Tron Investors Need to Worry About Binance’s TRX Death-Grip
Binance appears to be using its TRX stockpile to vote for itself as a TRON Super Representative and then scoop up the majority of the TRON block rewards.
The TRONSCAN website reveals the No.1 TRON Super Representative (SR) to be Binance’s recently launched staking address. After launching mere days ago, the Binance address has already acquired 60% of all the votes in the TRON ecosystem.
Super Representatives oversee the TRON blockchain and collect block rewards in proportion to the number of votes they receive from other TRX holders.
But a check of which voters actually elected Binance to its role as lead SR reveals the answer to be none other than… Binance itself.
The address shown below accounts for over 99.9% of all of the votes the Binance SR received.
That address happens to be a Binance cold storage address, as confirmed by TRON founder and CEO Justin Sun in a tweet from June of this year. The wallet currently contains 14,611,405,198.46246 TRX, or roughly $191 million.
That means the people at Binance are using their own – and potentially their customers’ – TRX holdings to vote for themselves as the No.1 TRON SR, in order to siphon off the majority of the block rewards.
But wait, the story gets even more interesting…
Enter Justin Sun
On Sept. 27, TRON CEO Justin Sun released details of a proposed change to the way TRX block rewards are distributed. According to the graphic included in Sun’s tweet, the change would see TRX block rewards cut in half (from 32 TRX to 16), while rewards would simultaneously be increased by a factor of 10 for those SRs who acquire the most votes.
Curiously, this proposed change would only benefit one SR at the present time, and that’s Binance. What’s more, the change was proposed on Sept. 27 – about the time Binance announced the launch of its staking program.
As of the time of writing, the staking program does not advertise support for TRX.
Fast forward just a few days, and Binance’s death-grip on the TRON blockchain already appears air-tight. According to sources behind the scenes, the TRON SR community is apparently furious with this invasion of their blockchain by Binance. Due to Binance’s domination of the vote count, all other SRs will have their rewards cut in half, while theirs will increase many-fold if the protocol change goes ahead.
Noises from inside the TRON community suggest that dissenters will attempt to assemble a majority to down vote Justin Sun’s proposed protocol change. That appears to be the only solution given that they would otherwise be voting for at least a 50% reduction in their own incomes.
Could TRON Become Binance Chain 2.0?
A source behind the scenes at TRON summed up the ridiculousness of the situation by pointing out that Binance’s influence was such that TRON could soon become Binance Chain 2.0:
“They have enough votes to vote in 20 SR’s and basically start Binance Chain v2…”
Members of the TRON community have already alluded to the fact that Justin Sun takes a very hands-on approach with his project. A previous employee once suggested Sun’s influence was such that it fostered a severe lack of diverse thought within TRON’s headquarters.
If those noises are to be believed, then it’s tough to imagine that Sun isn’t aware of what’s currently taking place on his blockchain. Justin Sun and Binance founder CZ (Changpeng Zhao) have always been close, and have a history of helping each other out monetarily.
There’s no hard evidence of collusion, but it’s difficult to ignore the benefit that change would bring to Binance.
How Much More Can the Cryptocurrency Community Take?
Also this week Binance was embroiled in another controversy concerning bribery and extortion. DigiByte (DGB) founder Jared Tate says he was asked for $300,000 plus 3% of the entire DGB coin supply for the privilege of being listed on the exchange.
The largest exchange in the cryptocurrency space has imploded before due to unethical practices. How long until Binance becomes known as Mt. Gox 2.0?
Last modified (UTC): September 30, 2019 12:54 PM