The Tron blockchain saw an increase in usage in the first quarter of 2023, according to a new report from market intelligence firm Messari. The market capitalization of its native token, TRX, increased by nearly 20% QoQ.
Although the United States Securities and Exchange Commission (SEC) has announced several lawsuits against Tron ecosystem tokens, network activity has remained mostly unperturbed. Its total quarterly revenue soared $90.04 million in the first quarter of 2023, recording an 88% jump from its fourth quarter 2022 revenue of $47.96 million.
Tron Status: Q1 2023
Average daily transactions over the three months under review increased by 7.7% to around 7 million. Messari said the increase can be partially attributed to staking activity on the network. The total number of transactions from staking activity increased by 197% QoQ, although it only represents nearly 3% of all transactions on the TRX network.
The state of Tron report, commissioned by Tron, said transaction activity on the network was mainly dominated by triggered smart contracts and TRX transfers, accounting for 88% of the total. Although the activity of both types of transactions was relatively stable throughout the first quarter, the USDT smart contract remained the main catalyst for contract execution on TRON.
Transaction fees also saw a sharp increase in the first quarter. The statistics revealed that the average transaction fees in TRX and USD increased by 59.2% and 80.2%, respectively. The committee’s Proposal No. 79, which passed in the previous quarter, played a crucial role in causing transaction fees to rise. The proposal in question essentially changed the parameters of the network and increased the amount of energy needed to run smart contracts.
Additionally, the Dynamic Energy Model was activated earlier this year as part of TIP-474. The mechanism basically focuses on increasing the transaction cost and deterring low-value smart contract transactions that do not affect other applications.
“The dynamic energy model and increased energy requirements resulted in higher revenue generation in TRX (total transaction fees paid in TRX), which increased 65.5% QoQ (+87.7 % in USD). Simultaneously, the outstanding market capitalization of TRX increased by 18.1% QoQ.”
Tron DeFi, Stablecoin space
Total Value Locked (TVL) denominated in USD increased by 18.8% in the first quarter of the year. But TRX-denominated TVL noted a slight decline of 0.5%. Such a trend signaled that “an increase in USD asset prices drove TVL rather than new capital inflows.”
TVL’s main protocols on top of the Tron network – JustLend and JustStables – also benefited from the broader market recovery throughout the first quarter. As a result, both protocols increased by 26% and 21%, respectively.
Tron’s position in the stablecoin landscape remains significant as it lags behind Ethereum. The Justin Sun-led platform is also ahead of other rival chains when it comes to the market capitalization of hosted stablecoins. At the end of the first quarter, it held more than $43 billion, down from nearly $33 billion quarter-on-quarter. Additionally, Tron’s USDT market capitalization also increased by 30% to $10 billion per quarter, due to Tether trading $400 million USDT from ERC-20 to Tron.
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