TRON (TRX) –To commemorate the TRON Independence Day on June 25 (the official start of the Main Net genesis block), the TRON Foundation is planning a burning of coins of 1 billion TRX, worth almost $ 50 million. As the press release states, the burn will constitute the greatest destruction of money in human history. In addition, the TRX 33 billion combined funds of founder Justin Sun and the TRON Foundation will be placed in a blocked account until the beginning of 2020, which further negates the gossip of Sun selling its primary stake in early January.
The amount of TRX at the start of the mainnet launch will be reduced to 99,000,000,000 TX, while the remaining 33,251,807,524 TRX held by the TRON foundation will remain blocked until January 1, 2020.
While TRON is no stranger to marketing acrobatics, the billion TRX tokens have a much broader purpose. In addition to increasing the individual value of each token, the burn will have a systemic effect on investors' attitudes towards TRON.
Installation of a sense of scarcity
The 100 billion coins have found themselves in a difficult situation. Regardless of the intrinsic divisibility of cryptocurrencies, high-supply coins offer greater liquidity in the market, which is an advantage for both speculators and coin users. It also keeps the price for low money, which, from the point of view of a buyer, provides a certain psychological distance from the intimidating price of Bitcoin (the average unencrypted investor will see the high price of BTC as an all-encompassing barrier). entrance).
However, the high supply of coins also denies the feeling of scarcity that probably drove the price of Bitcoin and Ethereum so high compared to the previous year. Fear of Missing Out is a strong and enabling force for Bitcoin investors, meaning that BTC has a relatively small circulating supply (which also increases the danger of controversial heavy forks).
Burning 1 billion TRX (which equals to 1% of the total circulating currency), Justin Sun and the TRON Foundation are reporting to investors who are committed to increasing the intrinsic value of the currency. The immediate consequence of coin revenue is not to determine a 1% price increase, but to offer long-term financial leverage to the investment base and to provide a touch of the aforementioned shortage that has proven itself. precious for low-supply coins. In fact, the TRON Foundation is fiery 50 million dollars they have control now to foster the interest of the currency as a whole in the future. This move is added to Genesis Project, a $ 2 billion resource fund to grow the development of main and TRX based applications. The TRON team has shown that it is willing to give up immediate profit in an attempt to increase long-term value, which is a sentiment that investors can easily recognize.
Catering for the needs of investors (and any users)
The TRON Foundation has discovered the game of marketing related to cryptocurrency: almost all the currencies on the market, even Bitcoin (in the absence of Lightning Network), are not ready for the type of adoption necessary for real usability. This does not mean that currencies do not have a potential in the world of digital markets and the development of fintech – they are not just at the point of feasibility. The rush to the bull last January, when the average BTC transaction fees exceeded 55 USD, has shown that cryptocurrency has a long way to go before reaching the scale required for market saturation.
TRON is targeting investor needs now, in an effort to attract more attention to the currency and build the basis for its user base. The honest truth is that there are few reasons for owning TRX (or almost all currencies), outside of what it offers through price speculation at this time. This will change dramatically with the development of the Main Net platform and the integration of crypto in IoT devices and smartphone app marketplaces. The TRON Foundation is anticipating the war on the growing user base by creating a fervent and committed investment base. Yes, investors raise the price of the currency that directly benefits the TRON Foundation and Justin Sun's holdings. But it also maintains the currency in the market and media headlines, as well as encouraging current owners to refrain from selling their TRX. Despite the massive fall in value of cryptocurrency over the last six months, there is no hesitation in selling TRON if TRX continues to decline in availability. While markets rarely behave rationally, billions of billions burns attract investors' attention and give TRON a small degree of appreciation that has been largely deficient since its release.
Some will continue to see coins burned as another gimmick that attracts attention and publicity from the TRON Foundation to keep the relevant currency in the news cycle. After all, even with the destruction of a billion tokens, Sun and the TRON team command over 33 billion TRXs (worth $ 1.4 billion). However, keep in mind that the company is active destructive Currency of 50 million dollars. Although the burn is a calculated attempt to raise awareness on TRON, the cost to developers of the cryptocurrency is still at a personal cost. Instead, the coin token of TRON is favoring the interaction between the TRX team and the growing investment base. Unlike most transactional currencies, TRON relies on its growing user base to develop and participate in the core network, thereby increasing the overall value of the technology.
An investment of 50 million dollars today could bring billions in return if the TRON team manages to establish a digital platform to compete with other media networks.