TRX Outperforms Despite Declining Trust in Tron Network Amid Justin Sun’s Maneuvers
Summary:
In June 2024, TRX, the primary token of the Tron network, saw a 9.5% boost, outperforming competitors SOL and ETH. Tron's founder, Justin Sun reportedly transferred $21.4 million in TRX to a Binance deposit address amid this rise, leading to skepticism about the stability of the price surge. The Tron ecosystem is also under scrutiny as its total value locked significantly dropped recently, indicating major investors' possible withdrawal. Furthermore, concerns are raised due to significant deposits related to a single application, JustLend. Despite these uncertainties, TRX has thus far remarkably outperformed its competitors, but its future performance remains questionable.
In June, TRX, the Tron network's prime token, saw an increase of 9.5%, significantly surpassing competitors Solana (SOL) and Ether (ETH), both of which fell by 9% and 11% concurrently. Interestingly, this surge in TRX aligns with Justin Sun, the founder of Tron, shifting over $21 million of TRX to Binance, prompting traders to ponder the resilience of the TRX rally above $0.12.
Information from Arkham Intelligence unveils that on June 27, Justin Sun transferred 173.8 million TRX worth $21.4 million to a Binance deposit address. As per DefiLlama, Tron's total value locked (TVL) sunk to a half-year low of $7.5 billion on June 26, implying major investors are retracting funds from the ecosystem even amid the TRX price surge.
Alarmingly, one single decentralized application, JustLend, holds 75% of the network's total deposits, experiencing a 15% asset cutback over a month. Close scrutiny breeds doubt regarding the endurance of Tron's ecosystem, especially considering a whopping 94% of JustLend's deposits are in BTCT, a TRC-20 token allegedly equivalent to a Bitcoin (BTC) position.
Exponential.fi’s data reveals that the $5.3 billion in BTCT deposits at JustLend yield 0%, suggesting the principal beneficiary of these assets possibly profiting indirectly. Exponential.fi also highlighted JustLend’s BTC pool as having weak fundamentals due to high "collateral risk" and "high centralization” of network validators. They caution about potential total loss of investment due to inherent chain issues.
Despite the TRX token price trend not aligning with Tron network's growth, none of its DApps are listed in the global protocols by fee rankings. Ethereum leads the ecosystem with Solana, housing prominent applications such as Raydium, Jito, and Marinade. Tron, although experiencing multibillion-dollar volumes in USD Tether (USDT), faced challenges with other stablecoin providers, including US-based Circle.
Following trust, safety, and transparency issues Circle, the issuer of the second-largest stablecoin, USD Coin (USDC), discontinued support for its TRC-20 version on February 20. On March 25, Binance, a major crypto exchange, also ceased support for USDC on the TRC-20 network. These actions further dented investor faith in Tron's ecosystem, even as the TRX price seems unaffected.
In April 2024, the SEC reaffirmed allegations in its original lawsuit that Justin Sun and his firms sold unregistered securities via Tron and BitTorrent tokens and accused Sun of engaging in "manipulative wash trading."
Despite TRX outperforming SOL and ETH by nearly 20% over 30 days, whilst Tron's network TVL drops and wallets linked to Justin Sun appear to be selling, TRX's chances to sustain the $0.12 support level seem questionable. This piece does not include investment advice or suggestions. Every investment or trade involves risk, and readers should perform adequate research before making a decision.
Published At
6/27/2024 9:49:16 PM
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