Tron lacks.
- “If Ethereum could significantly reduce gas prices in the near future, yes, Tron could lose this advantage.”
- Overall network activity on Tron seems to be limited to forwarding and its gambling applications.
Tron (TRX) has long been the butt of jokes and insults from much of the crypto sector, dating back to 2019 (and earlier) and continuing to this day.
But in the past year or so, it’s increasingly hard to ignore, as illustrated by the fact that the supply of tether (USDT) stablecoins on the blockchain has overtaken Ethereum’s own supply many times. Became a rival of (ETH).
At the time of writing, each network on both blockchains has about the same amount of USDT (US $ 32 billion), but Tron itself is celebrating the recent arrival of 100 million active accounts. Such numbers portray a steadily growing network, especially one that could challenge the dominance of Ethereum’s crypto sector at some point in the future.
However, the question of whether Tron is a serious rival to Ethereum is well-mixed, and Ethereum supporters have few meaningful projects built on smaller blockchains. Insist. Still, some argue that increasing Tron’s USDT supply and lowering fees could help Tron expand further. This process is underpinned by Ethereum’s delay in the transition to Proof of Stake.
How Tron ate Ethereum pie
In addition to the large supply of USDT, there is one area where Tron clearly outperforms Ethereum. It’s a daily transaction. Based on Etherscan and Tronscan figures, Ethereum typically manages 1 to 1.3 million transactions per day for about a year and a half, and Tron processes more than 3 million transactions over the same period.
In fact, in recent months, Tron’s daily transactions have increased from 4 million to about 6 million since April. This is a fact recognized by the Ethereum community, ConsenSys‘DeFi economist David Shuttleworth says there is a simple reason for this.
“In short, Tron is much cheaper to use than Ethereum and now tends to process more transactions per day at a ratio of about 6: 1”, he said. Cryptonews.com..
This is a view shared by most other commentators in the cipher. Boule FundMark Jeffery asserts that the increase in Tron usage is being driven by traders who are dealing with large amounts of stablecoin and want to lose as little as possible in a large number of transactions.
“USDT is much cheaper to travel on Tron than Ethereum-gas prices are much cheaper. When traveling USDT between exchanges (common use case), Tron is the cheapest way,” he said. Said.
Taking a closer look at Tron’s pricing structure, David Shuttleworth explains that “normal” is only a small part of a penny, but can vary depending on the amount of TRX bet by the user. However, the same is not true for Ethereum.
“On the other hand, Ethereum’s gas prices are significantly higher, with more than US $ 10 in heavy congestion. […] Ultimately, this suggests that users will move to Tron instead of Ethereum to complete transactions such as USDT transfers, “he said.
Can Tron continue to grow (at the expense of Ethereum)?
It’s hard to deny that Tether’s prices are significantly lower than today’s Ethereum, resulting in an increase in Tether-supplied Tron’s share, but whether it can continue to grow as it did in the past few months. Opinions are much more complicated.
For one thing, industry figures confirm two possibilities: 1) The price of Ethereum will be reduced. 2) Using an Ethereum-based Layer 2 solution (eg) polygon, Arbitram, Optimism) Will also grow.
Therefore, it is uncertain whether Tron will gain a larger share of the USDT supply.
“In my opinion, users will continue to use TRON instead of Ethereum whenever possible, especially if gas prices are exorbitantly high (for example, simple transfers), but with the implementation of EIP-1559 and EIP-1559. , Ethereum gas prices are getting cheaper. Except for some outliers, the downtrend will continue, “Shuttleworth said.
He also suggests that the Layer 2 platform will outperform Tron. Because their price is still a bit higher than Tron, it still boasts some of the advantages that Tron lacks.
“They offer more interoperability and configurableness, and users don’t have to leave the Ethereum ecosystem (which poses different levels of friction and security risks, such as bridging),” he says. I did.
Another potential issue is some important issues between the two that can cause friction for developers, even though Tron is using its own version of the Ethereum virtual machine, TVM. There is a difference.
“Therefore, if a developer builds a successful application on Ethereum, but it needs to make changes to the codebase to work with Tron, this is another hurdle that can reduce volume. The way is for the developer to build it completely on Tron, independent of Ethereum. This is something I haven’t seen much, “he said.
Other commentators, who have little to do with Ethereum, have a more complex view of the future.
“If Ethereum can significantly reduce gas prices in the near future, yes, Tron could lose this advantage, but Ethereum is at least a year away from this goal,” said Mark Jeffery. increase.
According to him, Ethereum is currently vulnerable. This is because there are already multiple Ethereum virtual machine (EVM) chains that are proof of stake, scalable, very fast, and very low gas rates.
“If we continue to slow down our competition with these competitors, any alt-EVM chain could replace Ethereum,” he added.
Also, “it is a big advantage that more tethers move on the chain than anyone else”, so Tron is better suited to compete with Ethereum than many other EVM chains.
Tron currently accounts for approximately US $ 3.9 billion locked in (per DefiLlama), compared to Ethereum’s US $ 45.5 billion. So if it becomes a truly dominant chain, you need to do more than just help people move USDT.
“But the problem is that the overall network activity on Tron seems to be limited to forwarding and its gambling applications. […] It’s not a necessary activity to support the blockchain economy over the long term, “said David Shuttleworth.
He argues that it is not clear what meaningful projects are being built within the Tron ecosystem.
“Instead, a significant portion of Tron’s daily activities are related to betting services such as TronBetLive and TronBetDice. You will also notice that most of the activities are related to transfers. Supports the above theory that users take advantage of Tron’s cheaper rates when completing various transfers, “he added.
Such interactions can generate volume, but for Shuttleworth, they are not enough to sustain the blockchain economy for the long term. It is also interesting to note that it is Tron’s largest dapp (decentralized application). SunSwapIs well ahead of the rest of the top 10 in terms of number of users. This supports the claim that Tron’s ecosystem is not particularly deep.
So if you want to overtake Ethereum right away, Tron still has a lot to do. Again, Ethereum itself has a lot to do if it wants to maintain its dominant position. Network effects alone may not be enough to compensate for higher rates and lower speeds over the long term.
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