As a step toward building this network, the TRON Foundation bought peer-to-peer file sharing company BitTorrent in 2018. TRON has since launched BitTorrent Token (BTT -1.45%), which is designed to expand its protocol and incentivize its use.
The TRON team also wants it to be the most flexible blockchain platform that can run smart contracts. For that reason, the TRON Virtual Machine (TVM), where developers can build dApps on TRON, is compatible with the Ethereum Virtual Machine (EVM). There are plans to add compatibility with other virtual machines in the future.
TRON is also making inroads into the decentralized finance (DeFi) landscape with the JUST Network, a TRON offshoot that includes a package of smart contract-based financial projects.
Where TRON came from
Justin Sun, a Chinese tech entrepreneur, created TRON and the TRON Foundation, which manages the project. Starting in August and lasting through Sept. 1, 2017, the TRON Foundation raised $70 million with an initial coin offering (ICO). This was only days before China banned ICOs, and Sun left the country about a week later.
TRON launched its testnet in March 2018 and its mainnet two months later. In March 2018, TRON started out as an ERC-20 token on the Ethereum blockchain, but it transitioned to its own blockchain three months later.
How TRON works
TRON uses a three-layer architecture with a core layer, storage layer, and application layer. Here's how these three layers work:
- The core layer performs the main fundamental tasks for the blockchain. This includes validating transactions, managing accounts, and reading smart contracts. It uses the Solidity smart contract language, which was originally developed for Ethereum.
- The storage layer is built to handle complex data storage. It's segmented into blockchain storage and state storage.
- The application layer is used by developers to build dApps and customized wallets. There's a diverse range of applications that can be created since TRON supports smart contracts.
To validate transactions, TRON uses a delegated proof-of-stake consensus mechanism, a variation on the proof-of-stake model. Proof of stake is a popular, energy-efficient alternative to the original proof-of-work model introduced by Bitcoin (BTC +0.58%).
In TRON's delegated proof-of-stake system, TRX holders can stake their tokens, meaning they're pledging those tokens as collateral. This gives them the right to vote for “super representatives,” who will validate transactions. Votes are counted, and super representatives are chosen every six hours.
Super representatives receive blocks of transactions to validate. For each block, each super representative receives a block reward and a vote reward, both of which are shared with the super representative's voting "partners" according to their voting ratio.
