The native token of the Tron blockchain, TRX, reached a high of $2.50 on FTX after traders rushed to buy it hoping that it would be a way to get money out of the insolvent crypto exchange.
In a tweet on Wednesday, Tron founder Justin Sun said his team has been “working around the clock” to put together a solution for FTX to “initiate a path forward.”
At the time, it was unclear whether Sun’s proposed solution would be exclusively for Tron token holders on FTX or the exchange’s entire user base. In a follow up tweet later in the day, Sun announced that TRX trading had resumed on FTX and a withdrawal function was in the works.
Shortly after trading activity resumed, the price of TRX briefly surged 4000% from $0.06 to $2.50 on FTX. At the time of writing, TRX was still trading at a significant premium of $1 on FTX, 1,500% higher than its price on Binance and other crypto exchanges.
As of 4:30 am ET, user withdrawals had still not been enabled. Still, users who held a considerable amount of assets on FTX piled into TRX market buy-orders.
Whether or not TRX can indeed be a lifeline for FTX users depends on Justin Sun making good on his word to let them redeem TRX and related tokens on a 1:1 basis.
Market participants are skeptical, however, with orderbook analysis from Material Scientist suggesting it was far from possible to absorb $1 billion worth of sell pressure that would arise.
Meanwhile, some traders pointed to the irony of the situation surrounding the TRX premium on FTX.
“Alameda can literally buy tron outside of FTX and sell it on FTX right now at that massive 10x premium,” tweeted one crypto trader on Thursday.