The first quarter of 2023 saw an increase in usage of the Tron blockchain, as reported by market intelligence firm Messari. The native token, TRX, increased in market cap by almost 20% QoQ.
The network activity remained mostly unaffected despite several lawsuits announced by the US Securities and Exchange Commission (SEC) against Tron ecosystem tokens. The network’s total quarterly revenue rose to $90.04 million in Q1 2023, an 88% increase from its Q4 2022 revenue of $47.96 million.
State of Tron: Q1 2023
The average daily transactions in the reviewed three months increased by 7.7% to approximately 7 million. Messari stated that staking activity on the network contributed partially to the increase. The total transaction count originating from staking activity increased by 197% QoQ, despite accounting for nearly 3% of all transactions on the TRX network.
The State of Tron report, commissioned by Tron, stated that smart contracts triggered and TRX transfers dominated the transaction activity on the network, representing 88% of all transactions. The USDT smart contract remained the main catalyst of contract execution on TRON, despite the activity remaining relatively flat throughout Q1 across both transaction types.
The first quarter also saw an increase in transaction fees. The average transaction fee in TRX and USD increased by 59.2% and 80.2%, respectively. Committee proposal No. 79 played a critical role in prompting an increase in transaction fees, altering network parameters and ramping up the amount of energy required to execute smart contracts.
Furthermore, the dynamic energy model, enabled earlier this year as part of TIP-474, focuses on increasing transaction costs and disincentivizing low-value smart contract transactions, without affecting other applications. This model resulted in increased revenue generation in TRX and increased the circulating market cap of TRX by 18.1% QoQ.
“The Dynamic Energy Model and increased requirements for Energy resulted in greater revenue generation in TRX (total transaction fees paid in TRX), which increased by 65.5% QoQ (+87.7% in USD). Simultaneously, the circulating market cap of TRX increased by 18.1% QoQ.”
Tron DeFi, Stablecoin Space
In the first quarter of the year, the Total Value Locked (TVL) denominated in USD increased by 18.8%. TVL denominated in TRX, on the other hand, experienced a minor slump of 0.5%, signaling that “an asset price increase in USD drove TVL rather than new capital inflow.”
Top protocols by TVL on the Tron network, JustLend and JustStables, also benefited from the broader market recovery throughout Q1, increasing by 26% and 21%, respectively.
Tron’s position in the stablecoin landscape remains substantial as it trails behind Ethereum. The platform is also ahead of other rival chains with regard to the market cap of hosted stablecoins. It held more than $43 billion at the end of Q1, up from nearly $33 billion QoQ. Tron’s USDT market cap also increased by 30% to $10 billion QoQ, thanks to Tether swapping $400 million USDT from ERC-20 to Tron.
