Opinion
Tron will "collaborate" with Japanese authorities. What does that mean, exactly? Image from Shutterstock.

Tron Foundation Pledges to “Collaborate” With Japanese Regulators

By CCN.com: Following the fiasco with the Tesla drawing, Justin Sun’s Tron Foundation has issued a statement on the Japanese market. The Japanese government has yet to finalize its ICO regulations, but the most recent news on that front is the issuance of guidelines by a local blockchain business association.

No Tron Gambling for the Japanese

In a note to the Tron community, the Tron Foundation strongly discourages Japanese dApp developers from creating anything resembling gambling. They write:

TRON suggests Japanese DApp developers not develop any gambling DApps on TRON’s platform […] TRON suggests developers who are working on gamling [sic] apps block users with Japanese IP addresses. Please do not facilitate the use of gambling apps among Japanese users.

In an unusual move, the Tron Foundation also pledges to “collaborate” with Japanese regulators if any issues arise. The note seems to come out of the blue, as Japan is still in the process of developing a regulatory framework for cryptocurrencies generally. The Tron network currently consists mainly of gambling and “high-risk investment” platforms. The latter are definitively more negative than gambling, as the term is used to cover what essentially amount to formalized Ponzi schemes.

Tron dApp usage is rather incredible by comparison to more established platforms like Ethereum, with a much higher take-up than Ethereum generally. However, according to the latest weekly report by RatingDapp, Ethereum dApp usage increased an impressive 40+% thanks to a single live streaming dApp. Tron usage dropped over the previous week, but it and EOS are still far ahead of Ethereum.

Tron To Cut Its Growth Off At the Knees?

There are many factors which contribute to the slower dApp growth of Ethereum. For one thing, the risk of using Ethereum for dApps is higher since the value of the base token is so much higher. For another, Tron and EOS both process transactions at a much faster pace than Ethereum. Ethereum founder Vitalik Buterin has referred to platforms like Tron and EOS as “centralized piles of trash” due to the architecture of their networks, which might be semi-centralized in comparison to the vastly decentralized nature of Ethereum.

Still, users prefer fast results, especially when it comes to things like on-chain gambling. Even a 15-second confirmation (along with a variable gas fee) can be a downside for many users. Many successful Ethereum dApps resort to using some form of deposit system as well as integrating native tokens.

Tron’s willingness to co-operate with regulators sets it apart from other decentralized platform backers. “Collaboration” can mean so many things. Will Tron blacklist addresses associated with gambling and Japanese IP addresses?

Will every jurisdiction in the world get the same treatment? What does it say about a decentralized foundation that it’s willing to support the whims of a government over the demands of network participants? After all, if gambling is illegal somewhere, it’s between the citizen and his government. Not the gambling provider and the participant and the government. And indeed not between the platform and the government.

How far does such logic extend? You used the Internet, so your internet service provider is also on the hook? You created your account with an e-mail address, so your e-mail provider is also implicated?

To make protocol-level changes to blacklist regions and IP addresses, Tron’s voting system would come into effect. People earn Tron power by freezing tokens on the blockchain. It seems unlikely that a super representative who would vote in favor of such moves would get many votes from a community whose primary aspect of growth has been gambling. Websites like Tronbet.io do millions of dollars in volume per day and have a dedicated following.

Also, what’s next for “collaboration”? Decentralized exchanges? Token generation? Tron itself? Where does it end?

Tron Foundation has set itself atop a slippery slope with this seemingly innocent note.

Disclaimer: The views expressed in this article belong solely to the author and should not be attributed to CCN.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.


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