[ARFC] Deploy Aave v3 on Tron

[ARFC] Deploy Aave v3 on Tron

Author: ACI

Date: 2025-04-30

Simple Summary:

The current proposal seeks the community’s input on the deployment of Aave V3 on Tron Mainnet, after successful [TEMP CHECK] Deploy Aave v3 on Tron and TEMP CHECK Snapshot.

Background:

Tron is the second ranking EVM blockchain in terms of bridged TVL after Ethereum with circa $73bn of value bridged. Almost $69bn of this is stablecoins. We believe that it is time for Aave to deploy on Tron to access this liquidity and allow Tron users to access Aave to earn yield on their stablecoins and borrow against collateral.

Motivation

Aave has deployed on multiple promising new L1 and L2 EVM networks and is often one of the largest protocols on these networks. Tron stands out as a significant opportunity which Aave has previously overlooked, we believe it is time for that to change. It is time for Aave to deploy on the second largest EVM blockchain and allow Aave users the opportunity to access the $69bn of stablecoins and $73bn of bridged value on Tron. This represents a significant opportunity for Aave to grow TVL, revenue, and access a brand new market from which Aave is conspicuously absent.

Proof of Liquidity (POL) and Deposit Commitments:

The Tron DAO has committed to deposit funds at deployment of the instance to bootstrap liquidity.

More details will be shared shortly, now that ARFC is live.

Specification:

Risk Parameters have been provided by Service Providers and this section has been updated accordingly. 2025-05-15

Parameter Value Value
Asset WTRX USDT
Isolation Mode No No
Enable Borrow Yes Yes
Enable Collateral Yes Yes
Loan To Value 55% 75%
Liquidation Threshold 60% 78%
Liquidation Penalty 10% 5%
Reserve Factor 15% 10%
Liquidation Protocol Fee 10% 10%
Supply Cap 200,000,000 120,000,000
Borrow Cap 100,000,000 110,000,000
Debt Ceiling - -
UOptimal 80% 90%
Base 0% 0%
Slope1 7% 5.5%
Slope2 300% 40%
Stable Borrowing No No
Flashloanable Yes Yes
Siloed Borrowing No No
Borrowable in Isolation No Yes
E-Mode Category N/A N/A

Disclaimer:

This proposal is powered by Skywards. The ACI is not directly affiliated with Tron and did not receive any compensation for creating this proposal.

Next Steps

  1. Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage.
  2. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal.

Copyright:

Copyright and related rights waived under CC0

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Summary

LlamaRisk supports deploying Aave V3 on Tron. Tron is already one of the largest blockchains by total value locked (~$5.1 B), active addresses (~2.2 M), and outstanding stablecoin supply (over $70 B), yet its DeFi stack remains limited. A single lending protocol, JustLend, secures about $4B of deposits, but only 4 % is borrowed, while SUNswap dominates spot liquidity. Capturing this untapped demand represents a clear growth opportunity for Aave.

The network relies on a Delegated-PoS consensus in which 27 Super Representatives take turns producing and validating blocks; a recent snapshot showed that these same 27 validators produced 52 % of all blocks and received 97 % of the votes, highlighting a high degree of concentration.

Oracle infrastructure is provided by Chainlink, which maintains 14 price feeds on Tron and removes a major integration hurdle for Aave.

Security oversight is supplemented by a public HackerOne bug-bounty program launched in January 2023; However, the program is live, and its payouts—$250, $500, $1 000, and a maximum of $5 000 for critical findings—are extremely small relative to the value secured and should be improved. TronDAO has informed us that this will be addressed shortly.

Other fundamentals—full EVM compatibility through the Tron Virtual Machine, three-second block times, and inexpensive bandwidth and energy fees—simplify deployment. We recommend launching Aave V3 on Tron with conservative risk parameters that can be adjusted as on-chain liquidity diversifies beyond USDT and the network strengthens its security safeguards.

Initial instance parameters have been discussed and will be presented jointly with @ChaosLabs.

1. Network Fundamental Characteristics

1.1 Network Overview

Tron is an EVM-compatible L1 blockchain built using the Solidity programming language. Launched in May 2018, Tron’s architecture incorporates key components similar to Ethereum: a Delegated POS consensus mechanism, operational units of measurement (transaction and computation costs) based on ‘Bandwidth’ and ‘Energy’, and a Tron Virtual Machine.

A recent upgrade to Tron 4.8.0, announced in April 2025, introduced important changes to the network, including enhancing Consensus Layer verification (prevents malicious blocks from being generated during maintenance), upgrading Event Service V2.0 (for faster processes and historical queries, improving node performance (e.g, faster block synchronization), deprecation of the SELFDESTRUCT in TVM, and Ethereum compatibility upgrade among others.

Key network metrics (as of April 23rd, 2025)

Metric Value
Max transactions per second (capped) 1,035
Block generation time 3 seconds
Total transactions 10.2B
Total accounts 302M
Total blocks 71.6M

Architecture

Source: Architecture of TRON, Tron docs

Tron architecture is made up of 3 layers:

1. Core Layer
This layer forms the underlying layer of the blockchain, consisting of modules that manage smart contracts and accounts, including the smart contract module, account management module, and consensus module. Additionally, a stack-based virtual machine, TVM, supports the consensus module in the layer.

2. Storage Layer
The storage layer is a distributed protocol allowing block and state data storage.

3. Application Layer
Includes developer-made dApps and wallet interfaces, supporting multi-language extensions.


Source: Transaction Lifecycle, Tron docs

Consensus Model

TRON uses Delegated Proof of Staking (DPOS) as its consensus mechanism. This entails the selection of block-producing validators through a staked election process; validators with the most votes are selected as “Witnesses”. Witness nodes on Tron are called Super Representatives (SRs) and are elected by TRX stakers (Tron’s native token). SRs are the sole producers of blocks and transaction validators, maintaining the network’s security.


Source: Consensus Algorithms: Proof-of-Stake & Cryptoeconomics, Nichanank

During each epoch, SRs take turns producing blocks for each slot time. Once blocks have been processed, SRs sign the block witness_signature fields to commit them. SRs add additional data to each block, such as the parent block hash, super representative address, the block height, and block time. Generated blocks are broadcast to other SRs for consensus, requiring more than 70% approval following the longest chain principle in the event of a fork.

Epochs are set to 6 hours, with elections for SRs occurring in the last two block times (maintenance period). The block generation order is also determined during this period, and expired proposals are processed.

Virtual Machine

Originally forked from the EVM, the TVM executes Tron smart contracts and performs state change operations on a block-by-block basis, with Tron’s canonical state maintained as a Merkle Trie data structure.


Source: TVM flowchart, Tron Docs

TVM flow process:

  1. The compiler compiles smart contracts into readable and executable bytecode
  2. TVM processes bytecode data through the opcode smart contract
  3. TVM accesses blockchain data and makes external calls through its interoperability service layer.
  4. TVM executes and generates a block (in the case of lead SR) or validates a block (in the case of other SRs).

Key differences between TVM and EVM

  • TVM uses energy instead of gas.
  • Tron contract addresses use 0x41 as prefixes
  • TVM calculates SHA-256 twice for pre-compiled contract Ripemd160(0x03)
  • EVM uses Blake2F while TVM uses BatchValidateSign for pre-compiled contract 0x09.
  • There are 2 ways to send TRX: Transfer and TriggerSmartContract with a callValue. Transfer does not call fallback functions in contracts.

Nodes

There are two types of nodes on the Tron network: Full nodes and Lite FullNodes. Full nodes verify, store, and sync all data and states on the chain. Additionally, they provide APIs for external queries. Lite FullNodes run the same code but differ from Full nodes as they only store data and states of the latest 65536 blocks. Lite nodes only support queries for data after the Lite node is initialized.

As part of the DPOS mechanism, 27 Full nodes are chosen to become Super Representatives from any nodes that pay a 9,999 TRX fee and receive the top 27 most votes during the maintenance period.

SRs are backed up by 100 SR partners, who can replace inactive or underperforming SRs. SRs and SR partners are elected every 6 hours. SRs receive rewards in 2 forms:

  • Block Production Reward: 16 TRX per block to the SR that produced the block; a portion of this reward (default 80%) is distributed to SR voters as a commission and incentive for voting.
  • Voting Reward: 160 TRX per block to SRs and SR partners in proportion to their votes; a portion of this reward is also distributed to voters.

Given the absence of validators required to provide economic security, nodes are only incentivized to act properly or potentially be voted out as an SR, forfeiting block production rewards.

Asset Standards

TRC‌20 is the fungible token standard (compatible with ERC‌20), and TRC721 is the NFT standard (compatible with ERC721). TRC10 is an account-issued token unique to Tron. TRC1155 supports both fungible and non-fungible token standards.

Fees

Bandwidth and energy are used as units of measurement for resource consumption; both unit prices are denominated in ‘sun’. Bandwidth represents the byte size of a transaction; transactions are transmitted and stored as byte arrays. 1 byte = 1 unit of bandwidth; the larger a transaction’s byte size, the more Bandwidth resources it will consume. Bandwidth is obtained by staking TRX via a FreezeBalanceV2Contract transaction; accounts receive a portion of the daily network amount and a 600 daily Bandwidth allowance. Once an account’s bandwidth has been used, TRX is burned at 0.001 TRX per Bandwidth unit.

Energy represents the computation the TVM requires to process smart contracts. The more complex an execution is, the more energy is required. Energy is acquired similarly to bandwidth by staking TRX. Once an account’s energy is depleted, TRX is burned at 0.00021 TRX per Energy unit. Both Energy and Bandwidth are consumed in Tron transactions.

Other fees applicable to the network include:

Transaction Type Description Fee
WitnessCreateContract Apply to become a super representative candidate 9999 TRX
AssetIssueContract Issue a TRC10 token 1024 TRX
AccountCreateContract Create a new account (activate an account) 1 TRX
AccountPermissionUpdateContract Update account permissions 100 TRX
ExchangeCreateContract Create an exchange pair 1024 TRX
TransferContract/TransferAssetContract TRX transfer or TRC10 token transfer (includes new account creation fee) 1 TRX

Security

Least Authority and ChainSecurity have audited Tron’s codebase. Only 2 external audits could be found at the time of writing, with a 4-year gap between them.

  • Least Authority (March 2020): 2 issues were found and resolved, 4 suggestions
  • Chainsecurity (September 2024): 4 severity findings which were corrected, 8 medium findings, and 9 low severity findings

Considering the number of protocol updates, the lack of regular audits should be of concern, given the number of changes to the network’s codebase. The network maintains full transparency through its open-source GitHub repository, enabling independent security reviews and discoverability of potential issues.

Past Exploits
The UpdateAccountPermission feature that enables account owners to assign multisig roles to accounts was exploited for $31.5M in 2024. This vulnerability requires the account’s private key to be compromised. This was addressed by modifying leading wallets such as TronLink to warn users against this threat vector more explicitly.

In 2023, $137M was stolen from Tron users in phishing operations identified to be led by North Korean hackers.

Bug Bounty

Tron launched a Hackerone bug bounty program in Jan 2023, with a tiered severity level payout scheme: $250 per low finding, $500 per medium finding, $1000 per high finding, and $5000 per critical finding. To date, $2350 has been paid out from 20 reports resolved.

On average, it has taken ~5 days for a finding to be resolved and ~3 days from a report submission for a payout.

This is low and will be addressed by the team shortly, with the critical level being raised to $100K.

Network Risk Considerations

Architecture: Tron relies on 27 witness nodes (Super Representatives) to produce and validate blocks, centralizing the network’s operations in a small set of operators. The reduced diversity of validators increases the potential for collusion, which is magnified by the lack of staked collateral and provides no disincentives against bad actors in the event of collusion.

Client dependence: A single client software (java-tron) is available to run a node, which increases the network’s reliance on a single codebase.

Security: Given the network’s previous vulnerabilities, trade volumes, and active users, bug bounty rewards do not seem adequate for active bug discoveries and risk mitigation. Additionally, we encourage more external audits to support the network’s updates and maturation.

1.2 Decentralization and Legal Evaluation

Governance

Since 2021, Tron has been governed by the Tron DAO. The network utilizes a dual management model that includes Super Representatives (committee, partners, and candidates) and Core Developers.

The SR Committee, which consists of the current 27 SRs, can modify dynamic parameters that include the Resource model (Bandwidth and Energy fees), SR parameters (e.g., account creation cost, rewards, and maintenance interval), Upper and lower limits (e.g., max execution time, smart contract fees), and TVM and Consesus model changes among others. Committee members, partners, and candidates can propose modifications to parameters, but voting on proposals is limited to elected SRs. Proposals are valid for 3 days and require at least 18 SRs to vote in favor to pass.

Voting for SRs requires accounts to stake TRX, and by staking TRX, accounts receive voting rights in the form of Tron Power (TP); 1 TRX stake generates 1 TP. As mentioned in section 1.1, elections occur during the last 2 blocks of an epoch (every 6 hours). Voting rights cannot be delegated to other accounts. However, Energy and Bandwidth can. Unstaking TRX revokes TP and reclaims TP allocated to the SRs an account had voted for.


Source: Committee proposal, Tronscan

Tron Core Developers can change core protocol specifications (e.g., consensus forks, application-level standards, and TVM modifications), client APIs, and contract standards through TIPs (Tron Improvement Proposals) that only require consensus from core developers. TIPs undergo a 2-week process of refinement and discussion before Core Devs decide on implementation. This 2-week window is not programmatically enforced.

A community forum exists for network-related discussions; however, protocol proposals are not discussed here. TIPs are posted on GitHub, with discussions occurring in the proposals. SR governance utilizes onchain mechanisms, with proposals, voting, and executions visible onchain. Approved parameter changes are actioned in the following maintenance period. See an executed proposal here.

The time delay for network changes varies and depends on when sufficient upvotes are received within the validity period (3 days), ranging between:

  • 6 hours if a proposal passes at the start of an epoch.
  • 6 seconds if a proposal passes before the start of the next maintenance period.

Risk Considerations

On May 2nd, 2025, Staked TRX as a percentage of circulating TRX supply was 45.45%; this represents less than a majority of available TRX not engaging in governance. This creates the possibility of large TRX stakers influencing the selection of SRs.

TRON Core Developers can make unilateral changes to the network. At the same time, modifications are communicated ahead of time, and through platforms such as GitHub, X, and Medium, significant change discussions are decided by a narrow group of developers. An example is the 4.8.0 upgrade.

Node Distribution

A Tron Committee composition observed on April 27th, 2025.

Rank Name Produced (Cum.) Ratio (Cum.)
1 Binance Staking 2,137,003 99.57%
2 TRONALLIANCE 2,404,993 99.93%
3 Poloniex 2,018,896 99.98%
4 Abra Capital Management 851,547 99.99%
5 Crypto Labs 1,309,269 99.99%
6 BlockAnalysis 1,106,395 99.99%
7 Luganodes 1,046,062 99.99%
8 JD Investment 1,625,008 99.96%
9 Crypto Innovation Fund 1,316,956 99.98%
10 Huobi_Wallet 1,446,018 99.13%
11 Intelligence Quant 1,292,348 99.99%
12 Smart Consensus 1,293,247 99.99%
13 cryptoAI 857,674 99.99%
14 BlockchainOrg 2,412,856 99.87%
15 metaverse home 1,309,092 99.99%
16 Ant Investment Group 1,699,843 99.93%
17 Chain Cloud 1,105,756 99.99%
18 TronSpark 2,592,554 99.77%
19 P2P 7,480 99.87%
20 StakedTron 1,928,790 99.9%
21 CryptoChain 2,559,283 99.84%
22 Google Cloud 358,603 99.99%
23 Kiln_Staking 74,625 99.93%
24 CryptoGuyInZA 2,633,277 99.88%
25 Nansen 74,686 100%
26 OKCoinJapan 743,072 99.99%
27 OKX Earn 1,045,311 99.9%

*Note: This is reconfigured every 6 hours

At the time, these SRs had produced ~52% of the total blocks produced and are observed as having staying power as committee members. This concentration systematically relies on these operators, including centralized exchanges and investment entities.

Source: Node Distribution, Tronscan, April 27th, 2025

There are 8,128 nodes distributed over 84 countries, with the top 5 being the USA, Ireland, China, Germany, and Singapore. Continental concentration is fairly evenly distributed between North America, Asia, and Europe.

1.3 Activity Benchmarks

Source: Tron TVL & Stablecoin Market Cap, DeFiLlama, April 29th, 2025

Tron’s $5.074B TVL represents the fifth-largest chain by TVL, down from its ATH of $10.5B in March 2024.

The network’s stablecoin market has seen continuous growth, rising to over $70B in market cap, with USDT representing 99% of the overall market. Since the introduction of native USDT minting on the network in March 2019, USDT has remained the only major stablecoin.

Source: Active accounts, Tronscan, April 29th, 2025

Source: Transaction volume, Tronscan, April 29th, 2025

Since the network’s launch, active accounts and transaction volume have remained consistent over the last 90 days, with overall growth.

2. Network Market Outlook

2.1 Market Infrastructure

Source: Protocol Rankings, DeFiLlama, April 29th, 2025

The network’s DeFi landscape is relatively small, given its high TVL; only 5 protocols have TVLs over $1M. The sectors represented by these protocols include lending, CDPs, and Dexes. Other protocols with over $10K in TVL by category include (as of April 29th, 2025):

Lending: JustLend ($3.7B)
DEXs: SUN.io (SUNswap, SUNcurve, SunPump) ($940M), Just Money ($717K), Intercroneswap ($298K), Socialswap ($282K), Bridgers ($81K)
CDPs: USDD ($362.45m), JustStables ($36.97M)
RWA: stUSDT
Staking Pool: NEOPIN ($622K)
On/Off Ramps: ByBarter, Moonpay, Alchemy Pay, Transak, Mercuryo, Blockchain Pay

The only significant lending protocol, JustLend, is also the largest protocol by TVL. Relative to the total supply of stablecoins, DeFi activity and diversity are low, with a single player in the lending market.

Bridges
Available bridge options include BitTorrent Bridge, JustCrypto, Symbiosis, Poloniex (multi-chain wallet), Meson, Nitro Router.

Oracle
Chainlink is the network’s official oracle provider, with 14 data feeds available.

Toolings

Available wallets include Tron-specific wallets and multichain wallets such as TronLink, TrustWallet, WalletConnect, OKX Wallet, Klever Wallet, TotalSig, and Bitget. RPC endpoints that provide services for Tron include Fastnode, PublicNode, Trongrid, dRPC, Ankr, NodeReal, and Getblocks, among the Full nodes described in section 1.2.

2.2 Liquidity Landscape

DEXs

Top 10 LPs by TVL across Tron (as of April 30th, 2025)

DEX Pair Name 24H Volume ($) TVL ($)
Sunswap V3 USDT/WTRX $65.95M $192.67M
Sunswap V3 USDT/WTRX $2.27M $96.63M
Sunswap V2 HTX/WTRX $102.98K $61.8M
Sunswap V2 JST/USDT $593.31K $7.86M
Sunswap V2 NFT/USDT $26.17K $5.65M
Sunswap V2 BTT/USDT $85K $5.38M
Sunswap V2 USDT/SUN $41.22K $5.01M
Sunswap V3 sTRX/WTRX $78.54K $4.81M
Sunswap V3 JST/USDT $3.65M $4.43M
Sunswap V3 USDD/WTRX $32.49K $4.12M

Source: Tron Pools, Gecko Terminal, April 30th, 2025

Other active pairs outside the top 10 include USDT/USDD ($9.3M 24h volume) and ETHB/USDT ($917.44K 24h volume). As shown in section 2.1, Sunswap is the DEX market leader.

Source: USDT swaps within <5% slippage, Sunswap, April 30th, 2025

USDT DEX liquidity is high for Wrapped TRX and represents the most liquid market. Alternative liquidity can be found for BTTC-Bridged EtTH, a bridged variant from the BitTorrent Chain (a Tron-based L2).

Lending Markets

Protocol Total Supplied Total Borrowed Utilization Supported Assets
Just Lend $4,044,349,815 $163,028,669 4% 20

(As of April 30th, 2025)

JustLend is the only lending protocol at the time of writing, with 26,629 suppliers and 3,163 borrowers. While the available supply is high, there is not a lot of user engagement in the lending market, as shown by a 4% utilization.

2.3 Ecosystem Resilience

Tron’s DeFi ecosystem is populated by a few protocols, with a single dominant player in key areas like DEX and lending, by Sunswap and JustLend. Major DApps and related assets such as JustLend, USDD, JustStables, and sTRX are governed by the JUST Network DAO. JST acts as the DAO’s governance token, allowing holders to decide on incentives, security, and pooled resource use. The consolidated management of these protocols consolidates management and responses to network-wide events. However, the lack of diversity in the overall ecosystem places a concentrated reliance on the JUST and SUN communities to manage these protocols to uphold confidence in the network effectively.

As shown in sections 1.1 and 1.2, Tron’s consensus and governance model relies on 27 node operators to produce blocks, propose network changes, and effect updates. This centralizes control over the network in the hands of a small set of SRs, while TRX holders can change the makeup of SRs through periodic elections; this does not exclude the potential for large stakers to have an outsized influence on voting outcomes. At the time of writing (May 1st,2025), the top 27 nodes received over 97% of the total votes cast.

2.4 Ecosystem Growth Potential

A TRON DAO Ecosystem Fund reported in 2022, worth $1B, was established that would provide funding for several programs aimed at growing the ecosystem, including:

  • TRON/BTTC Integration Fund: This fund encourages growth and development between Tron and BTTC.
  • TRON DAO Ventures: An investment team focused on early-stage projects.
  • Developer Grants: investment aimed at supporting new project core teams.
  • Industry relief fund in association with Binance.

To date, 15 investments have been made by the Tron DAO, with the most recent occurring in 2023.

USDT has continued to expand its supply on the chain, recently minting an additional $1B. Since the start of 2025, Tether has minted over $12B USDT. This increase indicates a growing interest in the chain; however, given current DeFi activity, this may likely be due to general USDT transfers between accounts.

Source: Token Terminal, Daily Fees, May 1st, 2025

This assessment is based on the high daily USDT transfers and trading volumes (2.3M and $60.6B for April 30th, 2025), low protocol fees, yet high network fees generated on Tron. When looking at protocol fees reported by DeFiLlama, the highest daily fee was $87,505 from Sunswap. When comparing Tron against other chains with similar or higher TVLs, more DeFi activity occurs on these chains, but the daily fees generated were consistently below Tron’s. Therefore, this is likely explained by Tron mainly being used to send and receive USDT between accounts.

The network’s continued growth heavily depends on USDT transfers rather than the DeFi market.

2.5 Major and Native Asset Outlook

TRX is the network’s native token, used in DPOS, rewards distribution, and to acquire resources necessary for network operations (Energy and Bandwidth). TRX tokenomics operates on a mint-and-burn mechanism. TRX is minted when a block is produced, and rewards are distributed (see section 1.1: Nodes). Currently, block rewards are set at 16 TRX and voting rewards at 160 TRX. The current supply is 94B.

Different bridged versions of ETH and onchain supply:

DEX Liquidity for these variants is limited, with only ETHB frequently traded (see section 2.2). A BTC derivative is also available on the chain, with a total supply of 17,545.

Stablecoins

USDT: 71,7B
TUSD: 167M

Recently, support for native USDC was discontinued by Circle. The justification for this was given as:

Our decision to discontinue support for USDC on TRON resulted from an enterprise-wide approach involving our company’s business organization, compliance, and other functions.

Viewed through a Bank Secrecy Act and EU anti‑money‑laundering lens, that retreat is readily explicable: the BSA’s risk‑based compliance framework and parallel EU directives expect stablecoin issuers to calibrate their controls to the perceived exposure of each payment rail. Because Tron is classified by a leading blockchain analytics firm as presenting heightened sanctions and illicit‑finance risk—and because the network’s technical design complicates address‑level freezes—Circle’s most defensible mitigation is to discontinue minting altogether, thereby pre‑empting a foreseeable compliance deficiency and demonstrating to U.S. and European supervisors that its enterprise‑wide risk assessment is both ongoing and actionable.

Maintaining support for a chain whose founder is simultaneously facing SEC litigation would have amplified that regulatory calculus. Circle’s decision to sever ties shields its stablecoin from potential secondary‑liability theories and reputational spill‑over while the litigation—currently paused while the parties explore settlement—remains unresolved.

USDD and USDJ are Tron-based collateralised stablecoins.

2.6 Legal Commentary

A constellation of corporate vehicles has been assembled to underpin the operation of the Tron ecosystem.

TRON Tech Limited, whose name appears in the copyright footer of tron.network, is identified as the site’s proprietor and administrator. Although it is said to be a British Virgin Islands entity used for administrative functions that support the ecosystem, searches of the customary public registries produce no verifiable incorporation record or shareholding data, leaving its precise corporate domicile and beneficial ownership opaque.

Tron Network Ltd., identified in the platform’s Privacy Policy as the data controller for the collection, use, and disclosure of personal information, is incorporated in the British Virgin Islands. Its BVI status affords a high degree of confidentiality concerning shareholders and directors, complicating efforts to map the company’s ownership structure.

TRON Foundation Limited, the non‑profit entity created by Justin Sun in Singapore in July 2017 to steward the network’s early technical and community development, reportedly ceased operations upon the transition to the TRON DAO governance model.

Nonetheless, on March 22nd, 2023, the U.S. Securities and Exchange Commission commenced a civil action in the Southern District of New York against Justin Sun and three affiliated companies—Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc. (formerly BitTorrent Inc.). The complaint alleges the unregistered offer and sale of crypto‑asset securities, wash‑trading designed to inflate market demand, and the orchestration of concealed celebrity‑endorsement campaigns in violation of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934.

As reflected in the joint letter filed on 26 February 2025, the parties in SEC v. Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. asked Judge Ramos to stay the action for sixty days so they could pursue a potential resolution, emphasizing that a stay would conserve judicial resources and postpone any ruling on the defendants’ pending motion to dismiss. No settlement has yet been announced, and on 28 April 2025 the Court granted a second sixty-day stay. Defendants continue to assert that the lawsuit lacks merit and should be dismissed in its entirety.

There was a further stay of 60 days granted by the court on April 28. The suit has no inherent merit and we strongly believe it should be dismissed entirely.

The functions of TRON Tech Limited, Tron Network Ltd., and any other entity established to facilitate the network’s operations cannot be conclusively discerned absent authoritative clarification from Tron representatives. We are actively seeking supplementary corporate documentation and monitoring the federal docket for further developments in the SEC action; any material information obtained will be reported to the DAO without delay.

3. Onchain discoverability

Sources of Tron information include (but are not limited to):

Explorers: Tronscan
Analytics: Token Terminal, Dappradar, Geckoterminal, DeFiLlama, Arkham Intelligence, and Nansen
Data Indexers: Dune, TronWeb, and Tronql

4. Impact of AAVE Deployment

The lending market on Tron is underdeveloped, with JustLend representing the entire market. A Tron deployment would enable Aave to enter a very active ecosystem, given its status as one of the largest chains by TVL, stablecoin supply, and active users. Aave could benefit from its established market position by attracting more active DeFi users to the chain and introducing more multichain assets. The lending market TVL has not translated into active borrowing from existing users, with only a 4% utilization of the available supply. Additionally, available network assets are largely Tron-based, with some bridged variants with low onchain liquidity.

5. Asset suggestions

Three key criteria influence our methodology for onboarding assets: prior successful integration, risk assessment within the Aave ecosystem, asset TVL on the network, and the available liquidity relative to the total asset TVL.

Asset Onchain Supply DEX Liquidity
USDT 71.7B $61M
WTRX 1.63B $234M

These have been selected due to being the most readily available and utilized on the chain. Other major assets on the network, such as ETHB, WETH, USDJ, USDD, and BTC, have not been considered, given security considerations that would require further assessment, e.g., bridged variants/mechanisms and stablecoin collateralization. The suggested supply cap for WTRX should be determined following a risk assessment.

Disclaimer

Note: This assessment follows the LLR-Aave Framework, a comprehensive methodology for asset onboarding and parameterization in Aave V3. This framework is continuously updated and available here.

This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.

The information provided should not be construed as legal, financial, tax, or professional advice.

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Overview

Chaos Labs supports the deployment of an Aave instance on Tron. This report provides a detailed examination of Tron’s technical specifications and the associated risks.

Technical Architecture

Tron is an EVM-compatible Layer-1 blockchain that employs a Delegated Proof of Stake (DPoS) consensus mechanism. Tron adopts a modular three-layer architecture consisting of the Storage Layer, Core Layer, and Application Layer. The Storage Layer includes both block and state storage components, utilizing LevelDB for efficient persistent storage and KhaosDB in-memory structures to manage temporary forks and enhance chain stability.

The Core Layer handles key blockchain logic such as smart contract execution, account management, and consensus. It features a stack-based virtual machine and runs a DPoS consensus model. The Application Layer facilitates the deployment and execution of DApps and custom wallets. Communication across these layers is standardized using Google Protocol Buffers (Protobuf).


Tron Architecture

Resource Model

TRON uses a staking-based resource model to manage execution costs and prevent abuse, replacing direct transaction fees with the allocation of Bandwidth and Energy. Bandwidth represents the byte-size of data stored on-chain. Users receive a daily allotment of 600 free Bandwidth, but for sustained activity, they must stake TRX to obtain additional resources. The amount of Bandwidth obtained is proportional to a user’s stake relative to the network, computed as: Bandwidth = (TRX staked for Bandwidth / Total TRX staked for Bandwidth) × 43,200,000,000. Energy reflects the computational workload required by the TRON Virtual Machine (TVM) to execute smart contracts. Each instruction within a transaction consumes a specific amount of Energy, and contracts with more complex logic require more. Users do not receive free Energy and must stake TRX to obtain it. The amount of Energy a user receives is proportional to the amount of TRX staked relative to the total network, calculated as:Energy = (TRX staked for Energy / Total TRX staked for Energy) × 180,000,000,000. When a transaction is processed, the network first deducts any Energy obtained through staking; if this is insufficient, TRX is burned at a fixed rate of 210 sun per unit of Energy, where 1 TRX = 1,000,000 sun. Energy gradually regenerates over 24 hours.

To ensure fair distribution, TRON employs a Dynamic Energy Model that adjusts the cost of contract execution based on network usage. Contracts that consume excessive Energy in one maintenance cycle are penalized with a higher energy_factor in the next, increasing the Energy required to call them. This penalty is capped (max_factor = 3.4) and gradually decays if usage drops. The final Energy consumed by a transaction is calculated as: Energy used = Base Energy × (1 + energy_factor) . The model uses three key parameters: a threshold (5,000,000,000 Energy) that defines excessive use, an increase_factor (e.g., 0.2) that scales up energy_factor if overused, and a decrease_factor (¼ of the increase) to reduce energy_factor when usage normalizes. For example, a popular contract that exceeds the threshold will require more Energy in the next cycle, while inactive ones become cheaper to call again.

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Maintenance Time Interval

DPoS

TRON uses a Delegated Proof of Stake (DPoS) system, where TRX, the network’s native token, is staked to support governance and allocate network resources. TRX holders participate by staking their tokens to receive TRON Power (TP), which grants them voting rights to elect Super Representatives (SRs) every 6 hours. In return for staking, users gain access to Bandwidth and Energy as described above, as well as a share of voting rewards distributed by SRs and SR partners. These rewards are paid in TRX and allocated proportionally based on voting weight, minus a small commission retained by the SR. The top 27 SRs by total votes become active block producers, responsible for transaction validation, governance, and earning protocol-level rewards. Staked TRX can be unstaked at any time, but is subject to a 14-day unfreezing period, after which the tokens become withdrawable. A user may have up to 32 unstaking operations pending simultaneously, and unstaked tokens are not usable until the waiting period elapses. DPoS in TRON offers higher performance by limiting the validator set, producing blocks every 3 seconds, and scaling up to ~2,000 TPS.

Super Representatives (SRs) are the elected block producers and governance authorities in TRON’s DPoS system. Any TRON account can become an SR candidate by paying a 9,999 TRX application fee and registering on-chain. Every 6 hours, the 27 candidates with the most votes become active SRs, responsible for validating transactions, producing blocks, and proposing or voting on network parameters. SRs receive two types of rewards: a block production reward of 16 TRX per block and a voting reward drawn from a 160 TRX pool per block. These are distributed proportionally based on vote weight. The block reward is earned only by the SR who produces the block, while the voting reward is shared among all SRs and SR partners, ranked 28–127, according to their total votes. Both rewards are split with voters after deducting a brokerage commission set by each SR or partner (defaulting to 20%, but configurable). For example, if an SR receives 10% brokerage, they retain 10% of rewards and distribute the rest to voters. At peak capacity—producing a block every 3 seconds—TRON distributes up to 460,800 TRX per day in block rewards and 4,608,000 TRX per day in voting rewards. Candidates ranked 28–127, known as SR partners, do not produce blocks but still receive and share voting rewards. SRs must operate full TRON nodes to participate in consensus and remain eligible. Beyond validation, SRs have exclusive voting rights on protocol governance proposals, such as modifying fees, block rewards, or enabling TVM features.

Below, we present the top 10 SRs on the TRON network at the time of this writing, ranked by total votes received.


Tron Top SR

Transaction

In TRON, transactions are structured in a serialized format containing fields such as raw_data, which includes the contract type, reference block bytes and hash, expiration time, optional memo data, and a fee_limit for smart contract energy usage. After signing with the sender’s private key, the transaction is broadcast to the network and placed in a node’s mempool. SRs select transactions for inclusion in blocks every 3 seconds. A transaction achieves final confirmation once 19 unique SRs have built blocks atop the block containing the transaction. All transactions consume Bandwidth, measured in bytes, while those invoking or deploying smart contracts also consume Energy. When resource balances are insufficient, TRX is burned at fixed rates—1000 sun per byte for Bandwidth and 210 sun per unit for Energy. Internal transactions, triggered during smart contract execution, encapsulate sub-operations like token transfers, staking, or governance actions and are recorded only if nodes are configured to persist them.

Ecosystem and Market

Since its inception, the TRON ecosystem has shown steady growth, reaching a peak TVL of approximately $15B in late 2024. Although its TVL has declined since the start of 2025, it has consistently remained above $5B. As of now, TRON holds the fourth-largest bridged TVL among all Layer 1 chains, behind only Ethereum, Bitcoin, and Solana. At the time of writing, TRON’s total DeFi TVL stands at approximately $5.25B.


Tron TVL Over Time

The number of active addresses on TRON has remained consistently robust, averaging around 3M daily over the past year.


Tron Active Address Over Time

Monthly total transactions on TRON have shown a steady upward trend since the network’s inception. Although there was a brief decline between late 2023 and early 2024, transaction volume quickly rebounded and has since remained above 200M per month. As of April 2025, total transactions on TRON reached approximately 250M.


Tron Monthly Transactions Over Time

Applications & Tooling

The TRON ecosystem encompasses a broad range of tools and DApps, including DEXs, lending protocols, and infrastructure services. In the sections below, we highlight some of the most established and widely used resources on TRON, with a focus on DeFi applications, aggregators, block explorers, and analytics platforms

Defi

The most popular and highest TVL DeFi project on TRON is JustLend, with a TVL of $3.88B at the time of writing. Launched on December 7, 2020, JustLend is the first officially introduced decentralized lending within the TRON ecosystem. It establishes liquidity pools and sets interest rates algorithmically based on the supply and demand of TRON-based assets. The platform supports deposits of TRX, USDT, USDD, SUN, WIN, BTC, JST, and other assets, allowing users to earn interest or use them as collateral for borrowing. Currently, the most active markets on JustLend include TRX/USDT, JST/USDT, and SUN/USDT.

Aggregators

One of the more popular aggregators on TRON is Rango Exchange. It provides cross-chain aggregation services, enabling users to swap assets between TRON and other major blockchains by integrating both DEX and bridge functionalities into a single interface.

Block Explorers

TRON provides TRONSCAN as its official block explorer, offering users a comprehensive view of the TRON blockchain. Through TRONSCAN, users can monitor real-time data such as transactions, block production, account balances, Super Representative metrics, and smart contract activity. It also includes features like internal transaction tracking, staking insights, governance proposal monitoring, and wallet integration.

Analytics

Analytics platforms provide structured data and visualizations to monitor TRON’s network activity and performance. IntoTheBlock offers real-time analytics on TRON, including on-chain metrics and market indicators. Footprint Analytics supports TRON with dashboards that display transaction volumes, user behavior, and contract activity. Additionally, Dune hosts dashboards that visualize TRON data.

DEXes

The DEX ecosystem on TRON is currently led by SunSwap, which holds a dominant position, while all other platforms maintain less than $1M in TVL. As a core product of the broader Sun Ecosystem, SunSwap is complemented by additional features such as yield farming and liquidity incentives. At the time of writing, SunSwap supports approximately 25K active trading pools and records a 24-hour trading volume of $772M.

Below, we present a breakdown of SunSwap’s TVL and trading activity, followed by a brief overview of the two next-largest DEXs on the TRON network.

  • SunSwap
    • TVL: $676.3M
    • 7-Day Cumulative Volume: $1.7B
  • JustMoney
    • TVL: $715.9K
    • 7-Day Cumulative Volume: $13.47K
  • Bridgers
    • TVL: $707.4K
    • 7-Day Cumulative Volume:

Token

The purpose of this proposed token list is to ensure the new instance launches with essential baseline functionality. Among the two assets we recommend—USDT and TRX—USDT has already undergone multiple rounds of review and integration across various Aave instances. In contrast, TRX, the native token of the TRON network, has not been previously assessed. A general overview of both assets is provided below, with a dedicated risk evaluation for TRX included later in this document.

At this time, we do not recommend listing ETH or BTC due to insufficient liquidity on TRON. The primary ETH trading pool—the TRX/ETH pair on SunSwap—has a TVL of just $133K. Similarly, BTC’s main pool—the BTC/USDT pair on SunSwap—currently supports only a 0.5 BTC sale with less than 5% slippage. Given these limitations, we recommend continued monitoring of ETH and BTC liquidity on TRON. Should conditions improve and community demand emerge, we will provide appropriate parameters based on updated market data.

Asset Supply Market Cap Sell Liquidity Link to Asset
USDT 72,709,171,826 $72.73B $160.76M Link
WTRX 1,647,215,853 $403.55M $126.10M Link

WTRX

TRX is the native utility token of the TRON blockchain and underpins its core economic and operational mechanisms. While not a smart contract token itself, TRX is used to acquire essential network resources—Bandwidth and Energy—through staking, which are required for data transmission and smart contract execution via the TRON Virtual Machine (TVM). Staking TRX also grants TP, enabling holders to participate in governance by voting for SRs. TRX serves as a primary asset across the TRON DeFi ecosystem, functioning as both a medium of exchange and collateral. When a user’s free or staked resources are insufficient, TRX is burned to pay for computational or storage costs, enforcing economic limits on resource usage. WTRX (Wrapped TRX) is the TRC-20-compliant representation of TRX, implemented via smart contract to ensure compatibility with dApps and DeFi protocols that require tokenized interfaces.

As of now, the total supply of WTRX on TRON stands at 1.66B, translating to a market cap of $405M. Over the past three months, WTRX has shown stable on-chain activity, with an average of over 10K daily transfers and more than $600M in daily transferred volume.


WTRX Transfer Activity Over Time

In addition, the number of WTRX holders has remained stable with a consistent upward trend. As of the time of writing, the total number of holders stands at 13K.

Below, we present TRX’s volatility over the past year. From the chart, TRX has exhibited notable price fluctuations, with a daily annualized volatility of approximately 104%, indicating considerable long-term variability. Over the short term, the 30-day annualized volatility stands at around 36%, suggesting a relatively more stable yet still meaningful level of recent price movement. The minimum daily return of -20.9% highlights sharp drawdowns during extreme market conditions. Overall, this suggests that TRX remains a volatile asset, with measurable risk present even over shorter time frames.

Listing Parameter

We recommend aligning the USDT parameters with those used in other major Aave deployments.

As for WTRX, although its on-chain activity has remained relatively stable, its price volatility warrants a conservative initial approach. Therefore, we suggest setting an initial LTV ratio of 55% and a LT of 60%.

Chaos Labs will continue monitoring the asset and propose changes to the initial parameters if warranted.

Supply and Borrow Caps

Following Chaos Labs’ methodology for establishing initial supply caps, we propose setting the cap at 2x the liquidity measured at a price impact equal to the asset’s Liquidation Penalty. However, given the volatile nature of WTRX, we recommend setting its cap at 1x the liquidity under the Liquidation Penalty.

For borrow caps, we suggest setting them slightly above each asset’s UOptimal level to provide room for the borrow rate to rise in response to increased demand.

Interest Rate

We recommend aligning the USDT interest rate parameters to those of stablecoins across all other Aave Instances, and setting WTRX Slope 1 slightly below the average staking yield for the asset to incentivize future use for Tron LRT looping.

Oracle

We recommend utilizing the Chainlink price feed to price the proposed assets on TRON.

Specification

Parameter Value Value
Asset WTRX USDT
Isolation Mode No No
Enable Borrow Yes Yes
Enable Collateral Yes Yes
Loan To Value 55% 75%
Liquidation Threshold 60% 78%
Liquidation Penalty 10% 5%
Reserve Factor 15% 10%
Liquidation Protocol Fee 10% 10%
Supply Cap 200,000,000 120,000,000
Borrow Cap 100,000,000 110,000,000
Debt Ceiling - -
UOptimal 80% 90%
Base 0% 0%
Slope1 7% 5.5%
Slope2 300% 40%
Stable Borrowing No No
Flashloanable Yes Yes
Siloed Borrowing No No
Borrowable in Isolation No Yes
E-Mode Category N/A N/A

Disclaimer

Chaos Labs has not been compensated by any third party for publishing this ARFC.

Copyright

Copyright and related rights waived via CC0

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Following our discussion with TRON, they have raised the payouts listed on their HackerOne program: effective 14 May 2025, low-severity reports can earn up to US $2,000, medium up to $10,000, high up to $25,000, and critical up to $100,000, with final amounts determined under CVSS guidelines at TRON DAO’s discretion.

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