TRON Guide: Understanding the Entertainment-Focused Blockchain

TRON aims to transform how digital content creators connect with their audiences by removing middlemen from the entertainment industry. This guide explains how TRON's blockchain works, the role of its TRX cryptocurrency, and how you can trade it on LeveX.

What is TRON (TRX)?

TRON is a blockchain platform designed to decentralize the entertainment industry. Founded in 2017 by Justin Sun, TRON aims to eliminate the intermediaries between content creators and their audiences, allowing artists, musicians, and other digital creators to receive direct compensation for their work without platforms taking large cuts of their earnings.

At the center of the TRON ecosystem is its native cryptocurrency, TRX (sometimes called Tronix). This digital token serves multiple purposes within the network – it's used to pay for content, power applications, and participate in the platform's governance.

TRON was created to address a fundamental problem in the digital content world: when you buy or stream content through traditional platforms like YouTube, Spotify, or app stores, those companies typically take 30% or more of the revenue. TRON's vision is to create a more equitable system where creators receive a larger share of the value they generate.

The platform supports the development of decentralized applications (dApps) that range from games to social media platforms, all running on TRON's blockchain. With the ability to process up to 2,000 transactions per second, TRON offers much faster performance than older blockchains like Bitcoin or Ethereum, making it more suitable for applications that require frequent microtransactions.

The History of TRON

TRON's development has been marked by rapid growth, strategic acquisitions, and occasional controversy – all contributing to its unique position in the blockchain landscape.

Foundation and Early Development

Justin Sun, a former representative for Ripple in China and protégé of Alibaba founder Jack Ma, established the TRON Foundation in Singapore in 2017. The project launched with ambitious goals to "decentralize the web" and create an entertainment ecosystem free from corporate control.

TRON initially raised funds through an Initial Coin Offering (ICO) in 2017, with TRX tokens originally issued on the Ethereum blockchain as ERC-20 tokens. This early funding helped the project build momentum and attract developers to its vision.

Launch and Expansion

In May 2018, TRON made a significant move by migrating from Ethereum to its own independent blockchain, known as the TRON mainnet. This transition represented a major technical milestone, allowing TRON to implement its own consensus mechanism and governance structure.

Shortly after launching its mainnet, TRON made headlines by acquiring BitTorrent for $140 million in July 2018. As one of the world's largest file-sharing platforms with over 100 million users, BitTorrent brought significant technological assets and user base to the TRON ecosystem.

The acquisition aligned with TRON's content distribution vision, as BitTorrent had already pioneered peer-to-peer file sharing – a precursor to the decentralized content distribution TRON aimed to create.

Growth and Development

Between 2019 and 2023, TRON experienced substantial growth in user adoption and application development:

The platform expanded beyond its initial focus on entertainment to support a wider range of applications, including decentralized finance (DeFi) services, non-fungible tokens (NFTs), and stablecoins.

In 2020, TRON integrated Djed (later renamed JUST), a platform for stablecoins and lending, expanding its financial capabilities.

By 2023, TRON had amassed approximately 180 million accounts on its blockchain, demonstrating significant user adoption. The network also became a major player in the stablecoin market, hosting billions in USDT (Tether) and other stablecoins.

Throughout its history, TRON has been both praised for its technological achievements and criticized for alleged centralization and similarities to other blockchain projects. Regardless of these debates, TRON has established itself as one of the larger blockchain ecosystems outside of Bitcoin and Ethereum.

How TRON Works

TRON's blockchain architecture focuses on scalability and applications, with several key components working together to create its ecosystem.

Blockchain Architecture

TRON's blockchain is built using a three-layer architecture:

Core Layer: The bottom layer handles basic functions like storage and computation. It includes the consensus mechanism that secures the network and validates transactions.

Application Layer: The middle layer contains the smart contracts and business logic that power applications built on TRON.

User Interface Layer: The top layer provides tools for developers to create user-friendly applications and for users to interact with the blockchain.

This structure allows TRON to process transactions more efficiently than many other blockchains, with block times of just 3 seconds compared to Bitcoin's 10 minutes or Ethereum's 15 seconds (pre-upgrades).

Consensus Mechanism

TRON uses a consensus system called Delegated Proof of Stake (DPoS), which works quite differently from Bitcoin's energy-intensive Proof of Work:

1. TRX holders vote for "Super Representatives" who validate transactions and create blocks
2. Only 27 Super Representatives are active at any time, elected by the community
3. These validators take turns producing blocks rather than competing through mining
4. This approach allows for faster transaction processing while maintaining security

The DPoS system makes TRON more energy-efficient than proof-of-work blockchains while still maintaining decentralization through the voting mechanism.

Smart Contracts and Applications

TRON supports smart contracts written in Solidity (the same language used by Ethereum), making it relatively easy for developers familiar with Ethereum to build on TRON. These smart contracts enable a wide range of applications:

• Content distribution platforms where creators receive direct payment
• Decentralized exchanges for trading tokens
• Gaming applications with digital assets
• Social media platforms free from centralized control
• Financial services like lending and staking

These applications use TRX for various functions, from paying transaction fees to accessing services.

TRX Tokenomics

Understanding how TRX is distributed and used provides insight into TRON's economic model and potential value.

Supply and Distribution

TRX has a fixed maximum supply of 100 billion tokens, with approximately 71.6 billion currently in circulation. The initial distribution of TRX tokens was structured as follows:

• 40% (40 billion) allocated to public ICO participants
• 15% (15.75 billion) allocated to private investors
• 34% (34 billion) allocated to the TRON Foundation
• 10% (10 billion) allocated to a company owned by founder Justin Sun

Unlike Bitcoin and some other cryptocurrencies that continuously create new coins through mining, all TRX tokens were created at launch. This means there's no ongoing inflation in the token supply, though the rate at which reserved tokens enter circulation can affect market dynamics.

The distribution has been a point of discussion within the cryptocurrency community, as a relatively large percentage was allocated to the founder and foundation compared to some other projects.

TRX Utility in the Ecosystem

TRX serves several essential functions within the TRON network:

Transaction Fees: While TRON advertises "free transactions," users actually receive a daily bandwidth allowance based on their TRX holdings. This typically covers normal usage, making transactions effectively free for most users.

Resource Management: TRON uses a resource model where holding TRX gives users bandwidth and energy needed to interact with smart contracts and perform transactions.

Governance Participation: TRX holders can vote for Super Representatives, giving them a say in who validates transactions and maintains the network.

Content Purchases: Users can pay content creators directly using TRX for digital content, ranging from music to articles to videos.

Application Access: Many dApps built on TRON require TRX for various functions, from gaming to financial services.

These use cases create ongoing demand for TRX beyond speculative trading, tying the token's value to the utility and growth of the TRON ecosystem.

Real-World Applications of TRON

TRON's blockchain has found application in several areas, with its high throughput and low fees making it particularly suitable for content-related transactions.

Digital Content Distribution

Content distribution remains TRON's primary focus, with several projects working to create alternatives to centralized platforms:

DLive: A blockchain-based streaming platform where content creators receive direct payment from viewers without the platform taking a large cut.

BitTorrent File System: An extension of the BitTorrent protocol that allows for decentralized file storage and sharing with built-in incentives.

TRON-based social media applications: Several social platforms built on TRON allow users to monetize their content directly rather than having a company profit from their data.

These applications demonstrate TRON's potential to reshape how digital content is monetized and distributed.

Decentralized Finance (DeFi)

TRON has expanded significantly into financial applications, hosting various DeFi services:

JustLend: A lending platform where users can earn interest by providing liquidity or borrow assets by posting collateral.

SUN: A TRON-based token designed for governance of the platform's DeFi ecosystem.

Stablecoins: TRON hosts several stablecoins, including USDT (Tether), with billions in value circulating on its blockchain. These provide stability for transactions and financial applications.

The migration of stablecoins to TRON has been particularly successful, as users seek alternatives to Ethereum's sometimes high transaction fees for financial operations.

Gaming and Entertainment

TRON's focus on entertainment extends to blockchain gaming:

WINk: A gaming platform on TRON that offers various gambling and skill-based games.

Various NFT projects: TRON supports non-fungible tokens that represent unique digital assets like artwork, collectibles, and in-game items.

These gaming applications benefit from TRON's fast transactions and low fees, which allow for smoother gameplay and microtransactions.

Trading TRX on LeveX

LeveX offers multiple ways to trade TRX based on your experience level and strategy:

Spot Trading

Spot trading allows you to buy and hold actual TRX tokens. This approach is suitable if you:

• Want to own the underlying asset
• Are interested in TRX's long-term potential
• Prefer straightforward buy/sell trading

Perpetual Contracts

Perpetual contracts let you trade TRX price movements with leverage without owning the actual tokens. These derivatives offer:

• Leverage of up to 100x to amplify potential returns
• Ability to profit from both rising and falling prices
• No need to manage wallet security or storage

LeveX provides competitive fees and an intuitive interface for both trading options, making it easy to incorporate TRX into your trading strategy.

Advantages and Challenges

TRON's Strengths

High Performance: With 2,000 transactions per second and 3-second block times, TRON outperforms many older blockchains in raw throughput.

Low Transaction Costs: The bandwidth allocation system makes transactions effectively free for most users, removing a significant barrier to adoption.

Established Ecosystem: With millions of accounts and a diverse range of applications, TRON has achieved meaningful adoption and usage.

Strategic Acquisitions: The BitTorrent acquisition brought technology and users that align perfectly with TRON's content distribution vision.

Challenges to Consider

Centralization Concerns: Critics argue that with only 27 Super Representatives and significant token concentration, TRON may not be as decentralized as other blockchains.

Competitive Landscape: TRON faces competition from both established platforms like Ethereum and newer blockchains specifically designed for content or entertainment.

Regulatory Uncertainty: Like many blockchain projects, TRON operates in an evolving regulatory environment that could impact its operations and token value.

Similarity Controversies: TRON has faced criticism that parts of its whitepaper and codebase were similar to other projects, raising questions about its originality.

Getting Started with TRON

Whether you're interested in trading TRX for potential returns or exploring the TRON ecosystem's applications, understanding this entertainment-focused blockchain provides insight into how blockchain technology can disrupt traditional content distribution models.

For traders, creating a LeveX account gives you access to both spot trading and leveraged perpetuals for TRX, with competitive fees and an intuitive interface.

If you're new to cryptocurrencies, our Help Center provides resources to help you understand trading basics and platform features. For more information about other cryptocurrencies, check out our Crypto in a Minute series.