Tron becomes DeFi’s third-largest Blockchain

What's driving Tron’s demand and growth?
May 31, 2022 - Cynthia Chung

This week, the Tron Blockchain, launched in 2018 by Justin Sun, has emerged as the third-largest Blockchain in terms of total value locked (TVL) in decentralized finance. 


The total value locked (TVL) across Tron's nine different apps currently stands at US$ 5.94 billion, up 44% over the past month, according to DefiLlama.


Tron follows closely behind the BNB chain and Ethereum Blockchain. Binance Smart Chain's TVL is US$ 10.8 billion while Ethereum hosts over US$ 93 billion.


Amid Terra Luna and Terra UST collapse, on May 12, Tron’s TVL stood at US$ 3.97 billion and ranked number five in terms of TVL size by chains. Tron is also the only Blockchain among the top 20 recording gains, with a monthly gain of 41.33% against the US$ 90 billion liquidity loss in the DeFi sector since last month.

What’s driving Tron? 


Tron’s TVL has risen in value due to its new stablecoin USDD. In April, Tron changed its fundamentals with the introduction of USDD, not dissimilar to the burn/mint mechanism of Luna/ UST. Tron’s bullish rise is driven by the launch. 


However, unlike Tether’s USDT and Circle’s USDC stablecoins, USDD is not backed by anything and is governed by smart contract algorithms instead. The algorithm protecting the stablecoin’s peg to the dollar is an arbitrage trade between USDD and Tron’s native token TRX. Investors can trade 1 USDD for US$ 1 of TRX even if the price of USDD falls below US$ 1 and profit from the difference. 


USDD is now ranked 73rd in terms of market capitalization, with a market capitalization of US$ 600,792,755 according to Coinmarketcap data. The figure has grown from US$ 90 million recorded on its first day of launch on May 5. 


Photo: Twitter @justinsuntron


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