Blockchain & Cryptocurrency Glossary

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TRX

2 min read
Pronunciation
[tee-ar-eks]
Analogy
TRX functions like the official currency in a digital entertainment district. Just as visitors would use the local currency to pay for admission to attractions, vote for community improvements, and stake their claim as district residents, TRX is used to pay for network resources, vote for validators, and establish user status within the Tron ecosystem.
Definition
The native cryptocurrency and utility token of the Tron blockchain network, used for transaction fees, smart contract execution, voting for network validators, and as the primary medium of exchange within the Tron ecosystem.
Key Points Intro
TRX serves as both the economic fuel and governance token for the Tron network.
Key Points

Used to pay for transaction fees and smart contract execution costs.

Can be frozen (staked) to gain voting rights and bandwidth resources on the network.

Serves as the main cryptocurrency for applications built on the Tron blockchain.

Initially launched as an ERC-20 token before migrating to Tron's mainnet.

Example
A user wanting to participate in Tron-based decentralized applications needs TRX to pay for transaction fees. Additionally, by freezing (staking) 10,000 TRX, this user can vote for Super Representatives they believe will best operate the network and receive rewards from those validators in return.
Technical Deep Dive
TRX implements a unique resource model within the Tron ecosystem: Users can freeze (stake) TRX to obtain two types of resources: Bandwidth Points for standard transactions and Energy for smart contract execution. The allocation is proportional to the amount frozen relative to the global frozen supply. This approach creates an alternative to direct fee markets like Ethereum's gas pricing. TRX has a total supply of approximately 100 billion tokens, with a portion burned through network transactions. Inflation occurs through block rewards distributed to elected Super Representatives, who typically share these rewards with users who vote for them. Token economics include a mechanism called TRON Power (TP) which represents frozen TRX that grants voting rights at a 1:1 ratio. The staking/freezing process has a minimum duration (typically 3 days) after which tokens can be unfrozen. TRX tokens conform to the TRC-20 standard on the native Tron blockchain, though wrapped versions exist on other networks to enable cross-chain functionality.
Security Warning
Exercise caution when participating in TRX staking or freezing mechanisms, as tokens become temporarily illiquid during the freeze period. Also, verify you're using official Tron wallets and tools, as the popularity of TRX has made it a target for phishing attempts and fake wallet applications.
Caveat
While freezing TRX provides network resources and voting rights, it creates opportunity costs by temporarily removing tokens from circulation. Additionally, the economic value of bandwidth and energy resources fluctuates based on network demand, creating potential inefficiencies in resource allocation during usage spikes. The governance utility of TRX is also limited by the concentrated structure of Super Representatives, who have significant influence over protocol decisions.
Related Terms
Tron

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