TRC20 vs ERC20 - What’s the difference between USDT ERC20 and TRC20 - Core.allbridge.io (2024)

What is TRC20?

TRC20 is a token standard used for token issuance on the Tron network. Tron’s TVM (Tron Virtual Machine) is EVM-compatible. However, there are specific differences in the TVM characteristics, particularly in its network fee structure. For example, unlike the EVM, TVM uses energy instead of gas, with TRX acting as the ecosystem gas token.

What is Tron?

Tron is an open-source, public blockchain platform enabling the support of smart contracts. Tron Protocol offers public blockchain support and enables high throughput, high scalability, and high availability for dApps built within the Tron ecosystem. In 2018 the Tron ecosystem also expanded with the acquisition of BitTorrent.

What is ERC20?

ERC20 is a token standard that implements API functionality for tokens within Ethereum smart contracts. It enables the transfer of tokens between different accounts, getting the current token balance of an account, allowing the approval on whether the funds can be spent by a third party account, and much more.

What is Ethereum?

Ethereum is a platform for building apps and organizations, holding assets, transacting, and communicating without being controlled by a central authority. Following the “Merge,” it operates under the Proof-of-Stake consensus model, which has superseded the original Proof-of-Work consensus.

A certain amount of staked ETH is required to add blocks to the chain. After the staking requirement is fulfilled, they can be randomly selected to propose blocks to other validators.

Tether TRC20 vs ERC20

In the next section, we would like to explore the TRC20 and ERC20 token standards and identify some of the key differences between the two of them. Allbridge Core offers the support of multiple networks and tokens, and it is important to illustrate the advantages they possess. We will go over the consensus mechanisms first to see how they have changed after the “Merge” event, which introduced significant changes to the Ethereum protocol.

What is TRC20?

TRC20 is a token standard used for token issuance on the Tron network. Tron’s TVM (Tron Virtual Machine) is EVM-compatible. However, there are specific differences in the TVM characteristics, particularly in its network fee structure. For example, unlike the EVM, TVM uses energy instead of gas, with TRX acting as the ecosystem gas token.

Consensus mechanisms and token standards

Before we dive into the Merge, we would like to briefly go over what is TRC20 and ERC20. TRC20 is a token standard for issuing tokens on the Tron network, while the Ethereum ecosystem uses the ERC20 token standard. We will look over the details of each blockchain to identify the key differences between them.

Tron and Ethereum have different consensus mechanisms. The recent update to the Ethereum network, also known as “The Merge,” has implemented a new consensus algorithm. Initially, Ethereum launched with the Proof-of-Work architecture, but the latest update merged it with the Beacon Chain, changing its consensus model to Proof-of-Stake and significantly reducing its energy consumption by 99%.

As for Tron, it is based on the Delegated Proof-of-Stake mechanism, also known as DPoS, distinguishing it from the Ethereum network. Tron’s TVM (Tron Virtual Machine) is EVM-compatible. However, there are specific differences in the TVM characteristics, particularly in its network fee structure.

When comparing TRC20 vs ERC20 fees, Tron is a clear winner, as the transaction costs are cheaper. The differences in transaction costs are also one of the reasons why cross-chain swaps appeal to users who are seeking to transfer their assets to less expensive chains

The difference between Tron and Ethereum blockchains

Another aspect that distinguishes Tron and Ethereum is their scalability. The future updates to Ethereum will implement sharding, which was not technically possible when it used to operate under Proof-of-Work. The new sharding technology will enable the more efficient distribution of compressed calldata from rollup contracts. While in the case of Tron, the scalability remains limited due to its underlying technology.

The differences are also becoming apparent if we consider the wallet addresses. Both of the chains have their own set of unique prefixes for addresses. In the case of the Ethereum blockchain, addresses have the established prefix “0x”, while the Tron ecosystem addresses have a distinctive prefix “T” in the beginning.

Stablecoin transfers with Allbridge Core

Now that we covered the differences, we would like to address how Allbridge Core enables cross-chain interoperability between Ethereum and Tron for those users who seek to freely move their assets between the two chains.

Our platform provides a convenient tool to swap native stablecoin liquidity between Ethereum and Tron chains, offering cross-chain transfers of USDT, USDC, as well as BNB Chain BUSD and Solana USDC.

As a messaging agnostic protocol, Allbridge supports Wormhole and custom Allbridge messaging, enabling the cross-chain swaps between Tron and other non-EVM chains. This makes it possible to convert Tron’s native USDT into the USDT on Ethereum and establish more opportunities for cross-chain interoperability. At the same time, the availability of multiple messaging protocols adds an extra layer of decentralization.

Convenient user experience

Moreover, due to the innate liquidity rebalancing functionality, every time native tokens are exchanged for virtual ones, the price of the native tokens decreases. This incentivizes users to swap the bridged assets back to the original chains, thereby rebalancing the liquidity pools.

To perform a cross-chain swap, one has to indicate the desired networks and tokens in the bridge interface. Once the transaction is initiated, the assets are exchanged on the source chain network to the virtual value transfer tokens. These tokens transfer the information via the selected messaging protocol.

When the message arrives, it triggers the contract on the destination blockchain. Then the virtual tokens are swapped into the desired asset, and native stablecoin assets are credited to the user's wallet. By streamlining all of the bridging steps into a single transaction, Allbridge Core seamlessly transfers assets between Tron and Ethereum networks in a non-custodial and private way.

Find out how Allbridge Core works under the hood in the corresponding GitBook section.

Conclusion

With Allbridge Core, you can seamlessly exchange your stablecoin assets between Tron and Ethereum networks. Our platform offers a simple and intuitive interface to facilitate cross-chain stablecoin transfers in one click, which makes it very user-friendly.

Future updates to the bridge functionality will include the option to convert some part of the transferred amount into a gas token, thus further reducing the barriers to entry into the new chain.

We invite you to check the bridge functionality and try swapping between TRC20 and ERC20 via our platform.