Tron Network Records 2.93% Deflation Rate as TRX Supply Shrinks Significantly  

• Tron’s deflation rate has hit 2.93%, driven by a significant reduction of 2.41 billion TRX in circulation over the last 12 months.  
• Tron’s burn mechanism is designed to reduce inflation by requiring users to burn TRX when network bandwidth is insufficient.  
• SunPump’s meme coin craze helped boost Tron’s network activity, generating 35 million TRX in fees before experiencing a sharp decline. 

Tron (TRX), the ninth-largest cryptocurrency, has reached deflationary status this year. Over the last 12 months, the total TRX supply has decreased by 2.41 billion tokens, equating to $381.2 million at the current price. The total circulating supply now stands at 86.56 billion, down from 88.97 billion, marking a significant 2.93% deflation rate.

Network Burn Mechanism Explained 

This deflation is driven by Tron’s burn mechanism, where users must burn TRX tokens to pay for network resources when bandwidth is insufficient. This process, similar to Ethereum’s EIP 1559, aims to reduce inflation and prevent the overuse of network resources. As more transactions occur, more TRX is burned, thus reducing the total supply over time.

Meme Coin Craze Boosts Activity

Increased activity on the network can be attributed to the rise of SunPump, a no-code meme coin launcher. The platform has seen over 90,000 meme coins created, contributing to higher transaction volumes. According to Dune analytics data, SunPump generated 3.6 million TRX in fees daily, with the total network fees nearing 35 million TRX.

While the SunPump platform’s activity has dropped by over 99% in recent months, it still draws meme coin traders and enthusiasts. To revive interest, the team has introduced an 888 TRX airdrop campaign, which aims to attract new projects and users.

TRX Price Movement

In terms of price, TRX is attempting to hold above the $0.16 mark, showing a modest 1.86% increase in the past 24 hours. However, trading volumes have significantly decreased, reflecting a more cautious market sentiment.

Justin Sun, Tron’s founder and now prime minister of the Liberland free territory, believes this trend will continue. He has expressed confidence in the ongoing deflationary process, which he expects to play a crucial role in maintaining the value of TRX.