TRON To Gift 30 Million TRX to Ethereum (ETH) Users
TRON (TRX)–TRON has had an exciting month.
The currency is up nearly 110% since the start of April, with most of the growth coming within the last week. While all of cryptocurrency is benefiting from the resurgent price in Bitcoin and renewed interest in the market, TRON is posting one of the largest gains over that timespan. TRX is also coming off the successful Test Net update at the end of March, which served as a prelude for May’s official Main Net launch.
Billion Dollar Investment and AirDrop
In the midst of all this positive news for TRX, Justin Sun and the TRON foundation made two stunning announcements. The first involved the creation of a 2 billion USD investment fund, designed to reward developers in TRON and spur further innovation. Ripple created a similar stir two weeks ago with a 25 million USD investment into Blockchain Capital, a fund designed to recognize and accelerate cryptocurrency startups. TRON’s fund will target TRX developers directly, providing greater incentive to develop on the upcoming TRON network, in addition to giving the currency greater exposure in the industry of crypto.
The TRON Foundation also made a somewhat bizarre announcement that they would be “gifting” via airdrop 30 million TRX coins to current Ethereum holders. At first, most of the TRON community thought it was an error in translation on behalf of Sun, and that the airdrop would really be targeting TRX addresses. However, the airdrop is indeed intended for all Ethereum wallets holding over 1 ETH at the start of 2018. Ethereum addresses that qualify will be receiving a randomized amount of TRX between 10 – 100 coins.
Gifting TRX as a Marketing Strategy
While fork-produced coins and air drops have become fairly common in cryptocurrency over the past year, a Foundation-endorsed gifting of coins to a potentially rival currency is a bit of an anomaly. TRON’s AirDrop to Ethereum may be the first time that a crypto has given free coins, previously unannounced, to a currency that has the potential to be a rival in terms of technology.
Justin Sun has framed the ETH airdrop as a thank you to Ethereum and Ethereum holders for hosting TRX during its transition to Main Net, but the move creates substantial benefits for TRON valuation and adoption, at least from a marketing standpoint:
- Getting a foot in the door with ETH holders.
Despite the relationship between TRON and Ethereum as an ERC-20 token, the two currencies will be on diverging paths following the Main Net update. By gifting TRX to the Ethereum community, TRON has the potential to gain new users on the emerging platform, or at least create a cohort of crossover investors. At 0.05 USD apiece, 10 – 100 TRX is not a significant amount of money, but it still makes ETH holders invested in the future of TRON, in addition to sparking an interest that would otherwise not be present.
- Broad publicity and brand building.
TRON has carved itself out as a contrarian to most of the market of cryptocurrency. While other coin groups are concerned with re-inventing digital money and the landscape of traditional fiat, TRON is attempting to disrupt the online entertainment industry by devising a new platform. Just Sun’s marketing has been criticized in the past for being overhyped. Gifting TRX to the Ethereum community is not only a headline-grabbing move, but also paints TRON as a distinction to the rest of the market: Justin Sun and the TRON Foundation are willing to take risks and think outside of the established box, a feature necessary to disrupt an industry as broad as entertainment.
- Avoiding a pump and dump.
At first, the Ethereum airdrop was met with confusion from the TRON community, as most thought TRON holders would be the recipient of the free coins. However, there is a distinct problem with the TRON Foundation gifting coins to its user base: it creates the conditions for inflation and/or pump and dump. If TRON were to announce an airdrop coming to TRX holders (let’s say any wallet with over 1000 TRX) following the launch of Main Net, it would create a positive price run for investors looking to get free coins. The aftermath would be similar to other airdrops, and the price of TRON would tank back to pre-announcement levels. Sun and the TRON Foundation are avoiding creating any sort of empty hype in their currency by targeting the users of a different cryptocurrency, in addition to making the airdrop retroactive to wallet balances at January 1, 2018.
In all, the Ethereum airdrop is more than just a marketing strategy to get TRON into headlines. It also opens the door to greater interest and investment in TRX through broader appeal, and could serve as the basis for more cryptocurrency circulation in the future.