On a proportional basis, TRON punches above its weight when it comes to stablecoins such as USDT.
Although the majority of stablecoins utilize Ethereum, Tron has established itself as an alternative stablecoin platform. The Tron platform is significantly smaller than Ethereum by total users and market capitalization. However, it is competing pretty closely in stablecoin usage. To date, Tether has a $32 billion market capitalization, and over a third of all available USDT is on the Tron platform.
Users Want a Cheaper Transactional Alternative
Most decentralized applications and stablecoins were running fine on the Ethereum transaction until very recently. They still are operational, but the growth in defi usage is affecting throughput. Ethereum blocks are getting clogged with transactions. Users now have to pay exorbitant fees in order to interact. These fees recently clocked out at an average of over $20 per transaction, a new record for Ethereum.
More people are discovering blockchain. However, they don’t necessarily want to spend obscene amounts of money to interact on it.
Tron is popping up as an Ethereum alternative. Launched in 2017 by Justin Sun, Tron is an alternative smart contract platform. Ethereum is literally fifty times larger than Tron, with millions of more active users, but people have realized Tron is a viable USDT storage alternative.
Offering negligible fees of a few cents, more USDT is flocking to Tron. USDT on the platform now totals close to $12.5 billion. This is a substantial amount when considering both projects’ market capitalization. The volume testifies to what’s possible when Ethereum bogs down and established smart contract platforms can offer more efficient transactions.
Why Stablecoins Are so Important
Stablecoins came into existence in 2014 with the creation of USDT. Stablecoins offer a crucial use case in the blockchain ecosystem. They are usually backed by a physical asset or pegged to a specific price point. Stablecoins provide users all the benefits of blockchain technology, such as decentralized, permissionless, borderless monetary access, but without the massive price fluctuations of speculative cryptocurrencies.
Crypto offers a new means of financial sovereignty for users. However, someone looking to preserve their wealth may not be able to trust Bitcoin or Ether, which could easily drop 20 percent or more in one day.
These problems set the pace for stablecoins, which offer a non-volatile store of value. The most popular stablecoins, like USDT and USDC, are one-to-one pegged to the US dollar, meaning each coin will always be worth $1. This guaranteed price stability has created an excellent transfer tool and a buffer for traders looking to displace volatility without exiting the entire cryptocurrency market.
These types of currencies can be especially compelling to the unbanked and disenfranchised, giving them access to a stable, easy to purchase currency for the first time. As blockchain tech continues to spread across the globe, more people will utilize stablecoins. Tron is working to cement itself as one of the preeminent stablecoin transaction platforms.
The post Tron Tops Ethereum in USDT Usage Proportionally appeared first on BeInCrypto.