Written by: Ignas | DeFi (@DefiIgnas)
I used to think people chose Tron because they recognized its positioning as a "cheap USDT chain." However, the current USDT transfer fee on the Tron chain is as high as $1.87 to $3.74; in comparison, Ethereum gas fees are only $0.03, while Solana is almost free. I hadn't delved deeply into the Tron ecosystem landscape before, and now it seems I was indeed somewhat hasty—after all, it's just a highly centralized public chain controlled by an individual, what research value does it have? Yet data shows that TRX has surged by 383% over the past five years, while Bitcoin only rose by 18%, and Ethereum's performance isn't even worth mentioning.
In the ranking of protocol revenue holders, Tron firmly sits in the top three, which is one of the core metrics that crypto investors are most concerned about today.
Tron was initially almost a copy of Ethereum: TRX was first launched in 2017 as an ERC-20 token, and its whitepaper was accused of plagiarizing IPFS and Filecoin. Even Vitalik publicly called it a "copy-paste" job, Arthur labeled it vaporware, and DeoBrands directly called it a scam. Before the ICO ban, Tron had raised $70 million; later, it spent $120 million to acquire BitTorrent, Justin Sun spent $4.6 million on a charity lunch with Warren Buffett, and $6.2 million on a banana at Sotheby's. Today, the USDT supply on the Tron chain is as high as $84 billion, surpassing Ethereum; daily active users also exceed Ethereum, with over 10 million daily transactions, and fee revenue is projected to reach $3.51 billion in 2025. Of global retail USDT transfers under $1,000, 65% are completed via Tron. How did all this happen?
Tron's fee mechanism is quite unique. The general public mistakenly believes that Tron operates on the same logic as Ethereum, just with lower gas fees, but that's not the case. Ethereum charges gas fees in ETH, with prices fluctuating based on network congestion; whereas Tron employs a dual-resource model of Bandwidth and Energy (technical details can be skimmed, but the economic logic needs to be understood): Bandwidth covers transaction data size, with 600 free units gifted daily, sufficient for basic TRX transfers; Energy is used for smart contract computations, with zero free units daily. Given that USDT is a TRC-20 token, each transfer requires invoking a smart contract and consuming Energy. If Energy is insufficient, the network automatically burns TRX to cover the fee, costing about $2 to $4 per transaction.
If the receiving address already holds USDT, the fee is about 6.5 TRX ($1.87); for an empty address, the fee doubles. Experienced users can completely avoid this cost by staking TRX or leasing Energy (via third-party services), reducing the fee per transaction to as low as $0.15-$0.50. This staking design is quite clever, locking users into the ecosystem while suppressing token sell pressure. However, most users never optimize their settings, opting to pay the high fees directly—this might be the core business logic of Tron.
Every USDT transfer by an ordinary user permanently burns TRX. Based on daily transaction volumes in the tens of millions and the fact that most users do not optimize their Energy configuration, the annual burn amounts to billions of tokens, achieving sustained deflation for the protocol through actual usage.
Compared to Ethereum, Tron's current deflationary structure is a resounding slap in the face. Although Ethereum implemented a burn mechanism via EIP-1559 and should theoretically be deflationary, current gas fees have fallen to $0.03, primarily for two reasons: first, demand has migrated to L2, and second, L1 itself is scaling. Tron adheres to an L1 execution layer strategy, retaining demand on the mainnet, subsidizing experienced players by charging "non-savvy" users; Ethereum, on the other hand, employs a non-discriminatory fee strategy.
Furthermore, Tron's 3-second confirmation speed and established network effects together form its competitive moat. In real life, people have explicitly asked me to use Tron chain USDT for payments.
This once-mocked Ethereum fork has now become one of the highest-revenue protocols in crypto. Not through stunning DeFi innovations or technological breakthroughs, but by leveraging the massive transaction volume of USDT and a fee model where most users are unwilling to bother optimizing their configurations.
P.S.: For this reason, I also won't overlook the potential value of enterprise-grade public chains like Tempo or Canton.
P.P.S.: This article is not paid content, but donations in TRX or Tron chain USDT are welcome.
