Silently Becoming the Top Blockchain for Stablecoin Transactions is Tron.
One instance of cryptocurrency becoming popular is Matias' Buenos Aires-based online store. The majority of Ditel customers purchase electronics with stablecoins.Yet contrary to what most cryptocurrency insiders would probably assume (or hope),...
One instance of cryptocurrency becoming popular is Matias' Buenos Aires-based online store. The majority of Ditel customers purchase electronics with stablecoins.
Yet contrary to what most cryptocurrency insiders would probably assume (or hope), they're not using the blockchain. Argentines are not using the Bitcoin network to pay for their iPhones. They also don't use Ethereum.
They use Tron as payment.
About 95% of his customers, according to Matias, selected USDT on Tron as their method of payment. Matias requested that The Defiant only use his first name in order to protect his privacy. The shop owner expressed his belief that the network's popularity was largely due to Tron's cheap fees and speedy transactions.
Not Only in Argentina.
This Argentine store reflects a larger trend that indicates Tron is becoming more and more popular in emerging economies.
During the bear market, there has been an increase in global Google searches for "USDT Tron," with Nigeria, Côte d'Ivoire, and Pakistan showing the highest level of interest, respectively.
Google searches for "USDT Tron" worldwide.
On the other hand, since early 2022, searches for "USDT Ethereum," where the stablecoin is also the biggest dollar-pegged asset, have been trending lower. Though Tron's market capitalization is significantly smaller than Ethereum's, the two are currently tied for the most searches using "USDT.".
searches for "USDT Tron" (blue) versus "USDT Ethereum" (red).
Tron is the most active stablecoin right now, thanks to activity in emerging markets.
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A chart that showed the Tron blockchain as the undisputed leader for fiat-backed stablecoin transactions in a recent stablecoin paper from a major hedge fund attracted attention.
The study revealed Tron with over 2.4M weekly active addresses interacting with stablecoins. It was written by staff members of Brevan Howard, a hedge fund with $23.4B in assets under management and a growing interest in cryptocurrency.
Activity by Chain for Stablecoin.
The amount exceeded both the total for Ethereum and Layer 2 applications developed on Ethereum, such as Arbitrum and Optimism.
Gateway for Payments.
Tron is being widely used as a network for simple transfer payments, according to key indicators.
The median USDT transaction on Tron has varied between $100 and $300 over the last three years, according to data from Allium, a data provider that collaborated with the Brevan Howard team to create the stablecoin report. The market capitalization of USDT, the largest stablecoin in cryptocurrency, is $84 point two billion.
Additionally, the distribution of amounts above and below that range was evenly distributed, indicating that a variety of parties are using Tron to send USDT. However, according to Allium's data, the majority of Ethereum's stablecoin volume was made up of big transactions that cost more than $100,000.
Reduced Transaction Costs.
One significant benefit of Tron over Ethereum is its lower cost of use. Based on Etherscan, sending USDT on Ethereum currently costs roughly $3.50 at this writing.
It is difficult to find information about Tron transaction fees, but The Defiant's test transaction on the network indicated that sending USDT cost about 13.7 TRX. The native token of Tron is called TRX. With the current exchange rate of $0.095 the transfer should have cost about $1.30.
A Successful Transaction with Tron.
According to Matias, the network's appeal was partly fueled by Tron's cheap fees and speedy transactions.
Diego Diaz, an Argentine bank's payments specialist, concurred.
He claimed that "the Tron network's affordability and speed" are its main draws. It is also extensively utilized in markets that are not subject to government regulation. ".
Diaz continued by saying that USDT is available on Tron through any fintech business in Argentina that makes use of cryptocurrencies. According to Diaz, there was less awareness of Layer 2 solutions, which have been hailed as a more affordable method of transacting with Ethereum's security.
Tron's price does not outperform Layer 2s; at $0.11, USDT transfers on industry-leading solutions such as Optimism and Arbitrum were nearly ten times less expensive than Tron.
How Come Stablecoins?
One of the most common use cases in emerging markets, where users frequently struggle with depreciating local currencies and capital controls, is the transfer of stablecoins over inexpensive and quick networks.
Argentinean Fernando Volpe, the owner of the peer-to-peer exchange Calypso, claimed that people are turning to cryptocurrency as a result of Argentina's severe regulations on official dollar purchases. Depending on how the dollars will be used, there are various exchange rates and limits on the amount of foreign currency that people can purchase in the South American country.
Additionally, Argentine peso holders can avoid holding this currency, as stablecoins have helped during much of 2023 to avoid over 100% annual inflation. People turn to stablecoins and the dollar as a haven because the peso is continuously losing value, according to Volpe.
To beat inflation, according to Diaz, a lot of people receive their paychecks in USDT and then exchange the stablecoin for pesos to cover everyday expenses. According to Diaz, platforms where people get their salaries also aid in maintaining privacy. Because he keeps a working relationship with the companies, the bank employee declined to name them.
"They can easily save money and protect their cryptocurrency holdings from government oversight with the help of these platforms," Diaz continued.
Everyone Makes Use of It.
Stablecoin use allows users to avoid inflation and capital controls. They will also choose the option with the lowest fees and highest volume because they are concerned about protecting their savings rather than yield farming or flipping NFTs.
The owner of the online store, Matias, claims he uses USDT on Tron because it's the standard and he wants to take coins that people own.
Via the messaging app Telegram, Volpe's peer-to-peer exchange enables users to trade Pesos for dollar-pegged stablecoins. He claims that every day, he helps with USDT sales on Tron.
Decentralization is lacking.
To be sure, Tron does not have a reputation for upholding the decentralization benefits of cryptocurrency. The blockchain is based on a system of 27 parties known as "super representatives," who must be elected in order for transactions to be approved. According to Beaconscan, Ethereum's proof-of-stake system has almost one million validators.
Justin Sun, the creator of Tron, has also frequently stirred up controversy. Prominent figures in the cryptocurrency world, such as Vitalik Buterin, have accused the whitepaper describing Tron's design of being plagiarized.
Before agreeing to the date six months later, Sun had infamously canceled a charity lunch with Warren Buffet. Also, the Securities and Exchange Commission charged Sun in March of paying celebrities for covert advertisements and offering unregistered securities for sale.
Volpe implied that individuals were preoccupied with other matters when talking about Tron's image.
He claimed, "They do not pay attention to security when they see that the network works for them.".
Tron's accomplishments as a stablecoin transfer network, however, represent a significant advancement for the cryptocurrency industry, whose supporters have frequently highlighted the technology's capacity to "bank the unbanked.". ".
It appears that Tron, an unlikely candidate, is the one making the difference in that mission.