Tron votes to lower network fees by 60% as competitors circle

Tron, the blockchain founded by crypto entrepreneur Justin Sun, will lower its fees by 60% after the cost to use the network doubled over the past year.

On Friday, the proposal to cut fees passed a vote among the network’s block producers, also called super representatives.

“In the short term, Tron’s profitability will be affected, since network fees are directly reduced by 60%,” Sun said in an X post announcing that the vote had passed. “However, in the long run, profitability will improve as more users and more transactions take place on the Tron network.”

The move comes after transaction fees on Tron soared to an all-time high in June. TRX, the network’s native token, which is used to pay transaction fees, has rallied 126% over the past year.

Staying competitive

Tron is the most popular blockchain for Tether’s USDT stablecoin, with almost $81 billion riding on the network, per DefiLlama data.

While the majority of USDT trading volume comes from rich users who hold many millions of dollars worth of crypto, the stablecoin is also popular with users in developing countries. This demographic uses USDT and other stablecoins as an alternative to unstable local currencies for everyday payments.

“The popularity of Tron is 100% mixed up with the popularity of Tether,” Nader Dirany, co-founder of brokerage Buy Bitcoin Lebanon, told DL News in 2023.

So when Tron’s transaction fees increased over the past year, many of these users got priced out of using the network.

“The fees on Tron have been rising tremendously, so people are looking at alternatives,” Aishwary Gupta, global head of payments and RWAs at Polygon Labs, told DL News in July.

Lowering Tron’s fees should help it remain competitive for everyday stablecoin transactions.

The move also comes as Tether sister company Bitfinex prepares to launch Plasma, a stablecoin-focused blockchain which will offer users free USDT transactions.

Several analysts told DL News earlier this month that Plasma could threaten Tron’s position in the stablecoin market.

Sun said Tron’s super representatives will conduct quarterly reviews of Tron’s network fees in the future.

“Factors such as TRX price fluctuations, network activity levels, and growth rates will be considered when setting fees, ensuring a balance between Tron’s profitability and competitiveness,” he said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.