State of TRON Q4 2024

Key Insights

• TRON experienced positive growth across many key metrics in Q4, including a ~62.46% QoQ increase in market cap, reaching ~$21.94 billion, and an increase in QoQ revenue by ~34.81% to ~$740.29 million, an all-time high for the network.
• Partnerships with Bitget, Chainlink, and Mercado Bitcoin bolstered ecosystem growth in Q4. The launch of the MBRL stablecoin on TRON expands its presence in the Latin American market.
• DeFi activity on TRON showed mixed results in Q4, with DeFi TVL in USD decreasing by ~6.23% to ~$7.39 billion but retaining its position as the third-largest network by TVL. Daily DEX volume surged by ~135.12% QoQ, with SUN V3 accounting for ~78.98% of all volume.
• Technical upgrades from the TRON developer community in Q4 included Anaximander and Epicurus, which enhanced system performance and developer tools. TRON also increased network decentralization, with 423 Super Representative candidates (+4 QoQ) and 8,149 nodes distributed across 82 locations.
• Stablecoin usage remained strong, with USDT on TRON representing ~98.30% of the total stablecoin market cap, or $57.69 billion (decreasing ~2.11% QoQ). The average daily USDT transfer volume increased by ~28.18% QoQ, reaching ~$18.43 billion.

Primer

TRON (TRX) is a public, open-source blockchain network that relies on a Delegated-Proof-of-Stake (DPoS) mechanism. An election process is used to determine which validators participate in consensus. All TRX stakers vote onchain for the candidates they want to become Super Representatives (SRs). In each epoch, the top 27 most voted-for candidates become SRs within the active set and take turns producing blocks. A new election occurs every six hours.

The TRON Virtual Machine (TVM) powers applications on the network and uses “Energy” and “Bandwidth” instead of gas, like its Ethereum Virtual Machine (EVM) counterpart. Bandwidth is gas spent on transactions, whereas Energy is gas spent on smart contract calls. Energy and Bandwidth can be acquired by staking TRX or burning TRX to pay for the Energy/Bandwidth required to execute a smart contract call or transaction. The TVM is EVM-compatible and offers developers affordable and fast smart contract execution.

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Key MetricsFinancial OverviewMarket Cap and Revenue

TRX’s circulating market cap increased for the eighth consecutive quarter in Q4, up ~62.46% QoQ from ~$13.51 billion to $21.94 billion. Furthermore, TRX outperformed other large-cap cryptocurrencies as its market cap ranking amongst all tokens (excluding stablecoins) rose one spot from 9 to 8. Notably, as a deflationary token, TRX’s price increased by more than just the circulating market cap due to the decrease in its circulating supply.

TRON utilizes a resource model to execute transactions onchain. To summarize, the resource model is based on distributing Bandwidth and Energy to stakers. As long as stakers have acquired enough resources, they can use those resources to transfer tokens and execute smart contracts for free. Users must cover transaction fees with TRX if they utilize more computing power than their resources allow, all of which is burned. As such, revenues for TRON are derived from the TRX token burns coming from transaction fees.

TRON had another solid quarter for USD revenue. Total Revenue in USD was up ~34.81% QoQ from ~$549.13 million to ~$740.29 million. Due to the ~63.25% increase in token price in Q4, Total Revenue in TRX was down ~6.59% QoQ from ~$3.83 billion to ~$3.58 billion.

Supply Dynamics

The circulating supply of TRX is affected by two parameters: (i) tokens minted to reward stakers and block producers, and (ii) tokens burned due to network transaction fees. TRX rewards equate to ~5.06 million tokens being minted per day. As such, the circulating token supply will decrease over time if more than 5.06 million TRX are burned daily, on average.

In Q4, the circulating supply of TRX decreased from ~86.62 billion to ~86.20 billion. Annualized, this equates to an inflation rate of approximately -2.59%. Annualized inflation was down QoQ, decreasing ~19.76% from approximately -3.22%.

TRON incentivizes participants in its staking mechanism through a combination of the following:

• Block Reward - Super Representatives earn 16 TRX for each block produced (subject to change through onchain governance). After producing a block, the Super Representative’s chosen commission ratio is kept, while the remaining TRX is distributed amongst the representative’s associated voters.
• Vote Reward - The 28th to 127th most voted-for Super Representatives become Super Representative Partners for the next epoch. While partners do not participate in block production, they still receive voting rewards, as well as the TRX stakers that voted for said partners. For every block produced, 160 TRX is rewarded to Super Representatives and Super Representative Partners in proportion to their respective TRX stakers’ votes.

The annualized real yield for staking decreased in Q4, down ~10.67% QoQ from ~8.18% to ~7.31%. This decrease was due to less TRX being burned in Q4.

Network OverviewUsage

Q4 usage was mixed for TRON, with increases in some onchain activity metrics like daily transactions and daily active addresses, while others, like average daily new addresses and DeFi transactions, decreased. Average daily transactions increased ~7.19% QoQ from ~7.15 million to ~7.67 million, and average daily active addresses grew ~4.61% QoQ from ~2.12 million to ~2.22 million.

Average daily new addresses broke its upward trend and decreased in Q4, down ~6.95% QoQ from ~208,500 to ~194,050. Of Q4’s average daily active addresses, ~8.74% were new addresses.

The majority of transactions on TRON continue to come from wallet transfers and stablecoins. Wallet transfers were up ~6.02% QoQ from ~3.14 million to ~3.33 million, and stablecoin transfers were up ~6.49% QoQ from ~2.10 million to ~2.24 million. Collectively, wallet transfers and stablecoin transactions represented ~99.33% of Q4 transactions, up ~0.86% QoQ from ~98.48%.

The most impacted area in terms of market share was DeFi transactions. After high Q3 volume, SunPump has cooled off, and the lack of subsequent trading activity on SUN caused a sharp decrease in the category’s transactions, down ~71.77% QoQ from ~44,000 to ~12,420. Infrastructure-related transactions had a significant QoQ increase, up ~52.08% from ~966 to ~1,469.

Wallet transfers and stablecoins have historically dominated average daily active address activity on TRON. Q4 was no different, as an average of ~1.67 million addresses conducted a daily wallet transfer, up ~6.37% QoQ. Stablecoin transactions also increased by ~7.24% QoQ to ~670,030. Active addresses interacting with DeFi decreased by ~61.67% QoQ to ~2,570, while Infrastructure interactions increased by ~38.03% QoQ to ~536.

Security and Decentralization

TRON uses a Delegated Proof-of-Stake (DPoS) consensus mechanism and the Practical Byzantine Fault Tolerance (PBFT) consensus algorithm to secure the network. A DPoS election occurs every six hours, in which 27 Super Representatives (SRs) take turns producing blocks. Those wishing to run a TRON node can pay 9,999 TRX to become an SR candidate.

While there may be centralization concerns regarding only 27 SRs participating in securing the network, at the end of Q4, over 423 SR candidates (up from 419 in Q3) received votes. This increasing diversity of candidates helps mitigate centralization concerns and promotes a more distributed governance model, enhancing the network's resilience and security. The growing number of SR candidates should challenge the voting population to distribute votes. Additionally, no singular entity received over 10% of all votes. The entity with the most votes was Binance Staking, which received ~3.11 billion votes out of ~40.88 billion in the most recent election (~7.61% of all votes).

Although there may be some benefits to a democratic voting system for block production and a growing set of SR candidates, neither feature fully does away with centralization risks. Metrics such as the geographic diversity of nodes may also factor into a network’s level of centralization. At the end of Q4, there were 8,149 TRON nodes (up from 7,954 in Q3) distributed across 82 different geographic locations around the globe, with the highest concentration in Ireland (~20%). Too many nodes in the same location could jeopardize the health of a network due to geopolitical risks, regulations, and acts of nature, among other reasons.

Since introducing the new staking mechanism, Stake 2.0 (TIP-467), in April 2023, it has become the default for all new staking activity. Any TRX staked after April 2023 is automatically assigned to Stake 2.0, while TRX previously staked under Stake 1.0 remains valid and unaffected. Stake 2.0 implemented a new layer to separate low-frequency staking operations and high-frequency resource delegating operations. It also introduced resource re-delegating without unstaking and improved resource utilization.

Across both options, the staking ratio (the proportion of TRX’s total supply actively being staked) rose, increasing slightly to ~51% in Q4. Additionally, more users continued to switch to Stake 2.0 over 1.0 in Q4. Stake 2.0 ended the quarter with ~22.51 billion TRX staked (+9.67% QoQ), whereas Stake 1.0 finished with ~21.20 billion TRX staked (-0.92% QoQ). In sum, ~43.71 billion TRX were staked at the end of Q4, an increase of ~4.27% QoQ. Due to an increase in TRX’s price, total staked in USD was up ~71.44% QoQ from ~$6.56 billion to ~$11.25 billion. Compared to other PoS networks, TRON had the sixth-highest dollar value of funds staked by the end of Q4, maintaining its position from the prior quarter.

It is worth noting that to take over the network through a two-thirds attack, a malicious actor would need to control 18 of the 27 SRs, or essentially two-thirds of the total stake. At the end of Q4, this threshold was ~27.25 billion TRX (~$7.01 billion).

Bandwidth is the gas spent on transactions, while energy is the gas spent on contract calls. Users can stake TRX to acquire either resource accordingly:

• The amount of bandwidth obtained from an account’s stake = (the amount of TRX staked for obtaining bandwidth / the total amount of TRX staked for obtaining bandwidth in the whole network * 43.2 billion).
• The amount of energy obtained from an account’s stake = (the amount of TRX staked for obtaining energy / the total amount of TRX staked for obtaining energy in the whole network * 90.0 billion).

Notably, the amount staked for bandwidth is up ~1.52% QoQ from ~27.46 billion to ~27.88 billion. As for energy, staking increased ~9.47% QoQ from ~14.47 billion to ~15.84 billion, in part due to overall higher gas fees. The amount staked for each resource is correlated with consumption. Daily bandwidth consumption and energy consumption were down QoQ, ~8.59% and ~24.61%, respectively.

Technical Developments

In Q4, TRON passed one proposal to modify the energy limit, and the TRON developer community released two network upgrades.

• Proposal 97 (Oct 03) - Modified the total Energy limit to 180000000000 Energy. This was approved by 21 of the 27 Super Representatives.
• Anaximander Upgrade (Oct 05) - The TRON developer community released GreatVoyage-v4.7.6 (Anaximander), a non-mandatory upgrade aimed at enhancing system performance, network robustness, and monitoring capabilities. Key updates include improved node synchronization stability, expanded metrics for TCP/UDP traffic, refined HTTP request monitoring, and a new disconnection strategy to prevent node isolation.
• Epicurus Upgrade (Dec 15) - The TRON developer community successfully initiated the v4.7.7 (Epicurus) upgrade on Dec. 15, 2024, following its release earlier in the month. Key changes include enhanced computational consistency with java.lang.StrictMath, improved event subscription logic, support for graceful node shutdowns, and more accurate duration metrics via gRPC interface updates.

Ecosystem OverviewDeFi

DeFi TVL on TRON denominated in TRX fell ~42.56% QoQ from ~50.52 billion to ~29.02 billion. However, TVL denominated in USD was not hit as hard due to an increase in TRX’s price, down only ~6.23% QoQ from ~$7.88 billion to ~$7.39 billion. Compared to other networks, TRON dropped to the third-highest network by TVL, beating out fourth-place BNB Smart Chain (~$5.41 billion) by ~$2.25 billion. The large spike in DeFi TVL, in terms of USD in Q4, was due to a sudden rise in TRX’s price.

The top three protocols by TVL on TRON are JustLend, SUN, and JustStables.

JustLend, the largest protocol by TVL, saw its TVL increase ~5.55% QoQ from ~$5.75 billion to ~$5.96 billion. Total borrow volume on JustLend increased from ~$101.3 million to ~$134.62 million (+32.89% QoQ), perhaps signaling a greater appetite for leverage on TRON.

SUN significantly increased its TVL, up ~23.94% QoQ from ~$755.40 million to ~$936.23 million. SUN consists of three different AMMs (V1, V2, and V3). By the end of Q4, V1 TVL was ~$482.04 million (~51.49% of TVL), V2 TVL was ~$261.36 million (~18.87% of TVL), and V3 TVL was ~$187.62 million (~16.69% of TVL).

In sum, JustLend, SUN, and JustStables represented over 99% of DeFi TVL on TRON.

DEX Volume

Overall DEX activity on TRON continued to increase in Q4, with average daily DEX volumes increasing ~135.12% QoQ. Zooming in on SunPump, its slowdown is most evident through the decrease in volume routed through SUN V2, which hosts liquidity pools for bonded memecoins from SunPump. The average daily DEX volume on SUN V2 was down ~35.05% QoQ.

Essentially all DEX volumes on TRON occur on SUN. In June 2023, SUN introduced a concentrated liquidity (CL) AMM to its product suite (SunSwap V3). Q1’24 marked the first time since SunSwap V3’s introduction that the majority of volume on SUN was routed through the V3 AMM. SUN V3 accounts for 78.98% of all volume on TRON.

Stablecoins

The stablecoin market cap on TRON has been steadily trending up over the past year, with Q4 breaking that trend with a slight decrease. Stablecoin market cap decreased by ~2.55% QoQ from ~$59.97 billion to ~$58.70 billion. USDT accounts for the vast majority of stablecoins on TRON, boasting a market share of ~98.30% (+0.02% QoQ). The market cap of USDT on TRON ended the quarter at ~$57.69 billion (-2.11% QoQ). Additionally, ~42.48% of all USDT in circulation is on TRON.

Two other stablecoins on TRON had QoQ increases in Q4. The second largest stablecoin on TRON, USDD, was up ~2.31% QoQ from ~$730.60 million to ~$747.43 million. USDD’s market share also increased by ~0.27% QoQ to ~1.27%.

Another useful metric for evaluating stablecoins is transfer volume. This metric measures the dollar value of stablecoins moving onchain, not just when interacting with DEX-based smart contracts. The average daily USDT onchain transfer volume maintained its upward growth in Q4, increasing by ~28.18% QoQ from ~$14.38 billion to ~$18.43 billion.

Ecosystem Growth

TRON continues to partner with leading companies in the blockchain space. A few notable partnerships and ecosystem upgrades that were announced in Q4 included:

• Bitget Partnership: Bitget has announced a strategic partnership with TRON, including the acquisition of $10 million worth of TRX. The collaboration aims to enhance blockchain adoption, leverage TRON’s infrastructure for innovative projects, and strengthen Bitget’s position in the Web3 ecosystem.
• SushiSwap: The Sushi team launched SushiSwap on Tron.
• World Liberty Financial (WLF): The TRON team announced a $30 million investment into WLF.
• Chainlink: The TRON team announced that they have joined the Chainlink Scale Program. TRON will be adopting Chainlink Data Feeds as their official Oracle solution. There is no exact timeline for this integration, but once integrated, TRON will discontinue support and reliance on WINkLink, their existing Oracle solution.
• TRON-Peg USD Coin: TRON DAO has launched TRON-Peg USD Coin on the TRON blockchain to streamline cross-chain transactions between Ethereum and TRON. The system ensures transparency with real-time reserve tracking, 1:1 USDC redemption, and free cross-chain transfers and is audited by ChainSecurity for reliability.
• Mercado Bitcoin launches MBRL stablecoin: Mercado Bitcoin has launched the MBRL stablecoin on the TRON blockchain, pegged to the Brazilian Real, to provide faster and more cost-effective transactions for its users. This partnership aims to enhance financial inclusion and expand TRON’s presence in the Latin American market by leveraging blockchain technology for stablecoin adoption.

TRON continues implementing strategies to grow its ecosystem beyond stablecoins, with initiatives such as the TRON DAO Grants Program, a $100 million AI development fund, and the TRON Grand Hackathon seasons.

On July 25, 2024, TRON launched HackaTRON Season 7, and on Nov 19, 2024, the winners were announced. The hackathon offered a prize pool of $650,000, including $500,000 in TRX and $150,000 in energy prizes. Over 1,300 individuals participated and 25+ teams were awarded prizes. Season 7 featured five competition tracks: Web3, Artistry, DeFi, Builder, and Integration, encouraging diverse blockchain solutions. Sponsors for the hackathon included Google Cloud, BitTorrent File System, Just Ecosystem Dapps, HTX DAO, SUN Ecosystem Dapps, and ApeNFT. TRON is now gearing up for Season 8 to help the next group of builders.

In 2025, TRON will focus on enhancing network performance and scalability through initiatives like API performance optimization, support for ARM architecture, and parallel transaction execution. Economic model improvements, such as dynamic transaction fee adjustments, aim to strengthen the ecosystem’s sustainability. Long-term, TRON plans to explore other areas like account abstraction, and state data expiration to ensure robust infrastructure and future adaptability.

Closing Summary

In Q4, TRON sustained its performance across most key metrics, with TRX’s circulating market cap surging ~62.46% QoQ to ~$21.94 billion, marking eight consecutive quarters of growth. This achievement was driven by TRON’s deflationary token model, which saw the circulating supply decrease by ~0.42 billion TRX (-2.59% annualized), and strong network activity, including a ~7.19% QoQ increase in daily transactions and a ~4.61% rise in daily active addresses. The network’s staking ratio rose slightly to ~50%, with Stake 2.0 adoption increasing by ~9.67% QoQ.

Despite a ~6.23% decline in DeFi TVL (USD) to ~$7.39 billion, TRON maintained its position as the third-largest network by TVL. Notable ecosystem developments included increased TVL in key protocols like SUN (+23.94% QoQ) and JustLend (+5.55% QoQ) and a ~135.12% QoQ spike in average daily DEX volumes, with SUN V3 emerging as the dominant AMM.

Stablecoin activity remained a cornerstone of TRON’s ecosystem, with USDT accounting for ~98.30% of stablecoin supply and average daily USDT transfer volumes up ~28.18% QoQ to ~$18.43 billion. TRON further expanded its ecosystem through strategic partnerships with Bitget, Chainlink, and Mercado Bitcoin, alongside initiatives like HackaTRON Season 7, which attracted over 1,300 participants and awarded $650,000 in prizes.

Looking ahead, TRON’s 2025 roadmap, coupled with initiatives like the $100 million AI development fund and the upcoming HackaTRON Season 8, positions the network for sustained innovation and ecosystem expansion.