We remain impressed by the evolution of Tron as a stablecoin leader. Its track record is solid but could be under threat. In the attached research piece, Jake and Ali take a detailed look at this stablecoin specialist.
Executive Summary
Tron’s evolution from its 2017 Initial Coin Offering (ICO) to a stablecoin payments powerhouse in 2025 is one of the more striking arcs in crypto. At the heart of its rise is an architecture designed for efficiency: the “Delegated Proof-of-Stake” consensus mechanism delivers fast block validation, while a dual resource model splits costs between Bandwidth for transaction size and Energy for smart contracts. By staking TRX, users gain access to these resources without constant token burns, a system that underpins millions of free transactions each quarter and positions Tron as one of the lowest-cost settlement layers for global payments.
That infrastructure has made Tron the backbone of stablecoin flows. It now hosts roughly half of Tether’s supply and clears billions in daily USDT volume, surpassing even Ethereum on that front.
Yet the growth story is not without tension. Tokenomics have turned inflationary for the first time as reduced burns weigh on supply, while revenues have been squeezed by shifting activity.
Still, momentum remains, anchored by expansion efforts in DeFi and AI through the Builders League, plus integrations with players like deBridge and MetaMask that strengthen cross-chain reach. The ecosystem counts over 1,400 dApps and partnerships ranging from Tether to U.S. government data initiatives.
Against competitors, Tron’s position is nuanced. It outpaces Ethereum on fees but lacks the same gravitational pull for developers. It dwarfs XRP and Stellar in payments volume despite their narrow focus on that vertical, and it offers a compelling challenge to PayPal and Stripe in cross-border remittances, where high fees remain entrenched. Visa and Mastercard still dominate in scale, but Tron’s low-cost, always-on settlement offers speed and access for underbanked markets that TradFi rails continue to miss. At the same time, new threats are closing in: Ethereum and L2s are narrowing the efficiency gap, while Tether’s push into Bitcoin’s Lightning Network rails could redirect institutional flows toward security-first settlement layers.
Our March 2025 LITMUS rating captures this balance, awarding Tron an “A” with a score of 77/100. Market leadership and execution are clear, but decentralisation concerns, ESG scrutiny, and inflationary pressures remain watchpoints. Even so, Tron has carved out a role as crypto’s payments specialist, one defined less by hype than by utility. Whether it can refine its model fast enough to defend its stablecoin crown will shape its trajectory in the next phase of an increasingly competitive market.
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