A Lesson in Tokenomics: How TRON Controls TRX Price

Consensus-based monetary supply, makes it similar to a decentralized central bank.

Making crypto a stable store of value is a particular pain point for cryptocurrencies. While most projects remain committed to the principles of decentralization, TRON (TRX) has devised its own model to keep the price under control. This is an interesting case-study for the emerging field of tokenomics.

Crypto is – with exceptions – a decentralized and stateless entity or asset. Its value is market-determined; no central bank or institution stands in as its guarantor.

TRON governs itself through reaching consensus from its members. This is reached at different levels and consent is needed from the non-profit TRON Foundation, elected ‘super’ representatives, as well as active members of the TRON community.

This enables decision-making to remain decentralized but at the same time, effective. Although the actual money supply is determined through automated mechanisms, the long-term development of the ecosystem, which influences the TRX price, remains in the hands of the community.

The TRON network uses monetary mechanisms similar to those used by a central bank. Rather than leaving TRX tokens to the mercy of the markets, it can add and remove TRX supply to keep the price at a steady level.

TRX supply adjusts dynamically, equipped with both increased issuance and coin burn mechanisms. So the inflation and deflation of the tokenomy is determined by the dynamic adjustment in the market.

Spokesperson TRON

TRON and Tokenomics

TRX has been adopted by multiple crypto-payment outlets; five payment modules began accepting TRX tokens in August alone. Although primarily used to pay the network’s transaction costs, becoming used as an everyday payment method could radically alter the token’s price range.

An opportunity for riches for the lucky speculator, crypto’s volatility makes it a poor store of value. It can become volatile during periods of market disruption: the total market cap surged by 400% following an influx of new investors in the latter-half of 2017.