What Is Tron (TRX)?

Key Takeaways

Tron is an EVM-compatible Layer 1 blockchain that uses the Tron Virtual Machine (TVM) to run smart contracts and decentralized applications (DApps).
The network uses a Delegated Proof of Stake (DPoS) consensus mechanism to enable quick and low-cost transactions.
TRX, the native token of the network, supports transactions, smart contracts, governance, and decentralized finance (DeFi) activities across the Tron ecosystem.

Tron is an EVM-compatible Layer 1 blockchain that uses the Tron Virtual Machine (TVM) to power smart contracts and decentralized applications (DApps). Tron was initially launched as a decentralized network for sharing content. Over time, it has developed into a broader ecosystem that includes decentralized finance (DeFi) and stablecoins. The network’s native token, TRX, is used to pay for transaction fees, execute smart contracts, and participate in network governance.

Tron was founded by Justin Sun, a Chinese entrepreneur who previously worked with Ripple. In 2017, the Tron Foundation was established in Singapore to guide the project’s development. TRX was first launched as an ERC-20 token on Ethereum during the project’s initial coin offering in August 2017. In 2018, Tron released its own mainnet, and the TRX tokens were migrated to the new blockchain.

The network uses a Delegated Proof of Stake (DPoS) consensus mechanism. In this model, TRX holders stake their tokens to gain voting rights, which are then used to elect 27 Super Representatives (SR). These SRs are responsible for validating transactions, producing blocks, and proposing governance updates. The process is cyclical, with elections held regularly to ensure accountability. In return, both SRs and voters receive TRX rewards as an incentive for participation.

Tron transactions are powered by three system resources: Bandwidth, Energy, and Voting Rights.
- Bandwidth: measures the size of a transaction in bytes.
- Energy: measures the computational cost required to execute smart contracts on the network.
- Voting Rights: obtained by staking TRX, are used to participate in governance by electing SRs.
If a user lacks sufficient Bandwidth or Energy, they must burn TRX to complete a transaction. This resource allocation model helps regulate network usage and prevents malicious contracts from overconsuming resources.