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How TRON (TRX) Will Profit From Coin Burn

TRON (TRX)–To commemorate TRON’s Independence Day on June 25th (the official start of Main Net’s genesis block), the TRON Foundation is planning a coin burn of 1 billion TRX, worth nearly 50 million USD. As the press release states, the burn will constitute the largest destruction of money in human history. In addition, the 33 billion TRX combined fund of founder Justin Sun and the TRON Foundation will be placed in a locked account until the start of 2020, which further negates the rumor of Sun selling his primary holding in early January.

The amount of TRX at the beginning of mainnet launch will be reduced to 99,000,000,000TRX, and the remaining 33,251,807,524 TRX held by TRON foundation will stay locked until January 1th, 2020.

While TRON is no stranger to marketing stunts, the one billion TRX coin burn has a much larger purpose. In addition to increasing the individual value of each token, the burn will have a systemic effect on investor attitudes towards TRON.

Installing a Sense of Scarcity

The 100 billion coin supply currencies have found themselves in a bit of a predicament. Regardless of the inherent divisibility of cryptocurrencies, high supply coins offer greater market liquidity, which is a benefit to both exchange speculators and users of the coin. It also keeps the price-per-coin low, which, from a buyer’s standpoint, provides some psychological distance from the intimidating price of Bitcoin (the average, non-crypto investor will see BTC’s elevated price as a barrier to entry).

However, the high coin supply also negates the feeling of scarcity that has arguably driven the price of Bitcoin and Ethereum so high over the preceding year. Fear of Missing Out is a strong, enabling force for Bitcoin investors, in the sense that BTC has a relatively small circulating supply (which also increase the danger of contentious hard forks).

By burning 1 billion TRX (which amounts to 1% of the total circulating supply of the coin), Justin Sun and the TRON Foundation are signaling to investors that they are committed to raising the intrinsic value of the currency. The immediate aftermath of the coin burn is not to bring about a 1% increase in price, but to offer long-term leverage to the investment base, and to provide a touch of the aforementioned scarcity that has proven valuable to low-supply coins. In effect, the TRON Foundation is burning 50 million USD they have control over now to further the interest of the currency as a whole in the future. This move comes in addition to Project Genesis, a 2 billion USD resource fund to grow the development of Main Net and TRX-based applications. The TRON team has proven they are willing to forgo immediate profit in an effort to raise long-term value, which is a sentiment investors can easily recognize. 

Catering to the Needs of Investors (and Eventual Users)

The TRON Foundation has figured out the game of cryptocurrency-related marketing: almost all of 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. That’s not to say the currencies don’t have potential in the world of digital marketplaces and fintech development–they are just not at the point of feasibility. This past January’s bull run, when average BTC transaction fees jumped above 55 USD, proved that cryptocurrency has a long way to go before achieving the scale necessary for market saturation.

TRON is targeting the needs of investors now, in an effort to draw greater attention to the currency and build the foundation for its user base. The honest truth is there is little reason to own TRX (or almost any currency), outside of what it offers through price speculation–at this point in time. That will drastically change with the development of the Main Net platform and the integration of crypto into IoT devices and smartphone app marketplaces. The TRON Foundation is getting ahead of the war for growing user bases by building a fervent and committed investment base. Yes, investors drive up the price of the currency which directly benefits the TRON Foundation and Justin Sun’s holdings. But it also keeps the currency in market spotlights and media headlines, in addition to giving incentive to current holders to refrain from selling their TRX. Despite the massive fall in value for cryptocurrency over the last six months, there is a hesitancy to sell TRON if TRX continues to decrease in availability. While markets rarely behave in a rational nature, coin burns on the scale of billions do grab the attention of investors and give TRON a small degree of appreciation that has largely been lacking since its release.

Some will continue to view the coin burn as another attention-grabbing, publicity gimmick by the TRON Foundation to keep the currency relevant in the news cycle. After all, even with the destruction of one billion tokens, Sun and the TRON team command over 33 billion TRX (worth 1.4 billion USD). However, keep in mind the company is actively destroying 50 million dollars worth of currency. Even if the burn is a calculated attempt to raise awareness for TRON, it still comes at a personal cost to the developers of cryptocurrency. Instead, TRON’s coin burn is furthering the interaction between the team behind TRX and the growing investment base. As opposed to most transactional currencies, TRON is relying upon its growing user base to both develop and participate on Main Net, thereby increasing the overall value of the technology.

A 50 million USD investment today could bring billions in return if the TRON team can manage to establish a digital platform to rival other media networks.

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TRON Will Burn 50M USD Worth of TRX to Celebrate Independence

Justin Sun is familiar with major announcements, and when it comes to his blockchain, he never has enough. A few hours ago, on the official Tron Foundation blog, Mr. Sun disclosed a series of events they were preparing to commemorate Tron’s Independence Day.

Perhaps the most important of all is that of a coin burn of 10 Million Tronix, which would be equivalent to approximately 50 million dollars according to current figures.

Typically when a coin burn happens, the effect on the market is bullish. The decrease in available tokens increases the value of each unit in the market, and thus the currency is revalued.

According to the Tron Foundation, “This may set the record for the most amount of money destroyed in human history in celebration of a historic moment.”

Previously, Justin Sun had made other important announcements to promote his crypto after moving from ERC-20 tokens running on Ethereum’s blockchain to units within an autonomous blockchain.

Of all, the most important and famous were the famous airdrops. Events in which tokens were delivered to users without the need for them to have traded or mined them.

Another important point they mentioned was that after the burn,Tron Foundation would continue to maintain a significant number of “locked” tokens. This avoids an inflationary process for the currency and protects the value of each Tronix unit to some extent:

The amount of TRX at the beginning of mainnet launch will be reduced to 99,000,000,000,000TRX, and the remaining 33,251,807,524 TRX held by TRON foundation will stay locked until January 1th, 2020.

To ensure the transparency of the process, he explained that Tron’s mainnet launch process would consist of 4 essential phases:

  1. Preparation: A preliminary stage that would last from June 18th to June 23rd in which the necessary arrangements for the launch would be made. Of these, one of the most significant is the election of the Tron’s Genesis Representatives who would participate in the mainnet launch.
  2. Guardian Phase: Phase that would last a full day, scheduled for June 24th
  3. Genesis Phase: A phase that would begin on June 25th and last as long as necessary to create the genesis block and reach an agreement to replace the 27 Genesis Representatives with Super Representatives
  4. Constitutional Phase: In which the independent mainnet of Tron would be launched with an official migration of the ERC20 tokens.

This would be the culmination of all the work of research, development, promotion, and implementation that the team of developers and users of Tron carried out since Tron’s inception.

“TRON will officially become a free, autonomous, and self-governed decentralized protocol with robust community consensus.”

Another significant event for those in the San Francisco area will be the TRON Independence Day Party, where users and developers can meet and share their experiences and expectations.

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With Super Representatives, Tron (TRX) Coin Burn Could Materialize

Tweeter user @WLFOFMYST has this incredible Tron (TRX) theory of having a coin burn possible through the ongoing Super Representatives nominations, and later elections, on the 26th of June.

In the tweet @WLFOFMYST suggests the following about Super Representation on the Tron Network.

“This is too important not to share right now. My head IMMEDIATELY went to one thing after reading this. COIN BURN. Justin wants the power in the people’s hands as he clearly states. What do the people want?? Less supply. Sleep well.”

The prospect and need for a Tron (TRX) coin burn has been the subject of many social media discussions. Many TRX HODLers believe that with a coin burn similar to how Binance Coin (BNB) orchestrates its own coin burn every quarter of the year, the price of TRX will go up due to the reduced supply in the market.

Many had anticipated the coin-burn discussion would be mentioned by Justin Sun during the launch of TestNet on March 31st, but this did not materialize. Many even speculated that the coin burn will be transaction based in a sense that with every new transaction on the MainNet, some TRX would be used as ‘fuel’ for the transaction and destroyed completely.

Now, with the prospect of a decentralized community with Super Representation through the 27 soon to be elected representatives, the discussion for a coin burn will soon be reignited. Super Representatives are meant to give every TRX owner the power to have his or her voice heard by laying the foundation for a self-governed community with a general election. Most, if not all, TRX HODLers want a reduction in coin supply through a coin burn.

The total supply of TRX stands at 100 Billion with a circulating supply of 65.748 Billion TRX with the current price of $0.081. This then brings the market capitalization to $5.381 Billion. If we were to halve the amount of coins in circulation using an abrupt coin burn, and maintaining the same marketcap, TRX would be valued at $0.163, which is double the current value.

This is proof that a coin burn would indeed give TRX HODLers their wish of having a higher TRX value with less supply. All we can do now, is wait for the Super Representatives elections and the decisions that will stem from such a democratic way of handling the TRX network and project.