TRON is an ambitious project dedicated to the establishment of a truly decentralised Internet and its infrastructure. It is an open-source blockchain platform that can run smart contracts and be used for building decentralised apps (dApps).
The TRON DAO was established in July 2017 in Singapore. By December 2017, TRON had launched its open-source protocol, followed by the release of its Testnet, Blockchain Explorer, and Web Wallet by March 2018. In May 2018, the TRON Mainnet went live, marking the Odyssey 2.0 technical milestone. The project declared its independence in June 2018 with the creation of the Genesis block and, shortly after, acquired BitTorrent in July 2018. In October 2018, TRON launched the TRON Virtual Machine (TVM), offering a complete developers’ toolset and 360-degree support system. Moving forward, TRON aims to integrate BitTorrent’s 100 million users through Project Atlas and grow its developer community to foster the launch of new DApps on its network.
Network Use Cases
Developers can create a diverse range of DApps and customised wallets on TRON. Since TRON enables smart contracts to be deployed and executed, the opportunities of utility applications are unlimited.
TRON is a high-performance decentralised blockchain-based operating system that allows developers to build highly efficient smart contracts. Initially, it was positioned as a social network, but only for a new generation — independent of any centralised management. However, TRON has gone far beyond its original vision. And to date, TRON is a popular smart contract-capable platform within which developers launch their decentralised applications and issue custom tokens. TRON solves the scalability problem inherent in Ethereum by increasing throughput and shifting gas fees. But, it isn’t easy to compare TRON with Ethereum because their architecture differs directly. TRON has a hierarchical system of accounts and many management functions available to network participants.
“TRON allows you to focus exclusively on the business logic of applications, giving the developer almost all the necessary
tools to work with accounts and their data. That is why TRON can be called practically an operating system on the blockchain.”
For the developer of smart contracts, if we leave aside the blockchain, TRON offers, in fact, a database with an accounting system, access, and logic that the contract developer controls. TRON allows you to focus exclusively on the business logic of applications, giving the developer almost all the necessary tools to work with accounts and their data. That is why TRON can be called practically an operating system on the blockchain.
Token Use Cases
Tronix, or TRX, is the native coin of the Tron ecosystem. It’s used for transaction fees on the network and can be staked in order to receive network rewards. It is also used for governance, with TRX holders able to vote on decisions about the network.
TRX is used to issue rewards, receive bandwidth points and Energy, participate in voting, as a medium currency for all TRC-based tokens, and as a unit of calculation in the products of the TRON ecosystem (NFT marketplaces, DeFi lending markets, and so on).
Protocol and Consensus Mechanism
The TRON consensus mechanism uses an innovative Delegated Proof of Stake system in which 27 Super Representatives (SRs) produce blocks for the network. Every 6 hours, TRX account holders who freeze their accounts can vote for a selection of SR candidates, with the top 27 candidates deemed the SRs. Voters may choose SRs based on criteria such as projects sponsored by SRs to increase TRX adoption, and rewards distributed to voters. This allows for a more democratised and decentralised ecosystem. SRs’ accounts are normal accounts, but their accumulation of votes allows them to produce blocks. With the low throughput rates of Bitcoin and Ethereum due to their PoW consensus mechanism and scalability issues, TRON’s DPoS system offers an innovative mechanism resulting in 2000 TPS compared to Bitcoin’s 3 TPS and Ethereum’s 15 TPS.
The TRON protocol network generates one block every three seconds, with each block awarding 32 TRX to Super Representatives. A total of 336,384,000 TRX will be awarded annually to the 27 SRs. Each time an SR finishes block production, rewards are sent to a sub-account in the super-ledger. SRs can check, but not directly make use of these TRX tokens. A withdrawal can be made by each SR once every 24 hours, transferring the rewards from the sub-account to the specified SR account.
The three types of nodes on the TRON network are Witness Node, Full Node, and Solidity Node. Witness nodes are set up by SRs and are mainly responsible for block production and proposal creation/voting. Full nodes provide APIs and broadcast transactions and blocks. Solidity nodes sync blocks from other Full Nodes and also provide indexable APIs.
TRON adopts a 3-layer architecture divided into Storage Layer, Core Layer, and Application Layer. The TRON protocol adheres to Google Protobuf, which intrinsically supports multi-language extension.
Tokenomics
TRX does not have a maximum limited supply; at the time of writing, about 93 billion TRX are in circulation.
To counteract inflation, in addition to staking, a burning mechanism is used. As mentioned, transactions in the TRON network consume bandwidth points and Energy. If users do not have enough bandwidth points or Energy to cover the resources needed to complete the transaction, they must burn TRX. Thus, TRX is permanently removed from circulation.
In addition, TRON provides several TRC token standards to enhance the capabilities of all types of transactions inside and outside the network. The main TRC token standards are:
- TRC-10: The most developed token standard initiates transactions in the blockchain. It allows you to perform operations at a low price without using the TRON Virtual Machine (TVM). To issue TRC-10 tokens, the user must pay 1024 TRX.
- TRC-20: An improved version of the TRC-10 standard. The standard allows for cryptocurrency transactions on the TRON blockchain (for example, USDT TRC-20, USDC TRC-20, BTT, etc.). Its function is similar to TRC-10. The only difference is that it is connected to the TRON Virtual Machine (TVM). This token standard is compatible with ERC-20.
- TRC-721: This is the standard for issuing non-fungible tokens (NFTs). TRC-721 is fully compatible with ERC-721.
Governance
Every account in the TRON network can apply and have the opportunity to become a Super Representative (denoted as SR). Everyone can vote for SR candidates. The top 27 candidates with the most votes will become SRs with the right and obligation to generate blocks. The votes are counted every 6 hours and the SRs will change accordingly.
The committee is used to modify TRON dynamic network parameters, such as block generation rewards, transaction fees, etc. The committee consists of the 27 SRs in the current round. Each SR has the right to propose and vote on proposals. When a proposal receives 19 votes or more, it is approved, and the new network parameters will be applied in the next maintenance period (3 days).
Only the SR accounts have the rights to propose a change in dynamic network parameters. Only committee members (SRs) can vote for a proposal and the member who does not vote in time will be considered as a disagree. The proposal is active for 3 days after it is created. The vote can be changed or retrieved during the 3-days voting window. Once the period ends, the proposal will either succeed (19+ votes) or fail (and end).
Shariah Opinion
The TRX token can be considered Shariah compliant. It’s used for transaction fees on the network and can be staked in order to receive network rewards. It’s also used for governance, with TRX holders able to vote on decisions about the network. TRX token holders do not hold equity in the underlying activities, and therefore token holders cannot be responsible for all and every activity that occurs traded on Tron. The holders of TRX are responsible to ensure that their governance and voting aligns with Shariah principles, and that any activity or transaction they make using TRX is Shariah compliant.
Conclusion
Based on and subject to the foregoing information, and for the purposes of this conclusion, nothing has come to our attention that causes us to believe that TRX is in breach of Shariah* principles and rulings as adopted by the scholars conducting this research.
*Attention is drawn to the term ‘Sharia’ and ‘Sharia compliant’ and its interpretation thereof as expressed in the following link https://shariyah.net/glossary/
