What is Tron?
|— Tron is a cryptocurrency focused on decentralization which includes virtually free transactions |
— You can earn TRX rewards by freezing assets and voting for Super Representatives
— The Super Representatives that are elected in the voting system can create new blocks for the Tron blockchain
— Similar to Ethereum, Tron’s blockchain also supports tokens known as TRC-10 and TRC-20 tokens
An introduction to Tron
TRX is a cryptocurrency that launched its dedicated blockchain on the 31st of May 2018. It strives to be fully decentralized and global, featuring several interesting elements. This includes virtually free and high-speed transactions as well as staking services and using tokens. Let’s dive deeper into the several elements that are important for understanding the Tron ecosystem.
What is delegated proof-of-stake (DPoS)?
Similar to Tezos, with Tron you can delegate and stake TRX to earn rewards. This means that you keep your TRX yourself, but endorse someone else to create new blocks for the blockchain. This type of delegation is referred to as Delegated Proof of Stake (DPoS). The mechanism for Tron’s DPoS system is, however, quite different from the one of Tezos.
In the Tron network, there are 27 validators that create the blocks on its blockchain. These are called Super Representatives (SR). Everyone participating in the Tron network can use their TRX to vote on who should be a Super Representative. To become a Super Representative, you’d need to have the highest amount of votes. Those who are open for being voted on, but haven’t gotten enough votes are referred to as Candidates. The choosing of Super Representatives is done every 6 hours.
Super Representatives who have created blocks can then choose to reward those who voted on them by giving them some Tron. This is how the Tron delegation mechanism works. Do note that the rewards can highly vary between those you vote on – some might not even give a reward at all! We recommend researching those you vote on. Websites such as this one can help you see how much a SR or a Candidate rewards their voters.
Freezing is a unique mechanism for the Tron blockchain. You can freeze your TRX in order to gain certain benefits. When you do this, your Tron will still be yours, but you cannot send it anywhere for 3 days. Freezing is similar to putting money onto a savings account: the money is there but you can’t spend it.
When you freeze your TRX, there are several things you can gain.
First you’d have to choose if you want to freeze your Tron to gain either Bandwidth Points (BP) or Energy Points (EP). On top of this, for each TRX frozen you will get 1 Tron Power – no matter which of the two you choose.
- Bandwidth Points (BP)
Instead of using your TRX to pay for your transaction fees, you can use Bandwidth Points to have free transactions.
You receive 5000 BP every day by default. By freezing Tron for BP, you can have even more free daily transactions.
The amount of BP you will get will depend on how much TRX you are freezing for it.
- Energy Points (EP)
Instead of using your TRX to pay for your smart contract interactions, you can use Energy Points to pay for them instead.
As such, freezing TRX for Energy will allow you to avoid additional fees when interacting with a smart contract (such as TRC-20 tokens – more on this later).
The amount of EP you will get will depend on how much TRX you are freezing for it.
You will get 1 Tron power for each TRX frozen. Tron Power is used to vote on a Super Representative or Candidate. For each Tron Power, you can cast 1 vote. In short: 1 frozen TRX = 1 Tron Power = 1 Vote. The more Tron you freeze, the more votes you can cast.
After 3 days, you can choose to unfreeze your Tron. As soon as you unfreeze some of your Tron, your votes will be reset, as well as the additional resources you earned by freezing in the first place. Since your votes are automatically reset after having unfrozen, you won’t be eligible to get rewards anymore.
How voting works in the Tron ecosystem
Everyone that has frozen their TRX on a Tron wallet has the right to vote in the Tron network. Once frozen, you will be given the option to vote either on Super Representatives (SR) or Candidates. You can select up to five different SRs or Candidates to vote on, and choose how many votes you want to give to each. The SR or Candidate you voted on can reward you for this – this is how you can earn more TRX. Remember to take a good look into who you’re voting for first.
How to avoid transaction fees
You can send TRX that isn’t frozen at any time, to any Tron account.
To make sure you’d have 0 transaction fees, you will need some Bandwidth Points. One transaction approximately consumes 250 – 300 Bandwidth Points (BP).
Every day, you will receive 5000 BP. These BP are going to help you pay the costs of around 20 transactions, daily. Beyond that number, if you want to continue having free transactions, you could consider freezing some tokens and buy TRX if needed. If you do not have enough Bandwidth points on your Tron account, you will pay approximately 0.002 TRX per transaction.
Similar to Ethereum, Tron has tokens running on its blockchain. These are called TRC-10 and TRC-20 tokens. One of the most known TRC tokens is Tron coin itself, you can see the price of TRX on Ledger. But there is also the token of BitTorrent. While TRC-10 tokens do not use a smart contract for its interactions, TRC-20 tokens do. This means that you’d have to pay an additional fee when transacting with TRC-20 tokens. Instead of paying TRX for it, you could instead use your Energy Points (EP) for it. You can earn Energy Points by freezing TRX.
Keep learning! If you enjoy getting to grips with crypto and blockchain, check out our School of Block video Can We Go Decentralized?