Fast forward to today and Tron has literally become the most popular network of choice for stablecoin transactions. However, increasing fees to transact on the Tron network has begun raising eyebrows from users and experts alike. This developing worry would be a shame given Tron’s expanding popularity in the crypto treasury space. Justin Sun—Tron’s founder and crypto celebrity—has been busy cultivating connections with the usual suspects, or rather the unusual suspects—Donald Trump. This decision makes the blockchain even more enmeshed in the political and financial worlds.
Tron's Ascendancy in Crypto Treasury Management
Since the beginning of this year, Tron has experienced a remarkable surge in crypto treasury firms adopting its infrastructure. As noted, this increase demonstrates Tron’s increasing impact and importance in the cryptocurrency world. This uptick in activity further highlights Tron's attractiveness as a go-to platform for managing digital assets, especially stablecoins. More than half of all USDT, the biggest stablecoin by market capitalization, is actually hosted on the Tron network. This further cements Tron’s dominance over the stablecoin market on-chain. Tron’s overall efficiency and speed in processing transactions is impressive. Users crowd to it for their ability to move stablecoins quickly and cheaply.
World Liberty Financial (WLFI) has $11 million in TRX in its treasury. This major investment is another example of the increasing institutional interest in Tron. Tron Inc. recently made their move into the spotlight by officially minting President Trump’s brand new stablecoin, USD1 on June 10. With this step, Tron Inc. has secured its place as a central player in the digital asset strategies of some of these prominent figures. Beyond TMG’s Bitcoin treasury, it stands to become the most corruption-linked entity connected to the White House.
The Rising Cost of Transactions on Tron
Though its increasing popularity is putting pressure on Tron with rising transaction fees, the price of the average transaction on Tron has been consistently increasing, at times well over $1. For reference, over the last few months, Tron’s average fees were well over $1. They have indeed fallen below that important threshold. This increase is especially alarming when compared to other networks such as Ethereum. In fact, over the last 30 days, Tron's average transaction fee has been higher than Ethereum's, calling into question Tron's famed cost effectiveness.
Average fee typically one dollar. Yet when there’s network congestion or with complicated transactions, Tron's fees can rocket up to $70. As of Wednesday morning, that same TRX would only cost 30 cents to send over Tron. But do you know how much it costs to send USDT on Tron? These sudden changes in fees are causing confusion among users and companies that use Tron as their main network for stablecoin transactions.
"It's one of those things where everybody built this infrastructure on Tron for stablecoins, and now everybody has to deal with things like, 'Oh wait, the fees suck.'" - Unnamed executive.
Impact on Users and the Future of Tron
The surging transaction costs on Tron disproportionately impact the poorest customers. These customers rely on the network to receive remittances and conduct daily business. Tron and USDT serve lower-income customers. For these users, any increase in fees has a material impact on their financial health.
"We're exploring turning off Tron for any small transaction because the fees have gotten pretty ridiculous. I mean, we're paying upwards of $4 for transactions now. That is fine if you're doing a million-dollar transaction, but if you have hundred-dollar payments coming in, it's not feasible. And if you're doing remittance payments out and things like that, it's just not feasible." - Unnamed stablecoin company leader.
If transaction fees increase, users will be incentivized to find alternative, lower cost networks. This change has the potential to threaten Tron's supremacy within the stablecoin industry.
"You're talking about some of the most cost-sensitive markets on Earth. In some of these countries people will spend eight hours of their day to save a couple of bucks, and $50 versus a few cents is a pretty tremendous difference." - Chris Maurice, chief executive officer of YellowCard.
Speaking of political and memecoin spheres, Tron's founder Justin Sun has been grabbing headlines these days. Sun is now the largest singleholder of the $TRUMP memecoin. He was an invitee to Trump's private dinner with token holders on May 22. These ties amplify the overlap between cryptocurrency, politics, and high finance, making the story of Tron’s future even more difficult to unwind.
