# CRYPTO ANALYSIS: TRON PROJECT 

By [Haruki_Cripto](https://paragraph.com/@haruki-cripto) · 2024-08-19

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Tron is a Layer 1 EVM blockchain (Ethereum-compatible) that uses the TRON Virtual Machine for the implementation and creation of smart contracts for decentralized applications. Its architecture features a delegated proof-of-stake (DPoS) mechanism, with DPoS elections occurring every 6 hours and 27 super representatives alternating in block production.Founded in September 2017 by HE Justin Sun, the Tron network has made significant developments since its testnet, achieving extraordinary results. Its testnet was in use in March 2018. Initially, the TRX (TRON) token was an ERC-20 (ETHEREUM STANDARD TOKEN), but after the mainnet launch, the token was transferred to the Tron network. Subsequently, the TRON VIRTUAL MACHINE went live on August 30, 2018, enabling smart contract capabilities. July 2018 also saw the integration of the BitTorrent ecosystem, a pioneer in decentralized web 3 services with over 100 million active monthly users. Additionally, Tron is the largest holder of USDT (TETHER).

![](https://storage.googleapis.com/papyrus_images/307ddeca72d1dfe41a8aa0615e690d3fbf70dd9974dae91c0d168600856b97f7.png)

In December 2021, Tron achieved full decentralization and is now governed by a DAO (Decentralized Autonomous Organization). In May 2022, the over-collateralized decentralized stablecoin USDD was launched on the TRON blockchain, backed by the first cryptocurrency reserve for the blockchain industry – TRON DAO Reserve, marking Tron’s official entry into decentralized stablecoins. USDD is pegged 1:1 to the US dollar using a mint-and-burn mechanism. When the USDD price falls below $1, users burn USDD to mint TRX, and when the USDD price rises above $1, users burn TRX to mint USDD.

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We have completed the initial project analysis, understanding what it is, who its founders were, and some important details. Now, we move on to the fundamental analysis, where we will examine market activity, tokenomics, business model, and price/value.

Market Activity:

To understand how actively the token is traded and where it is traded, we need to assess liquidity and potential demand for the cryptocurrency. Market activity is calculated using the token’s volume divided by its market value, multiplied by 100. Daily trading should be between 2% and +4%, and weekly trading between 10% and +20%.

We can see that the TRX token has a daily volume of 4.29% and a weekly volume of 30%. It is also listed on major cryptocurrency exchanges such as Binance, Coinbase, OKX, Bybit, Upbit, Kraken, among others. Therefore, we can see that the token is actively traded, reducing liquidity issues.

![Data: CoinMarketCap](https://storage.googleapis.com/papyrus_images/2b266c6ceff15836fbd0b375bdee936d6a33de929505bffbb2a24e4ee3824062.png)

Data: CoinMarketCap

![Data: CoinMarketCap](https://storage.googleapis.com/papyrus_images/a161087164d106ed09f1afa8d30ad9a665dcd2d19d282a6449d1dee9a02caf54.png)

Data: CoinMarketCap

The next step we will analyze is its price/value. Here, we will use a bit of technical analysis and other fundamental data. Our goal is to find the best buying points, whether it's a good time to buy, and how many holders are in profit/loss.

**FDV/Revenue Multiple:**

When we look at the P/S ratio (fully diluted), which is the fully diluted valuation (FDV) divided by the annualized revenue, we are calculating how much inflation the project has for how much revenue it is delivering. The higher the revenue and the lower the FDV, the better and cheaper it is. Today, August 19, 2024, the multiple is 6.37x, and its ATH was 8.73. Its average is around 6x. Based on this data, it would be cheap to buy TRX. The project has been delivering substantial revenue.

![](https://storage.googleapis.com/papyrus_images/fa3346c2ccd28ea0d0c5c27b9cb8df6c469e78ba617102ad27b7c7ee71ee96d9.png)

**FDV/TVL Multiple:**

Fully Diluted Valuation / Total Value Locked. Below 1 would be considered cheap, 1.5 is fair value, and above 2 is expensive. Today, Tron has 12 billion FDV and almost 8 billion TVL. Dividing these values, we get a multiple of 1.5 (fair value).

![](https://storage.googleapis.com/papyrus_images/c634ba5a399f9ddbd3fc7faac5d7fede30c0b046f70f60ed244461bc623333cd.png)

**In/Out of the Money Around Price:**

Percentage of holders in profit/loss based on fair prices, highs, and lows. The fair price of TRX is $0.141, with cheaper prices ranging from $0.120 to $0.137. Holders who bought at these prices are in profit. Prices above $0.140 to $0.158 would mean holders are at a loss. Remarkably, 95.55% of holders are in profit, and less than 5% are at a loss.

![](https://storage.googleapis.com/papyrus_images/af8cf1c7386142e174e117ac8f9b98b36243b71c73d1ab8df3666cb472c7a356.png)

**Technical Analysis:**

When analyzing its price, it’s surprising how much the token has appreciated. Its low in the bear market was $0.0463, its peak was $0.179, and currently, TRX is at $0.142. From its low to now, there has been a 214% increase (945 days). If you had invested $1,000 today, you would have nearly $12,000. To reach its ATH, TRX would need to appreciate 21.18%, requiring substantial strength and performance compared to other projects. The nearest support level is at $0.097. The 21-period exponential moving average (EMA) shows a strong upward trend, currently at $0.1421. Prices tend to revert to the average, gaining strength and rising. Thus, the EMA21 is na important support level and a potential buy entry point. Analyzing the Bollinger Bands (BB), the price is close to breaking the upper BB, so wait for the price to rise and create a reversal candle before buying at the EMA21. Regarding the RSI, overbought conditions are above 78, which is a good time to sell, while oversold conditions are around 39, which is a great time to buy. Considering all these indicators, now might not be the best time to buy. The best prices are $0.12, $0.10, and $0.0974. However, staying out of the market can be risky, so use dollar-cost averaging (DCA) along with your investment strategy.

![](https://storage.googleapis.com/papyrus_images/4d8167bd6e5ca2cb08071aa0de4385ce54d50e46ad48dcc33fe669bf40580ec6.png)

![](https://storage.googleapis.com/papyrus_images/128b842053c5871ae984365d54466f8a3da5dc1bde4b66c09328d52f98b6139c.png)

![](https://storage.googleapis.com/papyrus_images/466de4bc259898f1002e85b8eea16a5f851261794db49d0734e0a5a8c27a5eba.png)

![](https://storage.googleapis.com/papyrus_images/fe6ca62375c1e76b1a954316b96b4c975c723cc01beac2ffeb527d639fc29880.png)

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![](https://storage.googleapis.com/papyrus_images/3bed0597c0a9f6a0e35c1058b55be6164b7fea9e6736d6ca8a11d232395c247d.png)

TOKENOMICS

Utility:

Its main utilities include:

*   Transaction Payments: TRX is used to pay transaction fees within the Tron network, facilitating transfers and interactions with smart contracts.
    
*   Staking and Delegation: TRX holders can participate in staking to become Super Representatives (SRs) or delegate their tokens to vote for SRs, who are responsible for validating and producing blocks on the network.
    
*   Governance Participation: TRX allows users to participate in Tron network governance, influencing important decisions and protocol updates.
    
*   Network Resource Access: TRX is required to access resources on the Tron network, such as storage and bandwidth, which are essential for executing smart contracts and decentralized applications (dApps).
    
*   Integration with dApps: TRX is frequently used within decentralized applications (dApps) built on the Tron blockchain, such as games and social media platforms.
    

These utilities contribute to the adoption and functionality of the Tron blockchain, as well as encourage active participation in its community and infrastructure.

MARKET CAP:

Market cap is calculated by multiplying the unit value of a cryptocurrency by the circulating supply. The value of the cryptocurrency itself is not the primary factor; rather, it is its market cap. A higher market cap generally indicates a more solid and secure project, but usually with lower potential returns. In contrast, a smaller market cap signifies a smaller and riskier project but with potentially higher returns.

Projects with a market cap exceeding $10 billion are considered safer. Projects with a market cap between $1 billion and $10 billion have good growth potential, while those with a market cap under $1 billion are riskier but can offer significant profits.

Currently, Tron has a market cap of $12.39 billion, and its Fully Diluted Valuation (FDV) is also at $12 billion. To understand the difference between market cap and FDV, it is important to consider future inflation potential. Noting that all tokens are already in circulation, there is no concern about additional sales or issuance of new tokens. A large difference between market cap and FDV may indicate significant inflation that could impact the token's price. A difference of up to 70% might suggest that the token is in a relatively healthy situation.

![](https://storage.googleapis.com/papyrus_images/adfa4e36fa37288385ba661a4ead8ddd6c3a1593749afcdcb238e134fa423b2c.png)

ICO:

In total, $77 million was raised across 2 investment rounds, with $70 million raised in the main sale in 2017. 40 billion TRX were traded at a price of $0.00000038, and participants in the first round experienced a return of 375,263.16x. In the private round, $7.7 million was raised from investors, bringing a return of 475x where the token was traded at $0.0003.

![](https://storage.googleapis.com/papyrus_images/81740ae71aa2f913f4197d65c67f6b974615def63747684eb5116651282d7b63.png)

![](https://storage.googleapis.com/papyrus_images/3b36368b2aa799e19a9bca38e448bbc73189c69e0d1dde2c2c671cfeb78da6f0.png)

WHALES/RETAIL:

The concentration of whales shows how much of the token might be concentrated and the risks they pose. Whales can influence the price, and their sales can trigger significant drops. 56% of TRX tokens are held by whales, representing over 47 billion TRX, while only 9.7% are in the hands of retail investors (normal investors), representing 8.2 billion TRX. Within its blockchain, there is a smart contract for USDD, used to maintain its parity, representing about 9 billion tokens, or around 9%, with the highest concentration being 12% in a single smart contract. In the top 3, there is a wallet holding 3% of the total supply, making it interesting to monitor this whale's movements.

![](https://storage.googleapis.com/papyrus_images/be837eb114de57256e263bde90e568c395277fd179c52bd2c5ad3ae82221e264.png)

![](https://storage.googleapis.com/papyrus_images/9c17c0f7167b71035130849193ffab9e96ccf4086c5a1e1285d1684a67fecda8.png)

**MONITORING**

**TEAM AND GOVERNANCE:**

To monitor the project, you should track the governance team, its founders, key figures of the project, communication channels like Telegram and Discord, watch interviews, keep na eye on the roadmap, observe active users, check the adoption of its wallet, and stay updated on the project’s major developments. All these aspects are essential for following the project and its competition in the market.

![](https://storage.googleapis.com/papyrus_images/7ee42f69b7bc02a9771e4b9859c44d439ea06e6feb6d6382a5042188746b3277.png)

![](https://storage.googleapis.com/papyrus_images/a3f02ed29ef4ab97485044dda8804991c069d5b6ab3a021f1dbc6c58cda7f6d8.png)

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![](https://storage.googleapis.com/papyrus_images/01a9371b45dd17a22b241c880318ea37377e8d0d6a7f8df03a6555bf3da4fed7.png)

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*Originally published on [Haruki_Cripto](https://paragraph.com/@haruki-cripto/crypto-analysis-tron-project)*