Tron: Coin Burn

*This blog is based on the current information that is readily available. Please do not use this as financial advice. Always do your own research before making investment decisions.

The question that gets brought up about Tron $TRX the most (aside from “When Moon?”) is “When is the coin burn and how much will be burned?” If you search the internet, there is very little, if anything, confirming Tron’s potential coin burn. This all stemmed from two pieces of information I was able to find. One being the Justin Sun live stream where he announced the coin burn and another being his retweet of someone talking about the coin burn. Other than that, there isn’t a ton of information out there that discusses this. The tweet just mentions a coin burn in Q1 to reduce the supply, so it is not very helpful. The video, however, is often overlooked as Justin explains exactly the type of coin burn he plans on using and should have answered a lot of questions for Tron holders. Below is a 40 second clip of him explaining the coin burn.

 

In the video, Justin discusses the coin burn of Tron being similar to that of Ripple $XRP. For anyone not aware of XRP’s coin burn, it is/was not a massive burn-off like what you saw with Binance’s $BNB coin. Meaning, Ripple did not sit down at a computer and with one push of a button, eliminate a large supply of coin. XRP’s coin burn is a slow burn off of fractions of coin per transaction, which is mainly used to prevent spamming of the network, not to cause deflation by lowering the total supply. Based on what Justin says here, I have to believe that the planned coin burn will be very similar (albeit Justin does say that it will be a better version, saying Tron’s will be a better rate since XRP’s is much slower), and that you will see Tron’s burn come in a form of a code written into their platform that will cause fractions of coins burned per transaction. I have seen quite a few calculations of XRP’s burn and the amount of coin burned per transaction tends to be anywhere from 0.00001 to 0.006, either way, it’s a fraction amount and would take many transactions, many years to add up. No matter what the fractional amount is, the thing to keep in mind is that this is how Ripple does their coin burn, in small increments, not as a massive one time burn. That’s the important thing to remember. To view Ripple XRP’s supply in real time, click the link below and watch the Total XRP in the Ledger Stats.

XRP Coin Burn

Now the question of when. So we have all heard end of Q1, which led many to believe that by March 31st, the coins would be burned, but since we are now going with the slow Ripple burn concept, this means the burn mechanism needs to be written into the code. Which means that it would have to be launched during testnet or mainnet. Testnet launches March 31st, so that deadline matches up, but again, it is a test and not on the mainnet platform so it would not affect any of the supply. This leads me to believe that the coin burn function will be written into the mainnet and therefore launched on May 31st. Considering this is not an immediate coin burn, whether it was March 31st or May 31st, it really doesn’t matter as I don’t see it having an immediate impact on supply.

I write and share this in hopes of preventing any FUD when the time comes for a coin burn and it does not go as planned or predicted. I want Tron holders to be prepared in case this is how the coin burn will run and they do not get their hopes up for a large scale coin burn that does not happen. That is the kind of thing that would create FUD and panic selling. By having this in the back of your mind, you will be prepared in case this is what happens, which, according to the video by Justin himself, seems to be the likely case. If for some reason the coin burn format changes, then great, we’ll be ready for that as well, but since we have not had any other information presented, we need to be realistic about what is likely going to happen and prepared to handle any FUD that comes our way. Again, I believe Tron will notify holders to let us know how exactly the burn will work and when it will happen, but for those that have been continually asking about it, hopefully this helped clear up some questions you may have had.

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