Should You (or Anyone) Buy Tron (TRX)?

Tron's price has only fallen by 8% since the start of the year, and at points it has increased where the rest of the market was dropping
Key points
Tron's algorithmic stablecoin pushed its price up, but also made it a riskier proposition.
Tron is a well-known crypto that has already weathered one crypto winter.
Its founder is a controversial figure who has attracted his fair share of critics online.
Tron (TRX) attracted headlines earlier this year as one of the few cryptocurrencies that increased in price when much of the market was falling. Indeed, Tron's price has decreased by just 8% since Jan. 1, while market leader Bitcoin (BTC) has fallen by over 50%. It's also one of only a handful of cryptocurrencies that have held onto their position as a top 50 crypto for several years. However, Tron didn't reach new highs in last year's crypto frenzy and has also attracted its share of critics.

Tron is a smart contract crypto with a mission to "decentralize the web." It's focused on the entertainment industry, as shown by the Tron Foundation's acquisition of file sharing platform BitTorrent in 2018. However, there are also several decentralized finance products on Tron's ecosystem.

Here's a quick overview of Tron:

What it is: The governance token for the Tron network
Management team: Founded by Justin Sun, who remained as CEO of the Tron Foundation until last year
Date launched: Initial coin offering in 2017 and TRON testnet launch in 2018
Market cap: $6.4 billion (CoinMarketCap, July 2022)
Availability: Some, but by no means all major U.S. cryptocurrency exchanges.

                             Should you buy?

Tron is one of many cryptocurrencies that's been touted as an alternative to Ethereum (ETH). On the plus side, it has a relatively long track record. More established cryptocurrencies are often better positioned to survive long term than those that only recently arrived on the scene. According to DeFi Llama, Tron is also currently the biggest crypto in terms of the amount of money deposited on its blockchain. However, a large proportion of the cash comes from its USDD stablecoin, which is one of several reasons to be cautious about Tron.
The USDD algorithmic stablecoin
At first glance, TRX's strong performance in a falling market this year is a positive. The challenge is that the main driver for its price gains was the launch of an algorithmic stablecoin. These are somewhat of a holy grail for the crypto industry, as everybody wants to launch a fully decentralized stablecoin. But -- as we saw with Terra's UST earlier this year -- some have failed spectacularly.

Unlike fiat-backed stablecoins that should have money in the bank to support the tokens they issue, algorithmic stablecoins use computer code to maintain their price. The attraction is that they are decentralized, so they don't rely on a third party. Unfortunately, the risk is that things could spiral out of control if they lose their pegs and investors could lose their money.

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