Making a crypto a reserve of stable value is a particular sore point for cryptocurrencies. While most projects remain true to the principles of decentralization, TRON (TRX) has developed its own model to keep the price under control. This is an interesting case study for the emerging field of tokenomics.
Crypto is – with exceptions – an entity or a decentralized and stateless resource. Its value is determined by the market; no central bank or institution is a guarantor.
TRON governs itself through the consent of its members. This is achieved at different levels and the consensus is needed by the non-profit TRON Foundation, elected "super" representatives, as well as active members of the TRON community.
This allows decision-making to remain decentralized but at the same time effective. Although the effective availability of money is determined through automated mechanisms, the long-term development of the ecosystem, which influences the TRX price, remains in the hands of the community.
The TRON network uses monetary mechanisms similar to those used by a central bank. Rather than leaving the TRX tokens at the mercy of the markets, it can add and remove the TRX offer to keep the price at a constant level.
The TRX offer is dynamically adjusted, with more advanced emission mechanisms and tokens. So inflation and deflation of the tokenomia are determined by the dynamic adjustment in the market.
TRON and Tokenomics
TRX has been adopted by several encryption points; five payment modules have started accepting TRX tokens only in August. Although used primarily to pay for network transaction costs, using it as a daily payment method could radically change the token price range.
An opportunity for wealth for the lucky speculator, the volatility of the crypt makes it a bad value. It can become volatile during periods of market disruption: the total market capitalization has increased by 400% following an inflow of new investors in the second half of 2017.
The price of a currency – fiat or encryption – that varies widely from day to day day prevents it from becoming a popular form of exchange. In Venezuela, the bolivar decreased by 99.9% in two years; restaurants have stopped printing prices on the menus. Citizens have moved to other, more stable, means of exchange: parking assistants accept baguettes as acceptable payments and taxi drivers will take you anywhere for a cigarette carton.
TRON's mission has expanded since it was launched in September 2017. Originally designed as a decentralized entertainment platform, Justin Sun, project leader, presents it as a viable alternative platform dApp for Ethereum (ETH).
"Platforms like Ethereum are no longer able to meet the needs of developers and the acquisition of users is not" expanding as expected, causing a bottleneck for the development of blockchain technology, " TRON spokesman said Crypto Briefing.
TRON confirmed that it had purchased the video sharing platform, BitTorrent, at the end of July Sun plans that BitTorrent becomes a part of # 39; TRX ecosystem.
There has been some discussion about how decentralized the TRON consensus mechanism is … Some pointed out that it seemed too easy for Justin Sun to become one of the first elected super-representatives. The only public figure of TRON, could also have a significant influence on the community, questioning how truly democratic the network is.
However, the based on the consensus of TRON could help to introduce stability in a very turbulent activity class; the network could even become a decentralized central bank.
If it works, Sun et al. would have performed some TRX patients in the world of tokenomics.
The author is invested in ETH, which is mentioned in this article.