On October 25th, the Chinese entrepreneur behind the cryptocurrency Tron, Justin Sun, made an announcement on Twitter:

#TRON will partner with a hundred billion USD megacorporation next week. It will not only benefit $TRX but all TRC10&20 tokens including $BTT & $WIN etc. It will broadly distribute #TRON Dapps and tokens to billions of customers. TBA. Make a guess? — Justin Sun (@justinsuntron) October 25, 2019

The “announcement of an announcement” is a trademark ploy by Sun, who is known as an unrelenting hype machine who has propelled Tron to be one of the top 10 cryptocurrencies at over a billion-dollar market cap. The pseudo announcement was followed by a flurry of tweets from Sun, from announcing Opera’s browser wallet was accepting Tron to a claim that Tron would rise up to sit in the top four cryptocurrencies by market cap by the end of the year.



The market didn’t disappoint. In the days following Sun’s announcement of big news—the market cap of Tron rose from around $1.1 billion to a height of $1.5 billion on October 29th, the day of the announcement—a 36% increase. Sun’s announcement turned out to be an integration between Samsung Keystore and Tron—but the announcement itself seemed to matter less than the hype and price movements around it.



Not all of this can be attributed to Sun, of course—an endorsement of blockhain technology from Chinese president Xi Jinping following Sun’s announcement caused an overall swell in price in the crypto market. Justin Sun has an unlikely history of being there at the right place at the right time, however, and his style of showmanship has propelled Tron to become a household name. The Samsung episode is rife with intrigue typical of Sun, including a rumor that he paid $10 million to Samsung for the integration.



This episode is the latest in a long line of marketing stunts that we’ve come to expect from Sun. The only thing surprising about it is that it follows his public apology for his “excessive marketing and overhyping behavior” to “the public, the media, and the leaders and regulators who care about me” after winning a $4.57 million charity lunch with Warren Buffett earlier this year.



These bizarre series of stunts have elevated Sun’s actions to a form of performance art—they appear so absurd and even comedic that it becomes easy to forget they’ve bilked retail investors into putting money into a cryptocurrency that likely has no intrinsic value.



A lot has been said about Tron. Critics of the cryptocurrency argue that it has little technical merit or substance—and is ill-equipped to scale anywhere close to the vision proposed by Justin Sun and the Tron Foundation. Rather than digging into the technology behind Tron—or lack thereof—in this article, we’re going to dig into the marketing strategy and machine that have allowed Justin Sun to pump Tron to a billion-dollar-plus market cap.



The Sun Strategy

Cryptocurrency is no stranger to dubious projects raising seemingly absurd amounts of money from retail investors. In January 2017, the estimated market cap of all cryptocurrencies was around $15 billion. In January 2018, it would peak at around $785 billion. Yet even in this context, Tron stands out from the pack.



Let’s take a look at Tron’s early beginnings. In August 2017, a Forbes article was published with the title “Could This Millennial ‘Crypto’ Tech Visionary Be The Next Jack Ma?,” which quotes Sun as saying, “I believe TRON will bring some major changes to today’s online entertainment industry and will endow the entire digital entertainment industry with a sense of globalization.”



As Global Coin Research points out, Sun is a master at leveraging information asymmetry to create buzz and hype, and this has allowed him to pump Tron to a market cap of over $1 billion. At times, this can mean outright deception, while other times, he was simply taking advantage of a lack of knowledge around technical fundamentals or the gap between China and the West.





A photo of Justin Sun receiving a graduate certificate for Hupan University from Jack Ma. The photo has been widely recirculated across Tron’s marketing content.

In the early days of building Tron, Sun was keen to associate himself with Jack Ma, posting photos of himself with the Alibaba founder across social media platforms. Sun’s biography still reads “1st Millennial Grad Hupan Uni by Jack Ma @alibabagroup.” He also hyped up his year-long employment at Ripple Labs. Latching onto an association with more reputable, trusted names is one of the cornerstones of Sun’s marketing strategy.



A December 2017 article published in The Journal Blog speculated that it was exactly these factors—an association with Jack Ma and potential partnerships with companies like Alibaba and Kuadi that would lead Tron to “be one of the top 5 cryptocurrencies next year.”



The prediction was off by three places in a matter of two months. Tron had raised a $58 million ICO in September 2017, which itself wasn’t as kingly a sum as other hyped ICOs like Filecoin or Augur. By February 2018, the project, which had a plagiarized whitepaper, an ERC-20 token, and no real project, had reached an all-time-high market cap of $16.7 billion within mere months, becoming the #8 cryptocurrency by market cap.



The blog article perhaps serves as a bellwether for the general sentiment around Tron and cryptocurrency at the time. It didn’t talk about Tron’s technology at all—what mattered far more were the associations that Tron had to higher powers like Jack Ma and the appearance of respectability. That suited the speculative nature of the market during the 2017 and 2018 boom just fine. Many retail investors were even openly appreciative of how diligent Sun was in pumping the price of Tron.



In an interview, BitTorrent’s former Chief Strategy Officer Simon Morris, who worked with Justin Sun following Tron’s acquisition of BitTorrent, said:



It’s very clear that Justin is very strong at marketing. He has a very nice personality from a marketing point of view. He doesn’t have a technical bone in his body. He wouldn’t understand, technically, anything. But the approach that bothered me was, the very sort of Trumpian approach—if you get caught in a lie, the answer is you double down on the lie. [It was] the endless doubling down on lies that made me think it wasn’t going to be a fit.

With announcement after announcement and stunt after stunt, Sun fed perfectly into a speculative and fast-moving news cycle that valued hype over substance.

In the rest of this article, we’ll break down the core strategies Justin Sun has employed to pump Tron to a massive market capitalization.

Announcements and Partnerships

Announcing partnerships (and announcing their announcement) is the marketing strategy that Justin’s hype machine is famous for. It proved particularly effective in the early days of Tron, to build up hype, speculation, and, ultimately, price before the project even had a working product.

It began in late 2017 and early 2018, months before the launch of Tron on the main net. There really wasn’t much that could be said about Tron’s technical vision or what they were building, so Sun shifted the dialogue to external partnerships in a kind of marketing jujitsu, using these as a form of validation for a technology that didn’t yet exist.

The following represents a fairly textbook example of how this would unfold:

More partnerships are coming! Even #NASDAQ listed companies and the giant companies with more than 100 million users started to contact us for partnership. We will be huge soon! #TRON #TRX $TRX — Justin Sun (@justinsuntron) January 2, 2018

January 2, 2018: Sun announces that partnerships with Nasdaq-listed companies are on the way soon. Within less than 24 hours, the price of Tron increases 145% from around $4B to $6B.

We will announce our partnership with a very prestigious public listed company next week. Looking forward to it! — Justin Sun (@justinsuntron) January 4, 2018

January 4, 2018: Sun follows up with an announcement to come the following week about a partnership Tron has with a major publicly listed company. Within less than 24 hours, the market cap of Tron has increased over 200%, from roughly $9 to $19 billion.

We #TRON are proud to announce the partnership with Baofeng group. Baofeng, aka Chinese @netflix, boasts more than 200 million users as a video portal giant and has achieved 8 billion CNY listing in Shenzhen stock exchange (300431.SZ). https://t.co/f9MJZcmSDD #TRX $trx pic.twitter.com/jZJF32mmvi — Justin Sun (@justinsuntron) January 10, 2018

January 9, 2018: A week later, Justin Sun announces that Tron is partnering with Baofeng, which he refers to as “Chinese netflix.” Baofeng is, in reality, a simple media player, not a streaming platform or service. By the time of the announcement, the price of Tron had already fallen from a peak of $19 billion the week before back down to $7 billion.

Cryptocurrency traders are fond of the saying, “buy the rumor, sell the news.” Tron is perhaps the best example of this in practice.



Vanity Metrics and the Ethereum and EOS Developer “Rescue”

In late 2017, a popular method for valuing cryptocurrency assets emerged called the “Network Value to Transactions Ratio” or NVT. It essentially proposed to create an equivalent of the price-to-earnings ratio method for valuing companies for cryptocurrency by dividing the value of the network by the value of the daily transactions on the network. The idea was simply that with a higher ratio of transaction value to market cap, a cryptocurrency was likely building a stronger network and was thus more valuable.



According to the NVT, Tron has been significantly undervalued compared to Bitcoin and Ethereum since launch. While a higher volume of transactions theoretically suggests a higher value for a network, the number of bots and spoofed transactions make it an inaccurate measure of value. Unsurprisingly Justin Sun has latched onto Tron’s transaction volume as an indicator of value to the network.



Measured along the NVT metric, Tron has been catching up larger chains such as Ethereum.

Tron has purported from the beginning to be an “Ethereum killer,” and honing in on Tron’s transaction volume has allowed Sun to propel this narrative forward.



In November 2018, Tron had purportedly launched a $100 million fund to invest in gaming projects built on the Tron ecosystem. In December 2018, Sun announced that he was creating a fund to help Ethereum and EOS developers migrate their applications over to Tron. In the meantime, Sun took every opportunity to crow about the growing number of transactions on the Tron network.



While it’s impossible to say whether this helped boost the price, it certainly didn’t hurt. From November 2018 to mid-January 2018—during the middle of crypto winter, the price of Tron nearly increased 183%.

One study of transaction volume on Tron identified tens of thousands of fake bots, one of which showed that a single bot placed 75,000+ transactions over a period of 18 days. Unlike Ethereum, which charges high transaction fees, or EOS, which requires staked EOS for transactions, Tron provides 5,000 free “bandwidth” points per day for transactions, which may incentivize automated or spam-like transactions.

In cryptocurrency, transaction volume is something of a vanity metric in that it’s easily faked and spoofed and doesn’t mean much on its own without context. That’s perhaps what makes it perfect for Tron.

BitTorrent Acquisition

In Silicon Valley and among technology startups, a popular phrase around building a company goes, “Nail it then scale it.” Tron’s acquisition of BitTorrent in June 2018 and subsequent IEO for a BitTorrent Token earlier this year could be said to be Justin Sun’s take on this model. Build a cryptocurrency, market it to an unseemly valuation, use some of the proceeds to acquire or create a new cryptocurrency—rinse and repeat!



Tron has heralded BTT as a token that will create “blockchain mass adoption”:

Want to know more about BitTorrent $BTT, the token that will enable #blockchain mass adoption? Read our whitepaper 😉https://t.co/vF74O2VSmX pic.twitter.com/BOdoAP0MLJ — Justin Sun (@justinsuntron) January 7, 2019

The goal, as described by the whitepaper, is to create a token on top of the BitTorrent peer-to-peer filesharing protocol that would “create a token-based economy for networking, bandwidth, and storage usage.”

The big problem is that it doesn’t seem likely to work. As a BitTorrent executive said, “It was very clear when I was [at BitTorrent] that there was no way the transaction capacity of Tron would [work]….The transactional capacity we [were] looking at was needing hundreds of transactions a second just to get started. It’s simply not there. You hear all the bullshit out there, oh, this does 10,000 transactions a second. It’s all crap. We were going to melt Tron. Literally destroy it.”

As has typically been the case with Justin Sun and Tron over the years, these pragmatic facts are malleable for the sake of marketing—and money. The price of Tron rose 17% following the announcement of the acquisition. BitTorrent conducted an initial exchange offering on Binance in January this year, selling out of $7M in BTT tokens within minutes. By May 2019, BitTorrent Token’s market cap reached a peak of around $375 million—well above what Tron had paid for BitTorrent.

Lunch with Warren Buffett

The price of Tron in the months following Sun’s announcement of winning a charity lunch with Warren Buffett.

Earlier this year, Sun may have pulled his boldest—and what would turn out to be the most convoluted— marketing stunt around Tron to date. In May, Sun tweeted to his followers:



Something huge and amazing going about #TRON and #BitTorrent. I will share with you after June 1. I think I have 70% to win and nail it. Fingers crossed! $TRX $BTT — Justin Sun (@justinsuntron) May 26, 2019

Following the announcement of an announcement, the market cap of Tron rapidly rose from $1.9 billion to a $2.6 billion market cap just a day before Sun made his announcement on June 3rd. Characteristically, the announcement didn’t have much to do with technological developments around Tron but instead was that Sun and the Tron Foundation had won the annual auction for a lunch with Warren Buffett for $4.567 million—another example of Sun building his brand by creating an association with older, more established figures in the world.



The announcement cast an instant spotlight on Sun and Tron across the media:

It also provided Sun with a lot of ammo to continue promoting Tron in the months to come:

I officially announce I’ve won the record-setting 20th-anniversary charity lunch hosted by @WarrenBuffett. I’ll also invite #blockchain industry leaders to meet with a titan of investment. I hope this benefits everyone. #TRON #TRX #BTT #BitTorrent pic.twitter.com/EMZ4TMhgpR — Justin Sun (@justinsuntron) June 3, 2019

Mr. President, you are misled by fake news. #Bitcoin & #Blockchain happens to be the best chance for US! I'd love to invite you to have lunch with crypto leaders along with @WarrenBuffett on July 25. I guarantee you after this lunch, nobody will know crypto more than you! — Justin Sun (@justinsuntron) July 12, 2019

As of now we’ve only invited @SatoshiLite of Litecoin, @Binance and @HuobiGlobal to the @WarrenBuffett lunch. Please report any suspicious parties that claim to be invited to avoid any financial loss. — Justin Sun (@justinsuntron) July 5, 2019

7 days left till the @WarrenBuffett lunch! What questions would you like me to ask? Write them below & ones w/ most likes will be considered! 🚀 — Justin Sun (@justinsuntron) July 18, 2019

So far, pretty typical of what we’d expect from Sun. But what followed was a bizarre series of events that bordered on the surreal. The lunch with Buffett was scheduled for July 25th, but as the date approached, Sun claimed that he had to reschedule due to kidney stones.



An article from Caixin, a Chinese newspaper with backing from the Chinese Communist Party, published a contradictory narrative on July 23rd, claiming that Sun was under investigation and couldn’t leave China. That same day, Sun held a live Periscope broadcast on Twitter that showed him in San Francisco. He also published a post on Chinese social networking site Weibo stating that Caixin’s reports were completely untrue.



By the next day, Sun performed a startling about-turn. He published a public apology in Chinese on Weibo for overhyping and marketing Tron—promising instead to focus on its technology and research and development. He also expressed his respect for Wang Xiaochuan, Caixin’s founder.



A Photoshopped image from a satirical news article from the website Coin Jazeera. The original image contained a handwritten Tron transaction ID and date—presumably to show that he hadn’t been detained by the Chinese government.



In the aftermath, it’s hard to tell exactly what happened. Rumors abound—one source even claims that the Chinese government detained Tron employees to put pressure on Sun to cancel the lunch with Buffett. As with many things Sun-related, it’s difficult to separate fact from fiction.



One thing is clear—while the announcement of the lunch with Warren Buffett may have driven a rally in Tron’s price over the short-term, the ensuing events did the opposite. Tron’s market cap has fallen from a high of $2.6 billion in June ahead of the announcement to a low of $1 billion in September. For Tron, it seems like business as usual.

