TRON Ecosystem Attempts to log in to NASDAQ: A Controversial Financial Drama

The TRON ecosystem is attempting to log in to Nasdaq in a special way, which is not just an ordinary business operation, but rather a complex game that integrates cryptocurrency, financial strategies, and even political influence.

TRON and its founder have always given a contradictory impression. On one hand, they are constantly in controversy within the crypto community, such as the USDD depegging incident and the TUSD turmoil. On the other hand, the TRON network and the TRX token have developed rapidly, especially as the largest issuing chain of USDT, bringing enormous wealth. This contradiction is key to understanding the market prospects of TRON.

The Impact of Political Factors

The choice of TRON to promote its listing at the current moment is not a coincidence, but the result of multiple intertwined factors.

First of all, this seems to be an imitation of a model used by a well-known listed company. The company successfully transformed its stock into a tradable crypto asset "proxy" on traditional stock exchanges by incorporating Bitcoin into its balance sheet. TRON clearly hopes to replicate this model, allowing the newly established listed company to become a compliant channel for American investors to access and invest in TRX, attracting a large amount of institutional funds.

However, the most critical factor is the current political climate "window period." The founder of TRON has faced regulatory pressure, especially from the fraud and market manipulation lawsuits in 2023. But just four months before the announcement of the merger, this lawsuit was surprisingly "paused." This pause coincides closely with the timing of a massive strategic investment in a company associated with a certain political family.

This means that TRON has secured a "safe window" protected by political factors for itself. They must seize this opportunity to complete their listing using the fastest and relatively lenient method of reverse merger (RTO). Because the traditional IPO path is almost unfeasible considering the previous detailed and confident allegations.

However, this also lays a huge political risk. Once the political winds change, lawsuits could be reactivated at any time, which could deal a devastating blow to newly listed companies.

The Essential Differences of Imitation Mode

The core strategy of the newly listed company in TRON is to emulate a well-known company by holding TRX tokens as reserves in the company’s treasury. However, there are fundamental differences and inherent risks involved.

Bitcoin is a widely distributed decentralized digital commodity with no centralized issuer. Its value does not depend on any single entity. In contrast, TRX is an asset created by specific individuals, with its associated entities holding a large amount and having deep control over it.

This raises the most critical conflict of interest. When a listed company uses the funds of public market investors to purchase TRX, it is equivalent to a company using investors' money to buy assets issued by its own founder. This can create a dangerous self-reinforcing cycle: when the listed company buys TRX, it can directly support the price of TRX, and the increase in TRX's price will, in turn, boost the book value of the company's treasury, while also causing the value of TRX held by insiders to soar. This structure raises serious concerns about corporate governance and financial management. Investors have reason to question whether the management decisions of the company's treasury prioritize the price of TRX tokens over the maximum interests of shareholders.

The Division Between Tools and Trust

To understand the future of this new stock, we need to distinguish between two types of past business of TRON:

1. Successful business (such as the TRON blockchain itself): The reason TRON can attract huge trading volume, especially becoming the largest chain in USDT issuance, is because it offers extreme "tool value". Its main users, particularly in emerging markets, have a core demand for transferring US dollar stablecoins (mainly USDT) at the lowest possible cost and the fastest speed. The technical characteristics of the TRON blockchain perfectly meet this demand: transaction fees are almost negligible, and transaction speeds far exceed those of competitors. In this simple peer-to-peer transaction process, the personal credibility of the founder, past controversies, and even the degree of decentralization of the network become less important. What users trust is the USDT itself (backed by the issuer) and the reliability of the blockchain protocol. Therefore, the success of the TRON blockchain is a victory of product-market fit, rather than a victory of the founder's personal charm. It is a successful infrastructure.

2. Failed or controversial businesses (such as USDD stablecoin, TUSD turmoil, etc.): These are financial products/trust-based businesses. The key to their success lies in the need for users to have a high level of trust in their governance, transparency, and risk management capabilities. However, it is precisely in these areas that the founder's reputation becomes a fatal shortcoming. Taking USDD as an example, it has been de-pegged multiple times, its collateral calculation method has been criticized for being opaque, and it unilaterally adjusted the reserve composition without community voting. These actions have directly destroyed users' trust in it as a "stable" asset. What users fear is not the transfer of funds, but the collapse of the value of the assets in their hands due to opaque operations.

Insights for Investors

The newly listed company of TRON, in essence, is closer to a failed "trust-based business" rather than a successful "tool-based business". Investors buying this stock are essentially investing in a holding company heavily influenced by the founder who acts as an "advisor". This company uses the money from the listed company to purchase and hold tokens created and controlled by its founder. This requires investors to trust that the management will manage this treasury in a way that maximizes shareholder interests, rather than manipulating the TRX price for the benefit of insiders. This is entirely a trust-based value proposition.

• For speculators or hedge funds: This listing undoubtedly provides a high-risk, high-reward speculative opportunity. The shell company's stock price skyrocketed by over 500% in just a few days, indicating the enormous speculative enthusiasm in the market. For traders seeking high-volatility investment tools, this stock, due to its scarcity (the first Nasdaq stock directly linked to a top public chain), immense topicality, and its political connections, may create trading opportunities in the short term, offering a compliant exposure to the TRX ecosystem.

• For long-term value investors or institutional funds (like pensions): The prospects of newly listed companies are fraught with challenges and resemble a high-risk bet. A company's long-term success depends on sound governance, credible management, and a sustainable business model. New companies have inherent flaws in these areas, and their core "TRX treasury" strategy is filled with conflicts of interest, relying heavily on unstable political alliances for survival. Institutional funds such as pensions can invest in companies managed by positively perceived leaders that treat Bitcoin as an external asset. However, for stocks tied to founders who are themselves embroiled in controversies, and where core assets are closely bound to the founders' interests, rational value investors, especially those seeking stable returns, are likely to steer clear.

Is it just a "performance"?

The last question: Is this listing just another carefully orchestrated "performance" to generate news and short-term profits?

This aligns with the consistent superb marketing and hype skills of the TRON founder. From high-profile social events to purchasing expensive artworks, he has always been a "performer" who knows how to leverage news events to attract attention and capital. This listing itself is a sensational global public relations event.

Regardless of how the new company fares in the future, the parties involved have already gained tremendous short-term benefits from this "performance." The shell company's stock price skyrocketed by over 500% in just a few days. According to the agreement, certain related parties can acquire a large number of convertible preferred shares and warrants at a very low price. This means that, solely due to the surge in stock price, they have already achieved astonishing paper gains.

Therefore, promoting the listing of TRON is likely to be a plan that kills multiple birds with one stone. It is both an imitation of a certain well-known company's model and a regulatory arbitrage taking advantage of the political window period. However, its core may be more about a "financial performance" aimed at maximizing short-term profits. The founder may not be averse to the company's long-term success, but that may not be the primary goal. The primary goal may be to leverage the grand narrative of "listing" to quickly attract speculative capital from Wall Street under a political umbrella, creating a huge market hype for themselves and the TRX token, and in this process, achieve personal wealth appreciation through carefully designed financial instruments. As for the long-term fate of the new company, it seems more like a sequel that can be adjusted at any time according to political winds and market sentiments, full of uncertainty.

In summary, the new listing of the TRON company is a business that packages a successful "tool"—the TRON blockchain—into a financial product that requires a high degree of "trust." Its future depends less on how good the technology of the TRON blockchain is, and more on whether the market is ultimately willing to believe—or gamble—that the founder can become a qualified and trustworthy leader of a listed company. Given his past record in "trust-based business," this is undoubtedly a high-risk gamble.