Everyone can see what the memecoin market is like. The year 2024 is a charge of all kinds of memecoins on Solana. Tron decided to take up the gauntlet and quickly began to catch up with Solana. Thanks to this, it managed to attract the attention of not only investors, but also, above all, memecoin supporters. Interestingly, Rafał Zaorski warns against TRX, comparing it to Luna. Is it really such a risky investment?
The Tron Enters the Game
In the cryptocurrency world, Tron (TRX) has been gaining attention recently, especially in the memecoin space. In the past few months, the ecosystem has attracted the attention of not only investors but also memecoin creators and enthusiasts. While TRX was originally designed as a platform for creating decentralized applications (dApps), its current share of the memecoin market could fuel further growth in the value of this cryptocurrency. However, as is often the case in the cryptocurrency world, short-term gains do not always go hand in hand with long-term stability. According to respected trader Rafał Zaorski, TRX could repeat the fate of Luna in the long term, making it a risky option for long-term investors.
Well, let’s start from the beginning. The Tron network was launched in 2017 by the Tron Foundation (founded by Justin Sun). The blockchain platform aims to create a free, global, and direct decentralization system for the internet. However, recently, TRX decided to strategically engage with memecoins to increase network activity, user engagement, and overall adoption of its blockchain. A smart move that fits perfectly with the memecoin trend that is present in 2024.
Tron and its growing share of the memecoin market
The TRX ecosystem has gained a reputation for being an attractive platform for memecoin projects due to its speed and low transaction fees. It allows tokens to be created and traded with minimal costs, which is especially important for memecoins, where transaction volumes can be high but the value of individual transactions is usually low.
The rise in popularity of memecoins on Tron could directly affect the TRX price. Each new memecoin on the platform increases the demand for TRX, which is used to cover transaction costs and create new tokens. As a result, as more and more memecoins appear on Tron, you can expect the TRX price to rise.
It is worth noting that Justin Sun, the founder of Tron, launched the SunPump platform to facilitate the creation of memecoins. In the three weeks since its launch, almost 60,000 new tokens have been created on the platform. Despite initial success, growth has slowed, which may indicate a loss of momentum. Despite doubts about the effectiveness of the strategy, the TRX token has experienced a significant price increase of over 25%, suggesting that the market believes in the potential of memecoins to drive further development of the ecosystem.
New Solana?
Tron is trying to emulate Solana’s success with memecoins, but the approach is slightly different. TRX’s focus on artistic expression and storytelling in memecoins could help it carve out a niche in the market. However, organic community adoption of memecoins, rather than top-down coercion, is key to its continued success.
Short-term profit vs. long-term risk
While the potential increase in TRX value as a result of the growing memecoin market is enticing, it’s worth considering the risks associated with long-term ownership of the cryptocurrency. According to Rafał Zaorski, TRX could follow the path of Luna, a cryptocurrency that crashed spectacularly after a period of rapid growth. Zaorski emphasizes that while TRX can be profitable in the short term, long-term investment in TRX comes with significant risk.
Zaorski points out several key factors that could contribute to Tron’s problems in the future. First of all, the Tron ecosystem, despite its growing popularity, is still largely dependent on user trust and the speculative nature of the cryptocurrency market. If interest in memecoins weakens, Tron could lose a large part of its value, similar to what happened with Luna. There are serious risks associated with the Tron ecosystem, including the controversy surrounding Justin Sun, accusations of money laundering and fraud, and uncertainty about the stability of the USDD stablecoin. These factors could negatively impact the perception and development of the memecoin market on Tron. It is also worth noting that many memecoin launches on Tron are typical pump and dump.
What could the future of Tron look like?
The future of this ecosystem is diverse. In the short term, if the memecoin market continues to grow, Tron could continue to grow. However, it is worth remembering that memecoins are often created and promoted by speculators, which means their value can be very volatile. A great example is the celebrity memecoin craze, which caused real chaos among digital asset investors in Q2 and Q3 of this year. This is all because scammers were impersonating celebrities, who in turn wanted to release their own memecoins.
In the long term, it will be crucial whether TRX can transform its ecosystem from a platform that is primarily a home for memecoins into a more comprehensive network supporting a variety of decentralized applications and projects. If the ecosystem fails to expand its offerings and attract more serious projects, it may end up suffering a fate similar to Luna’s – a spectacular rise followed by an equally spectacular fall.
