Tron’s Balancing Acts: USDT Dominance Peaks as DeFi Experiences a Renaissance: Report

Stablecoin total value locked (TVL) on the Tron blockchain experienced a slight decline in the early part of the second half of 2023 but ultimately surged to reach record highs of approximately $48 billion.

This is according to a recent report by Reflexivity, which revealed that around 94% of this total value belonged to USDT.

Tron Emerges as Top Choice for USDT

Reflexivity Research stated that Tron has maintained its position as the leading blockchain for USDT, surpassing the Ethereum mainnet by approximately 8% in terms of TVL.

Tether, among the earliest fiat-backed stablecoins in the crypto market, initially launched on Bitcoin’s Omni chain, later expanded to Ethereum, and is currently predominantly present on Tron and Ethereum.

A noteworthy distinction lies in the composition of stablecoins on Ethereum, which exhibits a more balanced mix of USDT and USDC on-chain, while the former overwhelmingly dominates the Tron ecosystem.

This dominance is further evident in Tron contracts, where the USDT Token contract consumes the majority of on-chain “energy,” accounting for approximately 95.6% of all contracts. This suggests that Tron is primarily utilized for USDT transactions with limited diversification.

Despite a moderate increase in USDT volume throughout 2023, a particularly intriguing trend is the 130% growth in the number of USDT holders over the same period, according to data compiled by TronScan.

Tron’s DeFi Renaissance

The Tron ecosystem witnessed back-to-back exploits. Justin Sun-acquired crypto exchange Poloniex was hacked in November last year. Attackers reportedly stole nearly $125 million after breaching the hot wallets.

Weeks later, crypto exchange HTX and blockchain protocol Heco Chain were compromised for a cumulative $97 million in different digital assets.

Despite this, Tron’s decentralized finance side of things remained stable.

Citing data from DeFiLlama, Reflexivity observed that the TVL in DeFi on the Tron blockchain witnessed a growth of approximately 43% throughout the second half of 2023, reaching a total of around $8.1 billion.

This increase solidified Tron’s position as the second-highest protocol in terms of TVL, trailing behind Ethereum with approximately $29 billion and surpassing Binance Smart Chain (BSC) with $3.1 billion. The ascent was primarily led by the leading DeFi protocol, JustLend, which contributes to approximately 80% of the total TVL on the Tron network.