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Tron just can’t seem to help itself from paying people to use its blockchain. Its latest move is to incentivize users to transition away from the widely used stablecoin (USDT) created by Tether for use on the Bitcoin network, and towards Tether’s Tron-based version (TRC-based USDT,) on the Tron network, by offering a whooping 20% interest rate.
In a press release today, Justin Sun, Tron’s founder, spoke about his latest ploy: Tron is “offering some amazing early incentives, totalling the equivalent of $20 million (USD), to get existing USDT holders to transition to TRC-based USDT.” Sun added that the USDT-TRON will “greatly enhance TRON network’s liquidity.”
But why should we believe what Sun says? His platform has a long history of throwing money around in its quest to onboard more users. This latest ploy comes just shortly after it offered large incentives for Ethereum developers to jump ship and switch teams. It also comes just a couple weeks after Sun announced his plans to give away $20 million, and to reward one lucky person with a brand new Tesla. But are all these incentives and rewards truly the result of Sun’s unbridled generosity and are they worth having in the first place?
Earlier this month, Tron announced a partnership with the British Virgin Islands-based Tether, in order to introduce USDT to the Tron blockchain—it’s a partnership that many see as a match made in heaven, as both platforms have had their fair share of controversy.
To encourage users to convert to the new USDT-TRON, Tron is providing an alluring 20% interest rate to anyone who converts on the Huobi or OKEx exchange between April 30 and the end of May. After that, the interest rate will gradually decrease on a weekly basis through the end of June.
The use of such incentive mechanisms has brought Tron significant numbers of users, investors and developers, propelling it to 10th place in the largest cryptocurrencies by market cap. But could the platform have succeeded on its own merits?
The blockchain only had one app, Tronbet, with any significant volume, before it began offering developers massive incentives. Now, according to Dapp Review, Tron’s transaction volume is surging. On March 16, it had more than five times the volume of both Ethereum and EOS.
Although that’s impressive, the incentives Tron has offered developers, through programs like Tron Accelerator, may have played a huge role in this growth. We’d go so far as to suggest that it’s unclear whether anyone would actually use the blockchain if it weren’t for Sun’s inventiveness on the incentive front.
Compared to competing blockchain platforms like Digibyte, Tron’s approach appears grandiose. Digibyte launched with no marketing fund, no massive ICO fundraising, yet it is simultaneously advancing its platform and growing a large community base via a grassroots movement. When platforms like Digibyte seem adept at growing organically, it makes one wonder what is truly driving Tron’s success.
Could Tron’s incessant need to throw money around be a sign of confidence, or a dire warning of growing desperation?