Tron [TRX] seems to be rallying on the back of good news but here’s the caveat
Whether you call it TRON [TRX] or TRON DAO, you have to admit that the coin – or founder Justin Sun – is always up to something interesting. So, naturally, on a day when many top alts were still in the red, TRX grabbed a lot of eyeballs thanks to its 16.38% rally in the last week.
Changing hands at $0.0721 at press time, TRX also climbed by 7.66% in the last 24 hours.
So what’s driving all the excited bulls?
A T[r]on of drama
If there’s one piece of news that dominated headlines where TRON is concerned, it’s the upcoming launch of USDD or “Decentralized USD,” which claimed it will be “the most decentralized stablecoin in human history.”
? Only 3 DAYS left to #USDD official launch!
USDD will propel #stablecoins to enter a new era where mathematics and algorithms lay the foundation for financial accessibility and stability in a decentralized manner. ??#TRON @trondao @trondaoreserve pic.twitter.com/9za2mte5Ne
— USDD (@usddio) May 2, 2022
That’s not all, as TRON also announced plans to build a TRON DAO reserve, or in its own words, “the blockchain industry’s first decentralized reserve.”
The hype surrounding these developments can help explain the sudden movements in TRX’s price. While investors might be enjoying the ride, for now, it’s important to remember that once the hype evaporates, sentiments can quickly tumble and take prices along with them.
What’s more, price isn’t everything when it comes to a project. If you need more proof, take a look at the development activity on TRON. Overall, there has been a decline in this metric since late 2017, which is far from a healthy sign for the project’s long-term growth. While there are occasional spikes in development activity, you can see that the metric has been slipping downwards rather than climbing up.
This is a strong sign that developers may be investing their energies elsewhere.
Anatomy of a scandal
TRON founder Justin Sun admittedly had a PR crisis on his hands after a March 2022 article which was published in The Verge and written by Christopher Harland-Dunaway. In it, the journalist quoted anonymous sources to allege that Sun possibly violated China’s ICO ban, was ready to falsify KYC data, and that there were plans to pump TRX’s price by using whales.
Since then, however, TRON has moved from being the 24th biggest crypto by market cap to the 21st. For his part, Sun was busy promoting “the most decentralized stablecoin in human history” on Twitter.