In a remarkable development, the TRON community has passed a proposal allowing the utilization of TRX from USDD’s TRX Burning Contract and Reserve for sTRX depositing and TRON governance. This decision, though not without its detractors, marks a significant turning point in the governance of the TRON network and the development of the USDD ecosystem.
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The proposal, presented by the USDD community, aims to leverage TRX held in USDD’s TRX Burning Contract and TRON DAO Reserve (TDR) to enhance the liquidity of sTRX and fortify TRON’s governance model. It also intends to provide a sustainable and steady energy supply for the sTRX Energy Rental market, subsidize mining activities in the USDD ecosystem, and increase the collateral ratio of USDD, among other benefits.
However, this decision has not been without controversy within the TRON community. Critics argue that staking TRX would decrease the amount of energy users get from staking TRX by two-thirds if the TDR stakes all of its TRX for energy. Furthermore, they contend that this move could lower energy rental prices and Super Representative (SR) rewards due to an increased energy supply for rentals, thereby negatively affecting current rent-seekers.
There is also some controversy about TRON founder Justin Sun using 200M TRX of his own funds to sway the vote, along with another unknown whale who used 990M TRX to vote For the proposal, including some unconfirmed allegations that the unknown whale is actually Justin himself. Our analysis of this address did not find anything directly linking Justin Sun to this unknown wallet, and we have reached out to Justin and the TRON DAO for comment. These two whales were able to sway the vote in their favor, which only had 3 days to be voted on, while many users had their funds locked up for 14 days to earn staking rewards.
Proponents, on the other hand, argue that lower rental prices are beneficial for users and developers, which in turn could lead to greater activity and innovation on the TRON network. They also contend that the reduced SR rewards and less free energy from staking will increase the net TRX fee burn rate, effectively decreasing the circulating supply of TRX and potentially driving up its value.
In terms of the implications for the TRON DAO Reserve (TDR), this proposal is largely positive. It is expected to increase revenue and enhance the stability of USDD, which serves to benefit the TRON network, expand its ecosystem, and improve its liquidity while removing TRX and other cryptocurrencies from the circulating supply. The TDR, with its significant holdings of TRX, can use the earnings from this initiative to explore more strategies that further the development and diversity of the USDD ecosystem.
The potential destabilization of USDD and the return of the 10% of TRX’s supply that has been burnt to back it to circulation, however, would present a significant downside. Such a scenario could lead to a sudden increase in the circulating supply of TRX, potentially affecting its price stability. Moreover, the destabilization of USDD, a prominent stablecoin in the TRON ecosystem, could undermine user confidence and the stability of the broader TRON network.
In conclusion, this proposal’s passing marks a significant turning point in the governance and development of the TRON and USDD ecosystems. Although it presents potential challenges and trade-offs, it also opens up new opportunities for growth, innovation, and enhanced network participation. As always, the ultimate success of this initiative will largely depend on its implementation and the community’s ongoing engagement and support.
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