Cryptocurrency development company TRON is ending the business week on a bit of a sad note, as the company recently suffered a significant loss to its token value. Yesterday, stablecoin operator Tether announced on Twitter that it had moved $1 billion worth of its tokens from the TRON blockchain to Ethereum.
In few hours Tether will coordinate with a 3rd party to perform two chain swaps (conversion from Tron to ERC20 protocol) for 1B USDt. Tether total supply will not change during this process.
Read more here: https://t.co/abfgnELSvi
— Tether (@Tether_to) August 20, 2020
A Big Loss for TRON
As the tweet explained, the move was necessitated by request from an undisclosed exchange. The chain swap essentially reduces the value of TRC-20 tokens by $1 billion, with the market cap for these tokens hitting $3.3 billion according to industry sources.
The move also pumps Ethereum’s reserves, which now host over half of the circulating USDT token supply. USDT’s supply on the Ethereum blockchain will rise from $7.5 billion to $8.5 billion, with the token’s entire circulatory amount pegged at $13 billion. This is also not the first chain swap to be happening in recent times. Last month, data from Flipside Crypto revealed that crypto exchange Binance had requested a Tether chain swap to Ethereum that consisted of $300 million worth of USDT tokens.
Losing 23 percent of its token standard’s supply will definitely hurt TRON, as the company has continued to lag behind Ethereum in terms of favored blockchains for decentralized projects.
Both blockchains have also been at each other’s throats, with their founders regularly trading jabs on social media. Early in July, Ethereum co-founder Vitalik Buterin claimed that TRON sympathizers with the Bitcoin community were a “perfect example” of Nazis, who famously joined forces with Japan in World War II.
Buterin had replied to Bitcoin activist and independent developer Udi Wertheimer, who tweeted: “#Tron > #Ethereum.” As part of his thread, he explained:
“From any serious point of view, any flaw that ETH has from the perspective of BTC community values, Tron has 10x more. And yet, ETH is often a mortal enemy, and yet Tron, at least psychologically, is viewed as a distant crazy uncle it’s cool to be kinda friends with.”
TRON Tries to Leverage on DeFi Growth
Taking more in Tether tokens isn’t the only way that Ethereum appears to be besting TRON. The former has also enjoyed a significant boost from the decentralized finance (DeFi) space, with many projects hosted on its blockchain seeing substantial gains.
Last month, DAppRadar’s Q2 2020 report showed that there was over $8 billion in recorded transactions across DeFi projects last quarter. Given that most of these projects are hosted on the Ethereum blockchain, there’s an argument to be made that they are partially responsible for the underlying asset’s recent rally.
TRON has noticed this, and is now gearing up to launch DeFi projects of its own. In March, the company launched Djed, a collateralized lending protocol that many criticized for having significant similarities to MakerDAO.
The company still isn’t giving up, however. In July, TRON founder Justin Sun announced that TRON’s DeFi subsidiary, JUST DeFi, will launch three new products for the ecosystem. The first — JUST Lend — is a lending and borrowing platform that would allow users to “earn interests and borrow against collateral.”
The second, named JUST SWAP, is a decentralized crypto exchange, while the third is a TRC-20 token known as JUST BTC.