TRON Foundation unlocks 33 billion TRX tokens, triggering concerns of a sell-off across the board

One-third of the total supply of TRX tokens on the Tron network, accounting for half of the current circulating supply, was unlocked on New Year's Day, valued at over $4 billion at the current price. There are concerns across various sectors that this move may once again impact the already sluggish price of TRX.

In December 2017, six months before the official launch of the TRON mainnet, a large amount of TRX tokens were quietly locked by the TRON Foundation in the name of "protecting the interests of project supporters."

Now, the unlocked funds are once again returned to the largest TRX holder - the TRON Foundation. At the current price, the unlocked 33.25 billion tokens are worth approximately $445 million.

A report pointed out that the TRON official community channels rarely mention the unlocked tokens, possibly because this action could have a negative impact on the token price. Nevertheless, the TRON Foundation still has the option to re-lock the funds or burn them to maintain the overall market value.

However, the worst-case scenario is that the unlocked tokens may be used for "ecosystem development," meaning giving the tokens to TRON-sponsored projects. Over time, these tokens may be sold by the projects as operational funds, thereby affecting their price.

Initial TRON Token Allocation

According to the TRON whitepaper, the total supply of 100 billion TRX tokens was allocated as follows:

• • Crowdsale ICO - 40 billion
  • TRON Foundation - 35 billion
  • Token private sale - 15 billion

• Payment to "Peiwo" App - 10 billion

In June 2018, to celebrate the TRON mainnet launch and officially move away from the ERC20 token standard used during the ICO period, TRON CEO Justin Sun announced the burning of 1 billion tokens from the TRON Foundation.

A week later, the remaining 33 billion tokens were distributed to 1,000 different addresses, claiming to reduce the risk of hacking. However, this also made it more challenging for the community to track the future movements of these funds.

Possible Impact on TRX Price

In 2019, the TRX token's USD exchange rate dropped by 39%. The TRX/BTC exchange rate performed even worse, with a decline of nearly 67%.

There are many reasons for the token's poor performance, with the most notable being negative news related to its founder Justin Sun, including the failure to secure a charity lunch with Warren Buffett in 2019.

Prior reports also indicated that the new blockchain-based gambling game Just.game on the TRON network experienced a sharp decline in volume within the first 3 hours, seemingly losing the ability to attract users as Fomo3D did initially.

Further Reading

• Europol: Monero Transactions Untraceable
• Bitcoin Halving Market vs. Mining Difficulty

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