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Tron: Explaining the sudden spike in demand for the network

2min Read

Tron’s TVL inches close to double digits as demand for the network surges.

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  • Tron’s TVL now sits at a new all-time high.
  • Daily fees and revenue on the network recently climbed to a multi-year high.

The total value locked (TVL) across the decentralized finance (DeFi) protocols housed within the Tron network [TRX] has reached a new all-time high, according to data from DefiLlama

In the last month, Tron’s TVL grew by 19% and by 16% on a year-to-date (YTD). The TVL growth on the blockchain comes amid a recent surge in new demand for the network. At press time, the chain’s TVL was $9.36 billion.

Tron TVL

Source: DefiLlama

AMBCrypto reported earlier that the hike in the new adoption ratio on Tron since the year began caused the count of its non-zero balance address to rally above 95 million, towering above other Layer 1 (L1) networks such as Cardano [ADA] and Avalanche [AVAX].

The surge in network activity was reflected in the growth in TVL across 19 protocols out of the 20 housed within the Tron network in the last month, per DefiLlama data. 

With the last month marked by significant user activity on Tron, daily transaction fees and revenue also climbed to their highest level in three years on 28th February. 

Data tracked by Artemis showed that fees paid by Tron users to process their transactions on that day and the revenue derived from the same totaled $2 million. Tron’s fees and revenue have climbed by 119% on a YTD basis. 

TRX remains untethered to swings 

At press time, the coin’s native coin TRX traded at $0.14. While leading coins Bitcoin [BTC] and Ethereum [ETH] have seen significant upticks in their values in the last week, TRX’s price has only increased by 1% during that period, according to CoinMarketCap

However, the sharp rise in the values of these assets came with a risk of severe price swings. TRX, on the other hand, appeared not to be prone to that, as an assessment of its price movement on a 12-hour chart revealed.

AMBCrypto observed TRX’s Bollinger Bands (BB), a key market volatility indicator, and found that the gap between the upper and lower bands of the indicator remained narrow. 

A narrow gap between the upper and lower bands suggests a period of low volatility in the price of the asset.


Realistic or not, here’s TRX’s market cap in BTC terms


This was confirmed by its Average True Range (ATR) indicator, which measures market volatility by calculating the average range between high and low prices over a specified number of periods. 

It has trended downward since 18th February, suggesting a decline in market volatility. At press time, TRX’s ATR was 0.00197. 

TRX/USDT 12-hour chart

Source: TradingView

 

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Abiodun is a full-time journalist working with AMBCrypto. He is also a lawyer with over 2 years of experience. With a keen interest in blockchain technology and its limitless possibilities, Abiodun spends his time understanding the technology, building projects, and educating people about it.
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