As a partnership manager at TRON (yes I have a full time job and buidl on the side), I have constant conversations with various people in the industry covering what makes TRON a different L1 compared to other chains. There are several areas of focus but today I want to cover Energy on TRON. Let me explain what is energy, how it is used, and the current updates to the ecosystem.
When you deep dive into TRON and start interacting with smart contracts, you will see two keywords called Energy and Bandwidth. Energy and bandwidth are essential components of the TRON network that enable the execution of smart contracts and the transfer of TRX tokens. In simple terms, energy is used to execute smart contracts while bandwidth is used to transfer TRX tokens. Both energy and bandwidth are limited resources in the TRON network and are required to complete any transaction on the network.
Energy is consumed when executing smart contracts on the TRON network. Every smart contract has an energy cost associated with it, and the amount of energy consumed depends on the complexity of the contract. Think of gas and Gwei if you're more familiar with EVM chains. The amount of energy a user has is proportional to the amount of TRX they hold in their wallet. Therefore, to execute a smart contract, a user must have enough energy to cover the cost of the contract. Energy cost is the price of TRX and the computation of energy used by the smart contract. A cool fact is that users can also freeze their TRX to obtain additional energy, which allows them to execute more complex contracts.
Bandwidth, on the other hand, is used to transfer TRX tokens between wallets. Each transaction on the TRON network consumes a certain amount of bandwidth, which is proportional to the size of the transaction. The more bandwidth a user has, the more transfer transactions they can perform. Users can also freeze their TRX to obtain additional bandwidth, which allows them to perform more transactions.
The great thing is that staking TRX on the TRON network not only helps with securing the network but also allows users to earn additional resources in the form of energy and bandwidth. Users can stake their TRX to obtain additional energy and bandwidth, which they can use to execute more smart contracts or transfer more assets and data on the network. In simple words, staking will allow you to cover fees.
The amount of energy and bandwidth that a user can obtain by staking TRX is proportional to the amount of TRX they stake. This means that the more TRX a user stakes, the more energy and bandwidth they can obtain. Additionally, users can freeze their TRX for a specific period of time to obtain more resources at a reduced rate. This incentivizes users to hold onto their TRX for a longer period of time and contributes to the overall stability of the TRON network.
By staking TRX and obtaining additional energy and bandwidth, users can save on transaction fees and execute more complex smart contracts that require more energy. This encourages developers to build more advanced applications on the TRON network, which can lead to more adoption and growth for the ecosystem. Overall, staking TRX plays a crucial role in the functioning and growth of the TRON network, providing users with the resources they need to participate in the ecosystem and build innovative decentralized applications.
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So now that we introduced Energy I want to talk about how TRON is dealing with current issues and solutions through a Dynamic Energy Model, that was launched not too long ago through a community TIP (TRON Improvement Proposal). Just like many other blockchain networks, has been facing the challenge of network congestion and resource concentration. As a result, popular smart contracts have been consuming an excessive amount of network resources, leading to slower transaction processing times and higher transaction fees. To address this issue, the TRON developer community proposed the Dynamic Energy Model Effect Analysis, which has officially taken effect on the TRON mainnet as of February 5, 2023.
The dynamic energy model adjusts the energy consumption of calling a smart contract dynamically based on its resource occupancy. This means that the amount of energy consumed by a smart contract will be adjusted according to its usage, which will help to distribute network resources more evenly across the TRON network. In turn, this will prevent network resources from being excessively concentrated on a few popular smart contracts, improving the overall efficiency and reliability of the TRON network.
One of the most significant benefits of the dynamic energy model is the reduction of low-value transactions on the TRON network. Comparing the on-chain data in the past month with that before the proposal took effect, we can see a 48.46% decrease in low-value transactions. The dynamic energy model targets these low-value transactions without affecting normal transactions, enhancing the security of the TRON network. This reduction in low-value transactions also means that network resources can be directed towards more valuable transactions, improving the overall efficiency of the network. In other words, energy isn’t being congested by bad transactions and frees up more resources for users.
Additionally, the dynamic energy model has increased the transaction volume of non-popular contracts. Before the proposal was enabled, the transaction volume of non-popular contracts was around 45,447. However, after the dynamic energy model was implemented, this volume has grown to approximately 91,228. This is a positive development for the TRON ecosystem as it expands the development space for non-popular contracts, improving the diversity of the TRON network ecology.
Another significant benefit of the dynamic energy model is the increase in the staking rate of the TRON network. Comparing the on-chain data in the past month with that before the proposal took effect, we can see that the total amount of TRX staked on the TRON network has increased by 2.96%. This increase in the staking rate is important as it improves the security and reliability of the network, making it more attractive to potential users and developers.
Furthermore, the dynamic energy model has increased the TRX burning volume of contract transactions by 37.67%. This increase in TRX burning volume has greatly increased the deflation rate of the TRON network, further improving the network's economic model.
In conclusion, the dynamic energy model implemented on the TRON mainnet is an important development that addresses the issue of network congestion and resource concentration. This model will distribute network resources more evenly across the TRON network, reducing low-value transactions, expanding the development space for non-popular contracts, and improving the overall efficiency, security, and reliability of the network. The increase in the staking rate and the deflation rate of the TRON network are also positive developments that will make the network more attractive to potential users and developers. The implementation of the dynamic energy model is a significant step forward for the TRON ecosystem, and its benefits will be felt for years to come.