The TRON ecosystem attempts to enter Nasdaq: opportunities and risks coexist

In the Web3 world, a captivating event is unfolding: the TRON ecosystem is attempting to land on Nasdaq in a unique way. This is not just a simple business operation, but rather a complex chess game that integrates cryptocurrency, financial strategies, and political influence.

TRON and its founder have always given a contradictory impression. On one hand, they are constantly embroiled in controversies within the crypto community, such as the USDD de-pegging event and the TUSD turmoil. On the other hand, the TRON network and the TRX token have developed rapidly, especially as the largest issuance chain for USDT, bringing considerable profits. This contradiction is key to understanding the listing prospects of TRON.

The Impact of Political Factors

The decision for TRON to promote its listing at this particular moment is not coincidental, but rather the result of multiple factors working together.

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

However, the more critical factor lies in the current political climate "window period". The founder of TRON has been facing regulatory pressure, especially the lawsuit in 2023. However, four months before the announcement of the merger and acquisition, this lawsuit was "paused". This pause coincides closely with its substantial strategic investment in a business affiliated 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 the listing through a rapid and relatively lenient review process known as a reverse takeover (RTO). Because the traditional IPO path, considering previous allegations, is almost unfeasible. It can be said that the regulatory "safe period" enjoyed by TRON at present is not based on legal compliance, but rather on political capital.

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

Differences Between Imitation and Essence

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

Bitcoin is a decentralized digital commodity that is widely distributed and has 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 exercising deep control over it.

This raises the most critical conflict of interest. When newly listed companies use funds from public market investors to purchase TRX, it is equivalent to a company using investors' money to buy assets issued by its founders. This creates a dangerous self-reinforcing cycle: the listed company buying TRX can directly support the price of TRX, while the rise in TRX's price will in turn increase the book value of the company's treasury, and also cause the value of TRX held by insiders to soar. This structure raises serious concerns about corporate governance and financial management.

The Divide Between Tools and Trust

In order to understand the future of the stocks of newly listed companies, we need to distinguish between two types of businesses that TRON has had in the past:

1. Successful businesses (like the TRON blockchain itself): The reason why TRON can attract huge trading volumes, especially becoming the chain with the largest issuance of USDT, is because it offers an extreme "tool value". It meets the needs of users for low-cost and fast transfers of dollar stablecoins. In this simple peer-to-peer transaction process, the personal credibility of the founder, past controversies, and even the level of decentralization of the TRON network become less important.

2. Failed or controversial businesses (such as USDD stablecoin, TUSD incident, etc.): These are financial products/trust-based businesses. Their success hinges on users' high level of trust in their governance, transparency, and risk management capabilities. However, it is precisely in these areas that the founder's credibility becomes a critical weakness.

Insights for Investors

The stocks of newly listed companies are essentially closer to "trust-based businesses" rather than "tool-based businesses." This requires investors to believe that the management will manage the treasury in a way that maximizes shareholder interests, rather than manipulating the TRX price for the benefit of insiders.

• For speculators or hedge funds: this listing provides a high-risk, high-reward speculative opportunity. The shell company's stock price skyrocketing over 500% in just a few days illustrates the enormous speculative enthusiasm in the market.

• For long-term value investors or institutional funds: The prospects of newly listed companies are fraught with challenges, resembling a high-risk bet. Their core "TRX treasury" strategy is filled with conflicts of interest, and their survival is highly dependent on unstable political alliances. Rational value investors, especially those seeking stable returns, are likely to steer clear.

Conclusion

TRON's promotion for listing is likely a well-planned strategy that achieves multiple goals. It not only imitates the model of a well-known company but also constitutes regulatory arbitrage taking advantage of a political window. However, its core is more likely a "financial performance" aimed at maximizing short-term profits.

In summary, the business of newly listed companies has packaged a successful "tool"—TRON blockchain—into a financial product that requires a high level 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 that the founder can become a qualified and trustworthy leader of a listed company. Judging from their past record in "trust-based businesses," this is undoubtedly a high-risk gamble.