If in the previous article we called ERC-20 the “gold standard”, then TRC-20 is its pragmatic and incredibly popular counterpart. Essentially, TRC-20 is a technical standard for creating tokens on the Tron blockchain, which was developed as a direct response to high fees on the Ethereum network. It does the same thing as ERC-20, but faster and hundreds of times cheaper.
It is this simplicity and low cost that transformed it from “just another standard” into the main tool for millions of people around the world.
The Golden Age of USDT: How TRC-20 Became Synonymous with “Cheap Stablecoins”
The success of TRC-20 is inextricably linked to one asset — the USDT stablecoin from Tether. In 2019, when Ethereum fees began to bite significantly, Tether launched its stablecoin on the Tron blockchain. This was a turning point.
Users suddenly had a choice:
- Send $100 in USDT (ERC-20) and pay $15 in ETH fees.
- Send $100 in USDT (TRC-20) and pay less than 1 cent in fees (or even nothing if you have “energy” on the Tron network).
For traders, arbitrageurs, and especially for residents of developing countries using stablecoins as a store of value, the choice was obvious. Exchanges, one after another, added TRC-20 support for deposits and withdrawals, and the standard became widely adopted. It solved a specific, tangible pain point — exorbitant fees.
Under the Hood: “Inspired” by Ethereum
Why is TRC-20 so similar to ERC-20? Because the creators of Tron didn’t try to reinvent the wheel. The Tron blockchain was initially heavily “inspired” by Ethereum’s architecture and compatible with its Virtual Machine (EVM).
This was a brilliant business decision:
- Simplicity for developers: Any project with an ERC-20 token could issue it on the Tron network with minimal effort.
- Familiarity for users: Addresses on the Tron network, like on Ethereum, have a similar structure (only starting with the letter “T” instead of “0x”), which simplified integration into wallets and exchanges.
Tron achieved its speed and low cost through a different consensus mechanism — Delegated Proof-of-Stake (DPoS). While Ethereum has thousands of independent validators, Tron’s network security is provided by only 27 “super representatives” elected by TRX coin holders. This is faster and more efficient, but leads to the main compromise.
The Fly in the Ointment: The Price of Speed and Cheapness
There’s no such thing as a free lunch. The utilitarian convenience of TRC-20 comes at the cost of compromises in fundamental crypto principles.
- Centralization. The main criticism of Tron. A network governed by only 27 elected validators is far more centralized and vulnerable to collusion or pressure than Ethereum. You are trusting not a decentralized machine, but a small group of participants.
- Security. A direct consequence of centralization. A network with fewer validators is theoretically easier to attack.
- Ecosystem. Despite thousands of tokens, the DeFi and dApps ecosystem on Tron significantly lags behind Ethereum in terms of innovation and diversity. Most projects are clones of successful protocols from other networks. TRC-20 is primarily about transfers, not cutting-edge financial instruments.
Conclusion: TRC-20 is not an Ethereum killer. It is a brilliant example of how complex technology can be simplified and given to the mass user, solving their main problem — cost. It is a workhorse of the crypto market, an ideal tool for fast and cheap stablecoin transfers. But when it comes to maximum decentralization, security, and access to the most advanced DeFi protocols, the crown still belongs to its older sibling — ERC-20.
