Summary of key points
During the third quarter, many indicators of TRON maintained positive growth, including market capitalization (+24%), revenue (+29%), DeFi TVL (+4%), stablecoin market capitalization (+3%) and average daily trading volume of decentralized exchanges (+150%).
In the third quarter, TRONs revenue reached US$151.2 million, a record high. Revenue denominated in TRX increased from 996 million in the previous quarter to 1.05 billion, a 6% increase from the previous quarter.
SunPump, TRONs first meme distribution platform, was launched in the third quarter. The platform performed well, deploying more than 89,000 projects in less than two months after its launch.
In terms of USD, the total value of TRX staked in the third quarter increased by 14% quarter-on-quarter to $6.54 billion. As of the end of the third quarter, the USD value of staked assets on the TRON chain ranked sixth among all Proof of Stake (PoS) networks.
As of the end of the third quarter, the market value of TRON’s USDT reached $58.94 billion, a 3% increase from the previous quarter’s $57.06 billion. In addition, TRON owns more than 50% of the USDT circulation.
Key data
Financial Overview
Market Cap and Revenue
This quarter, TRXs circulating market value increased from $10.9 billion to $13.5 billion, achieving seven consecutive quarters of growth. In addition, TRXs market value ranking rose by one place, from 10th to 9th. The TRX/BTC exchange rate rose by 24% month-on-month. Due to the deflationary nature of TRX, the reduction in market circulation also pushed up the price of TRX.
TRON uses a resource model to execute on-chain transactions. The basis of this model is to issue bandwidth and energy to pledged users. As long as the pledged users obtain enough resources, they can use these resources to execute smart contracts for free. If the computing power called by the user exceeds the resources they obtain, they must pay TRX fees. In addition, all TRX used to pay transaction fees will be destroyed, which also constitutes a source of income for TRON.
TRONs revenue in the third quarter hit a record high, increasing from $117.5 million to $151.2 million, a 29% increase from the previous quarter, achieving a new milestone. Revenue denominated in TRX increased from 996 million in the previous quarter to 1.05 billion, a 6% increase from the previous quarter.
The reason why TRONs revenue in the third quarter increased significantly is mainly due to the wide acclaim of the meme distribution platform SunPump (for more information about SunPump, please refer to Ecosystem Overview). The activity of the SunPump platform began to rise on August 16, and showed a parabolic growth trend in the following two weeks. From August 16 to 31, a total of more than 270.3 million TRX (about 42 million US dollars) were destroyed, accounting for nearly 27% of TRONs revenue in the third quarter. In addition, the amount of TRX destroyed on August 21 (34.7 million) set a record for the largest amount of TRX destroyed in a single day since TRON was founded.
Supply data
The circulation of TRX is affected by two factors: TRX destruction and TRX rewards. All transaction fees paid in TRX are destroyed, resulting in a deflationary nature for the TRX supply. In addition, a portion of TRX is distributed as rewards to stakers and block producers, and the daily minting of this portion of TRX is approximately 5.06 million. Therefore, as long as the daily destruction of TRX exceeds 5.06 million, its circulation will decrease over time.
As mentioned above, TRX is one of the few deflationary L1 network tokens. The circulation of TRX in the third quarter decreased from 87.2 billion to 86.62 billion. After annualization, TRXs annual inflation rate is -2.7%, and the annualized inflation rate this quarter has decreased by 11% from the previous quarter (-2.4% in the previous quarter).
Newly minted TRX will be distributed as rewards to stakers and block producers. TRON encourages users to participate in TRX staking through a series of incentives:
Block Rewards - As a reward, TRON Super Representatives will receive 16 TRX for each block produced (which will be adjusted according to the on-chain governance rules). After the block is produced, the Super Representative retains part of the reward according to the set commission ratio, and the remaining TRX is distributed to the voters.
Voting Rewards - Super Representatives ranked 28-127 in votes will become Super Representative Partners in the next round. Although Partners do not participate in block production, they can still receive voting rewards, and users who stake TRX and vote for them will also receive corresponding rewards. For each block generated, Super Representatives and Super Representative Partners will share 160 TRX according to the proportion of TRX votes received.
The actual annualized yield of TRX staking in the third quarter increased by 13% month-on-month, from 6.9% to 7.7%, mainly due to the increase in TRX destruction.
Network Overview
Usage
TRONs on-chain activity indicators (number of transactions, number of active addresses, number of new addresses, etc.) have maintained growth momentum for two consecutive quarters. Among them, the average daily number of transactions on the network increased from 6.3 million to 7.2 million this quarter, a month-on-month increase of 14%.
TRONs various on-chain activity indicators (number of transactions, number of active addresses, number of new addresses, etc.) all increased in the third quarter. The average daily number of active addresses increased from 2 million to 2.1 million, a 6% increase from the previous quarter.
The average daily number of new addresses of TRON continued to rise this quarter, increasing from 198,000 to 208,500, a 5% increase from the previous quarter. About 10% of the active addresses in the third quarter were new addresses, a slight increase of 1% from the previous quarter.
Most of the transaction types on TRON are still wallet transfers and stablecoin transactions. Wallet transfers increased by 10% month-on-month, from 2.8 million to 3.1 million; stablecoin transfers increased by 4% month-on-month, from 2 million to 2.1 million. Overall, wallet transfers and stablecoin transactions accounted for 73% of all transactions in the third quarter, a decrease of 6 percentage points from 78% in the previous quarter. The largest increase in market share was in DeFi transactions. The launch of SunPump brought a meme transaction boom to the SUN platform, so the number of DeFi transactions surged in the third quarter, up 487% month-on-month to 44,000 transactions. DeFi transactions accounted for nearly 1% of the total number of transactions on TRON in the third quarter. In addition, the other type of transactions also increased significantly month-on-month, from 1.3 million to 1.8 million, an increase of 38%. “Other” transactions include account creation, SR account creation, account permission update, proposal initiation, and other non-smart contract operations on the network.
Wallet transfers and stablecoin transactions have always been the main activities of TRONs daily active addresses. In the third quarter, an average of 1.6 million addresses conducted wallet transfers every day, a 10% increase from the previous quarter. The number of addresses participating in stablecoin transactions has declined slightly. In the third quarter, an average of 624,800 addresses conducted stablecoin transactions every day, a 1% decrease from the previous quarter. The number of active addresses participating in DeFi transactions has also shown an upward trend, increasing by 263% from the previous quarter to 6,700. At the same time, the number of active addresses participating in blockchain games increased by 2% from the previous quarter to 900.
Security Decentralization
TRON uses the Proxy Proof of Stake (DPoS) election mechanism and the Practical Byzantine Fault Tolerance (PBFT) consensus algorithm to maintain the security of its network. The DPoS election is held every 6 hours, and the 27 elected Super Representatives (SRs) take turns to produce blocks. Users who want to participate in running TRON nodes can pay 9999 TRX to become a Super Representative candidate.
Relying on only 27 Super Representatives to protect the network may be questioned as there is a certain centralization risk, but at the end of the third quarter, more than 419 Super Representative candidates received votes, compared to 416 in the second quarter. A more diverse candidate base helps alleviate concerns about network centralization and advocates for a more distributed governance model, thereby improving network stability and security. As can be seen, the number of Super Representative candidates is growing, which will encourage voters to cast their votes for new candidates. In addition, no Super Representative received more than 10% of the total votes. In the recent election vote, Binance Staking received the most votes, winning 3.36 billion votes out of 41.36 billion votes (8% of the votes).
Although there may be many benefits to using democratic voting to generate blocks and continuously increasing the number of super representative candidates, no measure can completely avoid the risk of centralization. Indicators such as the diversity of node geographical locations may also affect the degree of centralization of the network. As of the end of the third quarter, TRON had 7,954 nodes in 78 regions around the world (7,474 in the second quarter), of which Europe had the most nodes, accounting for about 39% of the total. Many Layer 1 networks have the problem of too much node concentration. Due to geopolitical risks, laws and regulations, natural behavior, etc., deploying too many nodes in the same location may affect the health of the network.
Currently, users can stake TRX through Stake 1.0 and Stake 2.0. Stake 2.0 (TIP-467), a new staking mechanism, was launched in April 2023. It distinguishes low-frequency staking operations from high-frequency resource proxy operations by adding a new protocol layer. At the same time, users can proxy resources again without unstaking, which improves resource utilization. It is worth noting that all TRX stakes after April 2023 are carried out through Stake 2.0, but the TRX previously staked by users through Stake 1.0 is still valid.
The TRX staking rate (the proportion of TRX staking to the total circulation) in both modes fell slightly in the third quarter, to 48%. However, more and more users switched from Stake 1.0 to Stake 2.0. As of the end of the third quarter, the TRX staking in Stake 2.0 increased by 30% quarter-on-quarter to 20.5 billion, while the TRX staking in Stake 1.0 decreased by 30% quarter-on-quarter to 21.42 billion. At the end of the third quarter, the total TRX staking was 41.93 billion, a decrease of 9% quarter-on-quarter. However, due to the increase in TRX prices, the total TRX staking increased from US$5.76 billion to US$6.54 billion, a month-on-month increase of 14%. As of the end of the third quarter, the value of staked assets on TRON ranked sixth among all Proof of Stake (PoS) networks, up two places from the previous quarter.
If a malicious actor wants to manipulate the network by controlling two-thirds of the nodes, they would need to control 18 of the 27 super representatives. This means they would need to control two-thirds of the total stake, which was 27.95 billion TRX ($4.36 billion) at the end of the third quarter.
The gas fee consumed by transactions is called bandwidth, and the handling fee consumed by contract calls is called energy. Users can stake TRX to obtain corresponding resources:
Bandwidth obtained by account pledge = (number of TRX pledged for bandwidth / total number of TRX pledged for bandwidth in the entire network * 43.2 billion)
Energy obtained by staking an account = (the number of TRX staked to obtain energy / the total number of TRX staked to obtain energy in the entire network * 90 billion)
Most of the TRX staked by users on TRON is used to obtain bandwidth. The corresponding staked amount in the third quarter decreased from 38.59 billion to 27.46 billion, a decrease of 29% month-on-month. In terms of energy stake, the TRX staked amount increased from 7.64 billion to 14.47 billion, an increase of 89% month-on-month, partly due to the increase in the handling fee of Meme transactions. The staked amount corresponding to each type of resource is related to its consumption trend. Daily bandwidth consumption increased from 1.83 billion to 2.12 billion, an increase of 15% month-on-month; daily energy consumption increased from 83.98 billion to 110.76 billion, an increase of 32% month-on-month.
Development progress
In the third quarter, TRON passed a series of proposals aimed at alleviating on-chain congestion and reducing transaction fees.
Proposal No. 92 (August 25) — Increases the total energy limit of TRON to 120 billion. 20 of the 27 super representatives voted in favor of passing the proposal.
Proposal No. 94 (September 12) - Increases the total energy limit of TRON to 150 billion. 21 out of 27 Super Representatives voted in favor of passing the proposal.
Proposal 95 (September 19) – Modifies the threshold of the Dynamic Energy Model to 5 billion, the price per unit of energy to 0.00021 TRX, and the maximum increment factor of the Dynamic Energy Model (in basis points) to 34,000. 22 of the 27 Super Representatives voted in favor of passing the proposal.
Proposal 97 (October 3) – Increases the total energy limit of TRON to 180 billion. 21 out of 27 Super Representatives voted in favor of passing the proposal.
Ecosystem Overview
DeFi
TRON saw mixed results in total staked volume (TVL) in Q3. TVL in TRX decreased from $62.59 billion to $51.91 billion, a 17% decrease from the previous quarter. However, TVL in USD increased from $7.8 billion to $8.09 billion, a 4% increase from the previous quarter. TRON still holds the second position in the TVL ranking of all networks, leading the third-ranked BNB Smart Chain by nearly $2.69 billion (the latter currently has a TVL of $5.4 billion).
The top three TVL protocols on TRON are JustLend DAO, JustStable, and SUN. This quarter, the TVL of the JustLend DAO protocol fell by 1% (down $46.4 million) from $5.8 billion to $5.75 billion; despite the decline in TVL, the net borrowing amount on JustLend DAO increased from $87.9 million to $101.3 million, up 15% from the previous quarter, which may indicate that TRON users are more willing to use leverage. In previous quarters, BTC accounted for more than 90% of the TVL of the JustLend DAO protocol. As of the end of the third quarter, BTC accounted for only 48% (US$2.74 billion) of JustLend DAOs TVL, and TRX accounted for 27% (US$1.56 billion), ranking second; JustLend DAOs TVL accounted for 71% of TRONs total, down 4% from the previous quarter.
TVL of JustStable, a collateralized debt position (CDP) protocol, grew by $132.3 million this quarter to $1.58 billion, up 9%. TVL assets on JustStable are all TRX. In addition, the amount of TRX deposited in JustStables decreased from 11.58 billion to 10.11 billion, a 13% decrease from the previous quarter, indicating that the increase in TRX prices has driven the growth of TVL of JustStales protocol, thereby also pushing its TVL in the overall TVL of TRON from 5% in the previous quarter to 20%.
The TVL of the SUN platform increased the most in the third quarter (39%), from $542.4 million to $755.4 million, partly due to the launch of SunPump in this quarter. The SUN platform consists of three AMMs (automated market maker protocols): V1, V2, and V3. As of the end of the third quarter, the TVL of V1 was $365.7 million (48%), the TVL of V2 was $200.4 million (27%), and the TVL of V3 was $184.6 million (24%). In addition, the TVL of the SUN platform accounted for 9% of the total TRON, an increase of 34% month-on-month. The TVL of the three platforms JustLend DAO, JustStable, and SUN accounted for more than 99% of the total TRON DeFi ecosystem.
SunPump
On August 12, SUN launched the SunPump launch platform, where all TRON users can deploy tokens (especially Meme). SunPump uses the bonding curve mechanism for initial price discovery.
After several major announcements, SunPumps popularity began to rise:
August 13 – Cryptocurrency exchange HTX announced that it will list popular memes on the SunPump platform that meet certain conditions.
August 14th - Cryptocurrency exchange Poloniex announced that it will list popular memes on the SunPump platform that meet certain conditions.
August 15th - SunPump announced the launch of a $10 million Meme ecosystem incentive program.
August 16th - Dexscreener, a well-known on-chain token browser, announced that it will support TRON.
SunPumps activity peaked on August 20, with more than 7,500 memes issued in just one day, generating 3.7 million TRX (about $585,000 at the time). By the end of this quarter, more than 89,000 projects had been issued on SunPump, generating 34.5 million TRX (about $5.4 million at the end of this quarter). In addition, SunPump has also led to the birth of many popular meme communities.
Decentralized Exchange (DEX) Trading Volume
After the launch of the SunPump platform, TRONs decentralized exchange (DEX) activity reached its highest level since 2022. The average daily DEX trading volume in the third quarter rose from US$26.4 million to US$65.8 million, a 150% increase from the previous quarter. SUN V2 is responsible for the Meme escrow liquidity pool issued by the SunPump platform, so its trading volume has increased significantly under the influence of SunPump. SUN V2s average daily DEX trading volume in the third quarter rose from US$2.6 million to US$27.9 million, a 982% increase from the previous quarter.
Most of TRONs DEX trading volume is concentrated on the SUN platform. In June 2023, SUN introduced the centralized liquidity (CL) automated market maker (AMM) to the SunSwap V3 series. During the first quarter of 2024, more than half of the transactions on the SUN platform were processed by SunSwap V3s AMM for the first time. Although Meme drove up the trading volume of SUN V2, the above trend was not affected in the third quarter, and the trading volume on SUN V3 accounted for 51% of TRONs total trading volume (average daily trading volume of US$33.3 million).
Stablecoins
The market value of TRONs stablecoins has been rising steadily over the past year, and the third quarter was no exception. This quarter, the total market value of TRONs stablecoins increased from $58.02 billion to $59.97 billion, a 3% increase from the previous quarter. TRONs version of USDT still dominates stablecoins, accounting for 98% of the market value, which is the same as the previous quarter. As of the end of this quarter, the market value of TRONs version of USDT was $58.94 billion, up 3% from $57.06 billion in the previous quarter. In addition, the USDT circulating on TRON accounted for about 51% of the total circulation of USDT, down 3% from the previous quarter.
The market capitalization of the other three stablecoins on TRON also increased in the third quarter. The market capitalization of USDD, the second largest stablecoin on TRON, increased from $729.9 million to $730.6 million, a month-on-month increase of 0.11%. USDD accounted for 1% of the market capitalization in the third quarter, a decrease of 3% from the previous quarter. TUSD had the most significant increase in market capitalization, from $89.1 million to $166.6 million, an increase of 87% from the previous quarter. USDJ ranked fourth with a market capitalization of $70.7 million, a 4% increase from $67.8 million in the previous quarter.
Transfer transaction volume is another important indicator for measuring the performance of stablecoins. This indicator counts the total value of all stablecoin transactions on the chain, not just stablecoin transactions processed by DEX smart contracts. In the third quarter, TRONs daily average USDT transfer transaction volume increased from US$13.86 billion to US$14.38 billion, a month-on-month increase of 4%.
Ecological growth
TRON continues to implement strategies to expand its ecosystem. In addition to focusing on stablecoins, it has also launched a $100 million AI development fund and continues to hold TRON hackathon events.
On July 25, the seventh season of the TRON Hackathon was officially launched, with a total prize pool of $650,000, including $500,000 in TRX and $150,000 in energy rewards, aiming to attract a large number of developers to join the TRON network. The seventh season has five major tracks: Web3, Artistry, DeFi, Builder, and Integration, encouraging participants to propose diverse blockchain solutions. Sponsors of the hackathon include Google Cloud, BitTorrent File System, Just Ecosystem Dapps, HTX DAO, SUN Ecosystem Dapps, and ApeNFT. This event will not only promote innovation in the TRON ecosystem, but also help discover and cultivate talents, and contribute to the long-term development of TRON.
On September 10, 2024, TRON, in partnership with Tether and TRM Labs, announced the establishment of the T 3 Financial Crime Unit (T 3 FCU) to address cryptocurrency-related criminal activities. This inter-enterprise action is intended to address growing concerns about illegal activities involving USDT on the TRON chain. With a market value of over $118 billion, more than half of which is in circulation on the TRON chain, strong security measures are urgently needed.
T3 FCU successfully cracked down on illegal activities discovered between July and September 2024. Since its establishment in July 2024, the team has frozen more than 12 million USDT fraud funds and helped at least 11 victims.
One of TRONs key plans for 2024 is to continue to enter the Bitcoin ecosystem. Justin Sun announced in the first quarter that TRON will launch a Bitcoin Layer 2 solution, aiming to allow the Bitcoin ecosystem to access TRONs stablecoin fund pool (a total of $59.97 billion as of the end of the third quarter) in a secure way. TRONs Bitcoin Layer 2 solution roadmap includes the following three parts:
1. Alpha phase - using cross-chain technology to integrate different TRON tokens into the Bitcoin ecosystem. TRON DAO Ventures also plans to invest in user-friendly wallets and tools to help users simplify their Bitcoin experience.
2. Beta phase - Establish extensive partnerships with other protocols and project teams to jointly create Bitcoin Layer 2 solutions. In this phase, TRON announced in February that it had reached a cooperation with Bitcoin Layer 2 project Merlin Chain, aiming to release new momentum for TRONs ecological growth through cross-chain capability building and new DeFi opportunities.
3. Phase γ - Building a Layer 2 solution that integrates TRON, BitTorrent, and Bitcoin networks. This is also the final stage of the roadmap.
Conclusion
During the third quarter, TRONs multiple indicators maintained positive growth. Thanks to the deflationary token model and increased network activity, TRXs circulating market value increased by 24% month-on-month, achieving growth for seven consecutive quarters. In addition, this quarter, TRONs average daily transaction volume increased by 14% month-on-month, and the number of daily active addresses increased by 6%. This quarter, TRONs DeFi sectors TVL increased by 4% month-on-month, ranking second in the entire network with $8.09 billion.
The launch of SunPump, the first meme launch platform on TRON, not only promoted a significant increase in DeFi transactions, but also drove DEX trading volume up 150% month-on-month. TRON stablecoins continued their outstanding performance, with USDT leading the way, accounting for 98% of the total market value of the networks stablecoins. Through the launch of various projects such as the TRON Hackathon Season 7, Bitcoin Layer 2 Solutions, and the T3 Anti-Financial Crime Team, TRONs ecosystem has also made great progress.
Full report:
https://messari.io/report/state-of-tron-q3-2024
