What is TRC20? An in-depth explanation

What is TRC20?

TRC20 is a technical standard for tokens issued on the Tron blockchain. You can compare it to a set of rules that every token on Tron has to follow. Thanks to this shared standard, wallets, exchanges, smart contracts, and dApps know exactly how to interact with such a token. It is the same idea as ERC-20 on Ethereum, but specifically designed for the Tron network, which is known for its speed and low costs.

When you send USDT (Tether) via the Tron network, you are actually sending a TRC20 token. This standard defines how that token behaves, how it is deposited and transferred, and how smart contracts can communicate with it.

Key Takeaways

• TRC20 is the token standard of the Tron blockchain, similar to ERC-20 on Ethereum, and provides uniform rules so that wallets, exchanges, and smart contracts can work with tokens without issues.
• TRC20 tokens are technically smart contracts with fixed functions such as totalSupply, balanceOf, and transfer, running on the fast and low-cost Tron Virtual Machine (TVM).
• Its popularity mainly comes from extremely low fees, high speed, and broad exchange support, which has made USDT-TRC20 the dominant global route for stablecoin transfers.
• Advantages include low fees, fast transactions, EVM compatibility, wide stablecoin adoption, and energy efficiency, while disadvantages involve limited decentralization, dependence on USDT, and smart contract risks.
• TRC20 tokens are widely used for payments, stablecoin flows, DeFi applications, and fast exchange transfers, which makes it one of the most widely used standards in crypto.

Why does TRC20 exist?

Blockchains cannot just support arbitrary tokens. Without fixed rules, every token would work differently, which would be a big mess. TRC20 therefore offers:

• Uniformity
  Everyone uses the same basic functions on a blockchain.
• Compatibility
  Wallets and dApps do not have to reinvent how to handle a token each time.
• Reliability
  Smart contracts know exactly which functions exist and how data is provided.

The goal is simple: a stable and predictable way to create tokens on Tron.

How does a TRC20 token work technically?

To understand how TRC20 works, you should see it as a smart contract template. Every TRC20 token is essentially a smart contract with a fixed set of functions. These functions determine among other things:

• how many tokens exist (tokenomics)
• how many tokens a wallet holds
• who is allowed to send tokens to whom
• how permission is given to send tokens on someone else’s behalf

Step 1. Create a contract according to TRC20 rules

The creator of a token writes a smart contract (in a Solidity-like syntax, because Tron’s Virtual Machine is heavily based on the EVM).

This contract defines things such as:

• totalSupply: the total number of tokens
• name and symbol: for example “USDT” or “TRON”
• balanceOf: who owns how many tokens
• transfer: how a wallet sends tokens

If the contract complies with the TRC20 standard, it can be accepted by the network.

Step 2. The contract is deployed on the blockchain

Once it is on Tron, the token is live and wallets and dApps can interact with it. From that moment on, the smart contract does not change anymore, because code on a blockchain is immutable. You cannot simply change all the rules after launch, which is also reassuring if you use DeFi applications.

Step 3. Wallets and apps recognize it automatically

Because TRC20 is a uniform protocol, all Tron-compatible services know exactly:

• how to read the balance
• how to send transactions
• how to execute contract interactions

That is why a token like USDT on Tron works just as smoothly in your wallet as TRX itself.

The role of the Tron Virtual Machine (TVM)

TRC20 runs on top of the TVM (Tron Virtual Machine). This is the runtime environment that executes smart contracts, almost identical to the Ethereum Virtual Machine (EVM). As a result, it works:

• very fast
• efficiently
• cheaply

Every transaction consumes “bandwidth” or “energy”, but this is typically extremely low compared to Ethereum. Tron has become very popular in recent years and has grown into a top 10 cryptocurrency.

What makes TRC20 popular?

You have probably already seen it: many crypto users choose “USDT-TRC20” when sending stablecoins. That is not a coincidence. TRC20 has become hugely popular because of a combination of three key properties.

1. Transaction fees are extremely low

A TRC20 transaction often costs less than a few cents. Sometimes virtually nothing if you have enough “bandwidth” staked. This makes it ideal for:

• international payments
• arbitrage
• fast transfers between exchanges

For many users, TRC20 is simply the cheapest way to move value. The network is also well integrated with other blockchains, so you can easily bridge assets to and from the Tron network.

2. Transactions are fast

While some blockchains take half a minute to confirm, Tron is focused on high throughput. Transactions are often confirmed within a few seconds.

This gives TRC20 a big advantage for platforms that:

• need to react in real time
• need to keep cost structures low
• cannot afford delays

3. Large ecosystems and broad support

Tron is integrated into practically every major exchange. That means TRC20 tokens:

• are easy to trade
• can be sent quickly between platforms
• have a huge user base

Stablecoins such as USDT run massively on TRC20, which continuously grows the ecosystem.

Advantages of TRC20

1. Very low transaction fees
The biggest plus: TRC20 transactions are almost always cheap, while ERC-20 on Ethereum often has higher fees.

2. Fast transactions and high capacity
The Tron network can process many transactions per second, so delays are rare.

3. EVM compatibility
Developers who already work with Ethereum can easily switch. The development tools are very similar.

4. Strong adoption among stablecoins
USDT on TRC20 is extremely popular, which brings high liquidity and usefulness in day-to-day use.

5. Energy-efficient consensus mechanism
Tron uses Delegated Proof of Stake, which allows transactions to be processed quickly and in an energy-efficient way.

Disadvantages of TRC20

1. Limited decentralization
The network runs on a small number of “super representatives” that produce blocks. For crypto purists, this can be a risk.

2. Dependence on USDT
The success of TRC20 is strongly tied to the success of Tether. That offers economies of scale, but also creates a possible single point of failure.

3. Smart contract risks
As with all token standards, there can be bugs in the smart contract, or there is a

4. Less advanced DeFi than Ethereum
Tron does offer DeFi, but lags behind Ethereum in terms of innovation and complexity. TRC20 is therefore more often used as a transaction standard than as an innovation platform. The majority of this activity still happens on Ethereum or EVM-compatible blockchains.

What can you do with TRC20 tokens?

In practice, TRC20 tokens are used in many different ways. Thanks to low costs and high speed, they are particularly suitable for payments such as international transfers, salary payments, e-commerce, and B2B transactions. Especially in regions where traditional payment methods are expensive or slow, TRC20 provides an attractive alternative. A large part of the usage also revolves around stablecoin flows: USDT on TRC20 is now one of the most popular ways to send digital dollars, especially in countries with high inflation or limited access to traditional banking.

TRC20 tokens also play a role in the DeFi world on Tron. Users can engage in activities such as lending, staking, providing liquidity, or yield farming, even though the Tron ecosystem is smaller and less advanced than Ethereum’s. It still offers plenty of opportunities for those who value simplicity and low costs. Finally, TRC20 is widely integrated with major crypto exchanges, so deposits and withdrawals are often very fast and cheap. All of this makes TRC20 a practical and globally used token standard in the crypto space.

Why is TRC20 so cheap?

The low costs come from:

• DPoS consensus model: blocks are cheap to produce.
• Resource model: users can stake energy and bandwidth.
• High efficiency: Tron is designed for scalability.

As a result, transactions almost never end up in long queues.

TRC20 vs ERC-20: the comparison

Although TRC20 looks very similar to ERC-20, there are a few key differences.

The standards themselves are technically very similar, but the experience for users is completely different because of the environment in which they run.

Are TRC20 tokens safe?

In principle, the Tron network is safe. The standard itself is solid and Tron is a technically stable network. But security always depends on three things:

• The quality of the smart contract
• How reliable the token issuer is
• How safely you manage your wallet

As always in crypto, the technology is only as safe as the weakest link in the chain. That means a project or coin is not automatically trustworthy just because it is on the

Final thoughts

TRC20 is one of the most widely used token standards in the world, mainly thanks to the explosive growth of USDT on the Tron network. The technology is built around speed, efficiency, and low costs, which is exactly what most users are looking for when they want to send money or manage stablecoins.

The network offers a fast and low-cost experience, although there are valid concerns about decentralization and dependence on a few major players. Even so, TRC20 has grown into one of the most important links in today’s crypto infrastructure.

In short, TRC20 makes it possible to build tokens on Tron that are predictable, fast, cheap, and widely usable. It is a crucial standard for payments, stablecoins, dApps, and the huge amount of value that flows over the Tron network every day.