Comparing Tron and Chainlink: A Case Study (Analytical Report); [July 19th, 2019]
The purpose of this case study will not be to compare the two projects listed in the title of this report, side by side, based on their technical merits, but rather to use each project as an example of what tactics and strategies are and are not effective in generating buzz, strengthening a protocol’s ecosystem, and driving price upward in the crypto markets in 2019.
Intro: Background For Our Tron and Chainlink Case Study
Tron and Chainlink are two cryptocurrency projects that have had vastly different fates throughout the year 2019.
Let’s take a look at the price action for both projects throughout the year 2019 (YTD; July 19th, 2019).
Tron’s Price Action YTD
YTD Tron is down -53.68% against BTC.
Fiat-wise, Tron is up 27% (approx.) YTD.
Chainlink’s Price Action YTD
Above, we can see that Chainlink is up +229% against $BTC YTD.
Fiat-wise, Chainlink is up 454.53% YTD.
What’s the Core Difference Between Chainlink and Tron That We Can Attribute to the Price Action?
Given the parity between the two projects despite the fact that one could objectively state that Tron has had more “exposure” in the community YTD, the results above prompt the question of ‘Why has there been such a significant difference in Tron’s price action vs. Chainlink in 2019?’.
Why a Fundamental Analysis of Each Project’s Technical Features Would be Ineffective
We could legitimately comb through both projects and assess the technical merits of both, but it is highly unlikely that the technical differences between the projects have played too significant of a role in the difference in price action between the two cryptoassets.
This can be said because, while Chainlink does have a noteworthy use case, there are plenty of individuals in the crypto community that have and will make the same argument for Tron. The only way to truly parse the difference between the two would be to take an in-depth dive into both of the projects’ whitepapers/GitHubs/development status/etc., then perhaps spin a few nodes on a testnet and begin to really evaluate how each protocol functions under different stress test measures.
But this is something that has not been done (as of yet), and it is highly unlikely that there are individual investors / speculators that are going through this effort in their private time as well. Also, the crypto markets are not a zero sum game — there is no reason why an individual could not hold a “bag” of both Tron and Chainlink if they felt that both projects were promising.
So, let’s see if we can’t dig into the heart of what has been responsible for Chainlink’s astronomical rise and Tron’s lackluster performance thus far this year (in relation to its counterparts in the T15).
Solution: Conducting a Fundamental Analysis of Each Project’s Press Releases and Updates Throughout 2019
A thorough fundamental analysis of each project’s P.R./substantive updates throughout 2019 should help provide a better perspective of why there has been a chasm in price action between the two.
One of the primary drivers of positive market activity for projects in 2019 has been substantive news (Bitcoin excluded to a certain extent).
The Bar For What Qualifies as Substantive News Has Risen Significantly in 2019
However, cryptomarket surveyors should note that news has not been a driver of price action in the same way that it was in 2017 — a fact that the majority of pundits in the crypto space appear to be omitting in their analyses.
During the 2017 “bull market”, news of mundane events such as a “new roadmap” or “new partnership” would be enough to push the price of a cryptoasset upwards — irrationally so, at times. However now it appears that such news is an insufficient driver of price action. This strongly indicates that the market is maturing in terms of its understanding of legitimacy, on a fundamental front, as well as its ability to gauge what should be considered substantial and what should simply be classified as ‘fodder’.
It is possible that this shift in the market culture is the primary reason for why the price action between Tron and Chainlink have been so markedly different throughout 2019.
In order to prove this, we’re going to start by taking a look Tron, specifically, and their recent press releases and announcements.
Tron’s Announcements Throughout 2019 (YTD)
Thus far, in 2019, Tron has announced the following noteworthy events (this is not an exhaustive list by any means):
Justin Sun forming a partnership with Binance via Bittorrent (https://medium.com/bittorrent/ask-me-anything-with-justin-sun-and-binance-recap-8d0aa94cc39).
Justin Sun’s acquisition of Bittorrent and subsequent promises of integration into the Tron ecosystem to enhance the overall project(https://www.coindesk.com/tron-foundation-completes-acquisition-of-bittorrent).
Tron’s announcement of a “Mainnet Upgrade” designed to “enhance security” and “convenience” on the protocol (https://cointelegraph.com/news/tron-announces-mainnet-upgrade-designed-to-enhance-security-and-co).
Tron’s Announcement of the impending BitTorrent File System Protocol Integration endeavor (https://www.prnewswire.com/news-releases/tron-announces-bittorrent-file-system-protocol-300859208.html), which was Tron’s official signaling that they would be “throwing their hat” into the ring alongside other decentralized storage solutions in the crypto sphere.
Why the Aforementioned Announcements Have Not Had a Lasting Effect on the Price Action for Tron
There are a few reasons for why the announcements above have not had a lasting impact on the price action for Tron.
A few of these reasons are listed below:
- Justin Sun, the co-founder and figurehead of the Tron project, has been embroiled in significant controversy throughout the bulk of 2019, which has substantially reduced public faith in his leadership abilities.
- Justin Sun’s public image notwithstanding, he has become somewhat of a pariah in the crypto community, drawing criticism from several other very visible thought-leaders in the space such as: Charlie Lee, Jed McCaleb, Vitalik Buterin and others.
- Justin Sun’s marketing practices have been met with significant scorn by the crypto community.
- Some of the aforementioned announcements discussed above have been called into question by those that are either affiliated with subsidiary projects of Tron or Tron itself.
- The overall direction and narrative of the project has changed several times over the past year and a half, and the varying announcements, acquisitions, and general lack of concise, scheduled information by Tron leadership (Justin Sun) have left many confused about the project’s overall vision moving forward.
Below, we will take some time to discuss each of the bullet points listed above.
Point #1: Justin Sun Has Been Embroiled in Significant Controversy Throughout 2019 (and beforehand as well)
As noted above, one of the potential reasons for Tron’s failure to gain market much market momentum as projects like Chainlink may be the many controversies that have surrounded Justin Sun, in particular, as co-founder and figure of the Tron project.
Below is a short list and description of some of those controversies.
(H3) Justin Sun’s Marketing of Bittorrent’s IEO
Tron, which had acquired Bittorrent prior to the Initial Exchange Offering on Binance, led the marketing and promotional charge for the IEO — mainly behind Justin Sun’s efforts on social media. (Below is an example)
Thus, when users experienced a number of technical difficulties and errors when attempting to participate in the Initial Exchange Offering, the backlash was severe for Justin Sun, Tron, Binance and Changpeng Zhao; each of whom had been complicit in marketing the Initial Exchange Offering to the general public.
Point #2: Justin Sun Has Managed to Attract Significant Criticism in the Cryptosphere
Below are some examples of ‘tiffs’ that the Tron founder has had with other high-visibility figures in the crypto sphere:
- In the beginning of 2019, Stellar Lumens co-founder and former Mt. Gox exchange operator, Jed McCaleb, issued a scathing criticism of the Tron project in an interview, calling the project ‘garbage’.
- Charlie Lee, founder of Litecoin, has made numerous subtle jabs at Tron, starting with this tweet in January 2018.
- Vitalik Buterin and Justin Sun have had a longstanding feud with one another, with Vitalik throwing subtle jabs at the Tron project, such as the one captured in this tweet where Vitalik Buterin jokes that “20% of the blogpost was plagiarized” from Tron — alluding to accusations that Tron had plagiarized their entire whitepaper (yet another controversy/scandal that has embroiled the Tron community).
Point #3: Justin Sun’s Marketing Practices Have Attracted Significant Criticism
It is no secret that Justin Sun is a frequent user of social media. It is his preferred platform to release updates about the Tron project, address related issues and disclose other pertinent pieces of news.
While some have lauded these efforts as a primary cause for Tron’s elevated exposure level in the cryptospace, there has also been a significant amount of criticism of Justin Sun, with accusations being thrown such as: bought followers (against Twitter ToS), paying for interactions on social media posts (i.e., likes, retweets, favorites, etc.), antagonizing feuds with other high-profile members of the cryptocommunity for the sake of greater exposure, ‘gimmicky’ offerings/promotion/marketing tactics.
The author(s) of this report make no assertion on the veracity of the above claims, they are merely being mentioned to provide a greater perspective of some of the criticisms that have been leveled against Justin Sun and how these perceptions may factor into the space’s overall opinion on the Tron cryptocurrency.
The above criticisms notwithstanding, however, some of Justin Sun’s most recent promotional efforts have caused a considerable amount of controversy.
Specifically, there are two major incidents that have occurred in 2019 that have drawn significant ire for Justin Sun and Tron.
- Tesla giveaway contest
- Liverpool FC partnership announcement
(H4) Tesla Giveaway Controversy
This saga started with an innocuous tweet by Justin Sun on March 12th, 2019, stating,
“To celebrate #BTT & #UST-#TRON success, I am planning a $20m free cash airdrop. Good news-it’s coming, bad news-I may decide to give away more! First, I will randomly pick 1 winner for a #Tesla up until 3/27! To apply, follow me and RT this tweet! Simple! #Blockchain”
The offering seems simple enough — although many have noted a failure to thoroughly outline how the co-founder/Tron would randomize the selection process.
The controversy, however, stems from posts by a Twitter user, named ‘@uzgaroth’, whom reported that they their Tesla award was rescinded, without cause, by Justin Sun and the Tron project.
This controversy was covered in Bloomberg and other internationally syndicated publications, drawing significant attention to the issue.
This report will not delve into the outcome of this saga, but the Bloomberg article linked above and the accompanying information should be enough of a lead for those that wish to chase that rabbit hole down to its conclusion.
(H4) Liverpool FC Partnership Announcement
On April 24th, 2019, Justin Sun wrote a tweet that read,
“Thank you for the unique and innovative innovation, Liverpool! I am impressed and I’m looking forward to exploring this #TRON new partnership together! @LFC #TRX $TRX #BTT $BTT”
The tweet, shown below, was accompanied with a video of an individual opening up a red package designed in the shape of an envelope with the words ‘You’ll Never Walk Alone’ underneath the Liverpool FC (soccer team if you’re in the United States) insignia.
Upon opening the package, a video within the package appears to autoplay, initially showing a logo of Liverpool FC and Tron:
A voice then begins talking on the screen with words that pop up as the narrator speaks.
Specifically, the narrator states, “We are Liverpool. This means more”, followed by an appearance by Liverpool manager, Jürgen Klopp:
The narrator then goes on to state, “This means more because you are associating yourself with a philosophy. A philosophy that says more about you than being part of any other football club.”
Quick Rebuffs by the Crypto Community
Journalists, crypto pundits, and other noteworthy figures in the cryptosphere were quick to state their skepticism surrounding Justin Sun’s tweet that seemingly claims that a formal partnership had been established between Liverpool FC and Tron.
Decrypt Media had reported shortly thereafter that they were able to get into contact with a Liverpool spokesperson, whom summarily debunked the claim that they were in any sort of a formal partnership with Tron, stating, “Liverpool Football Club has confirmed that it does not have a partnership with Tron.”
This incident was covered in full by CoinTelegraph as well. The article by CoinTelegraph also notes a tweet that was posted by Jesse Powell, co-founder of Kraken Exchange, in which he claimed that he had received a similar notice from Liverpool FC and implied that the offering was just a generic letter soliciting advertisement.
The letter that Jesse Powell posted is also shown below as well:
Point #4: “Wave Field” Community Scam
This most recent scandal involving Tron was thrust into the public spotlight on July 8th, 2019, when tweets from numerous different users showed individuals clashing with police at Raybo (Beijing) Technology Co. Ltd., in China.
Below is an example:
Initially, individuals had reported that Tron’s offices were being raided. This false assumption was most likely made because of the presence of police in several of the videos that hit social media.
It was later reported that a litany of investors had stormed Raybo (Beijing) Technology Co. Ltd.’s headquarters in order to voice their frustrations after being scammed by an entity going by the name of “Wave Field Super Community”. Notably, ‘Wave Field’ is the name used to refer to Tron in China.
It was reported that users were scammed out of approximately $20 million after contributing to this entity that claimed to be associated with the Tron project itself. Specifically, the ‘Wave Field Super Community’ had represented publicly that it was not only affiliated with Tron, it was also certain that it would be one of the 24 super nodes that would be elected on the protocol.
Reports claim that the scam essentially went on for months without any specific public denouncement of the fraudulent scheme or group by Justin Sun or other leadership members of the Tron community, specifically. Thus, users felt that Tron, as well as Justin Sun, were specifically negligent in their assumed responsibility to issue a public warning about a scam misrepresenting themselves as a member of the Tron community.
Wrap-Up: Justin Sun May Be Tron’s Worst Enemy
When evaluating all of the negative issues and bad press that Tron has received over the past year, it would not be unreasonable to assert that Justin Sun has been both Tron’s biggest advocate and its worst enemy.
Justin Sun’s marketing efforts have helped in bringing tremendous exposure to the Tron project. It appears that Justin Sun was the driving force behind helpful initiatives for the ecosystem such as:
- The acquisition of Bittorrent
- Developing a close relationship/partnership with Binance (they’re both registered at the same address in Malta, which has undoubtedly helped with these efforts as well)
- Pivoting Tron after being outed for a plagiarized whitepaper in 2018
- Going on a major hiring push toward the end of 2018 and at the beginning of 2019 as well
The positives that Justin Sun brings to the platform, however, seem to be largely outweighed by the negatives brought on by the various scandals, controversies, and negative attention that has been elicited through his actions, fair or not.
When juxtaposing the numerous issues surrounding Justin Sun and the Tron project that have occurred in just the last 12 or so months, it seems obvious that a change in strategy would be advisable for Justin Sun and Tron leadership if they are to ensure the success of the project in the long-term. Otherwise, the maximum upside for Tron as a project, community, and cryptocurrency will continue to decline accordingly.
Fundamental Analysis of Chainlink
Chainlink has presented itself as almost the polar opposite of Tron in terms of its optics in the community.
Rather than drawing ire and criticism, Chainlink has been able to largely avoid coming under any specific, intense public scrutiny for malfeasance or general incompetence on behalf of its developers or individuals associated with the project.
Chainlink Development/Protocol Updates in 2019
Below are some major updates to the protocol that have been made from the beginning of the year to the time of writing (in no particular order):
- Chainlink Releasing on the Ethereum Mainnet
- Addition of Threshold Signatures
- First Chainlink Marketplace Created
Chainlink’s Partnerships/Collaborations (2019)
- Google (Google Cloud) Announces They Will Be Placing Data On-Chain for Ethereum Using Chainlink Oracles
- BraveNewCoin Announces They Will Be Using Chainlink to Bring Enterprise-Grade Smart Contract Tools to Institutions
- Elrond Announces They Will Be Using Chainlink’s Decentralized Oracles
- Synthetix Announces They Will Be Using Chainlink to Decentralize Price Feeds
- Provable (Formerly Known as Oraclaize) Announces a Partnership With Chainlink
- Celer Network Announces They Will Be Working With Chainlink to Combine Real-World Info and Assist With Layer-2 Scalability
- Bodhi and Naka Chain Announce That They are Looking to Integrate Chainlink to Bring DApp Development to the “Next Stage”
- Katallassos Announces They Will Be Using Chainlink for Data Feeds
- Harmony Project Announces Integration of Chainlink Technology for Off-Chain Connectivity
Miscellaneous/Market-Related Announcement for Chainlink
Analyzing Chainlink’s P.R. and Announcements
In this section, we’re going to take a look at Chainlink’s P.R., announcements, and development updates that were listed in the prior section, why these updates are of more ‘substance’ than what has come out from Tron’s camp (controversies aside for the time being) and other related factors.
This report will valuate the following facets of the related press releases:
- The nature of the announcements (what these partnerships/dev updates are centered around)
- The associations created through Chainlink’s partnerships
- The nature of the developmental updates to the protocol that have been released so far this year
Nature of the Announcements
Despite the fact that there are a number of partnerships that were included in the list in the previous section, the are two unique characteristics of these partnerships that have been instrumental in assisting the elevation of Chainlink throughout 2019.
These factors are:
- Chainlink has managed to ink partnerships/collaboration with highly recognized and reputable organizations, such as: Coinbase, Google, and Bravenewcoin
- The vast majority of Chainlink’s partnerships appear to be voluntary integrations by other projects in the space
- Chainlink’s partnership with other projects in the crypto sphere are centered around the premise of Chainlink’s technology being leveraged to further the technical goals of these projects.
- The fact that a significant number of Chainlink’s partnerships are with other projects in the crypto space is a unique characteristic, in itself, among other crypto projects in the crypto space.
- Chainlink’s partnerships with other projects in the crypto space help to spread the word about Chainlink to other investors in the crypto space that may not have otherwise learned about the protocol or its features.