Zero fee for stablecoin on Tron and Ethereum?


On Saturday, the founder of the crypto project Tron, Justin Sun, stated that they are working on a solution to eliminate the fees on stablecoins, possibly even on the Ethereum network.

It would be a new solution that allows stablecoin transfers without gas, so that transfers can be made without paying fees, which would be entirely covered by the stablecoin themselves.

According to Sun, this solution will be implemented first on the Tron blockchain, but will subsequently also support Ethereum and all public chains compatible with EVM (Ethereum Virtual Machine), and will greatly facilitate large companies that want to implement services based on stablecoin, thus bringing the mass adoption of blockchain to a new level.

The solution: zero fee for stablecoin exchanges on Ethereum and Tron 

The details of this solution have not yet been disclosed, except for the fact that the Tron development team plans to launch this service in the fourth quarter of the current year. 

What is known is that it is a solution that will be applied to on-chain P2P (peer-to-peer) transactions, that is, those without intermediaries, and that it will require the fees to be paid neither by the sender nor the receiver. 

It is therefore not an abolition of the fees, also because the block validators must still have an incentive to continue working on validation, but a change regarding who pays them. 

Since it is a solution specifically designed for stablecoin, it is possible that it also directly involves the issuers of the stablecoin, even though for example Tether has not said anything about it so far. 

Tron and USDT

Tron is now by far the most used chain in the world for transactions of the main stablecoin, USDT by Tether.

According to the data from Artemis, it dominates not only in terms of the number of transactions but also in volumes.

In particular, starting from the beginning of 2023, it has surpassed Ethereum and has not been reached again.

It is an average daily volume that in recent months has exceeded 10 billion dollars, with peaks even over 15. 

However, regarding transactions in USDT on Ethereum, the average daily volume often remains below 8 billion, although with peaks at almost 10, while in 2022 it had also abundantly surpassed this last threshold. 

The chart clearly shows how starting from 2023 the trading volumes of USDT on Ethereum have decreased just as those on Tron were increasing.

The reason is quickly explained: in the face of an average transaction fee of about $0.175 on Tron, on Ethereum it rises above $1.3, which is almost ten times as much. 

The competitors

Note that on Solana and TON the average fee drops even below $0.05. 

In particular, transactions on TON are experiencing strong growth, especially since Telegram is heavily promoting the use of “its” blockchain. 

It is possible that the idea of the Tron team to develop an even more economical solution, in terms of fees, has only recently emerged precisely thanks to the competition from TON and Solana. 

It should not be forgotten that the largest use of Tron today is USDT transactions, so if these were to move to other chains, Tron would lose many users and a lot of traffic.

Given that Solana and TON allow transactions with much lower fees, a drastic solution was needed to keep Tron competitive. Also, the main reason for using Tron instead of Ethereum is precisely the much lower fees. Therefore, from this point of view, Solana and TON seriously risk becoming strong competitors of Tron if the fees on Tron remain at current levels. 

Tether and the news of zero fees on stablecoins on Ethereum and Tron

Although Tether has not yet made anything official regarding this initiative by Tron, its CEO Paolo Ardoino wrote on Saturday that changes are coming. 

He was referring to the use of USDT for making payments, and in particular to a solution developed by the Celo development team. 

USDT in fact is not present only on Tron, Ethereum, Solana, and TON, but also on Omni (a sidechain of Bitcoin) and on other chains, including Avalanche, Near, Cosmos, Tezos, and others, including Celo. 

The solution developed by Celo allows for payments in cryptocurrency (USDT) using a card.

This should allow payments in USDT practically anywhere payment cards like Visa and Mastercard are accepted. 

The future

Combining the two things, one can imagine that in a not too distant future it will be possible to make transfers of USDT and other stablecoins from one wallet to another without paying fees, or paying very low fees, and then use those same stablecoins to make payments anywhere with classic credit or debit cards. 

The fact is that all these operations can be managed easily and in a very fast and efficient way by new IT platforms specifically designed and created to minimize waste and friction, thus reducing costs and execution times to the maximum. 

Traditional payment systems in fiat currency have never managed to achieve as much, also because they are based on a monetary system that has never been truly optimized in recent decades. 

Cryptocurrencies are natively digital tokens, already designed to be easily exchangeable by anyone, and stablecoins also solve the last obstacle to their mass adoption, namely the excessive volatility of their purchasing power.