Tron’s (TRX) Announcement About “Partnership” With Baidu Misled Investors

Tron's announcement about a partnership with Chinese search giant Baidu was not only a false statement but could have misled investors into believing true value had been created. The 'partnership' turned out to be simply Tron becoming a Baidu's cloud customer.

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Tron (TRX) wants to decentralize the internet, and the platform’s success may as well come from working with global brands through partnerships. Such partnerships usually signal a project’s real-world appeal and potential for widespread worldwide adoption.

But a recent tweet from Tron founder Justin Sun could have misled investors by appearing to suggest that his platform had struck a significant partnership with one of the world’s biggest companies, which in fact turned out to simply be a purchase of service agreement.

What happened

On October 12, Justin Sun tweeted that Tron had finally secured an “industry giant” as a partner. It got the TRX community excited, with several Twitter users speculating on the company’s identity.

However, on October 15 a Chinese-based cryptocurrency news outlet reported that what Tron claimed to be a partnership (revealed in the report to be Baidu, a Chinese internet giant) was not a ‘partnership’ per se.

According to CnLedger, several local outlets had published news articles that appeared to dispel suggestions that Tron had partnered Baidu, noting that the two companies had no “contact at the blockchain business level” and that “the ‘partnership’ between Baidu and Tron [was] basically about Tron buying cloud computing resources from Baidu.”

The news site then tweeted that the said ‘cooperation’ was all about involved Tron acquiring the services of tech giant Baidu. The services allow Tron to “build, operate and debug” blockchain-based products using the Beijing based company’s Cloud facility.

The platform added:

“The ‘partnership’ between Baidu and Tron is basically about Tron buying cloud computing resources from Baidu.”

According to CnLedger, the cooperation between the two entities primarily focuses on Tron purchasing and using Baidu’s cloud computing resources. As such, Tron’s access to the Cloud resources would help it to improve its compatibility and optimize its development experience.

Could it have been handled in a better way?

Tron’s development over 2018 has been mercurial, with Sun lauded for delivering on most goals- notably the mainnet launch and his acquisition of file-sharing giant BitTorrent.

However, some experts have said that his highly ‘tingly’ tweet about an unnamed partner could have been done in a better way.

From comments on the CnLedger report, Tron uses Baidu Cloud and is, therefore, a client of the internet conglomerate. In that case, it is inappropriate for the blockchain-based platform to claim that the relationship constitutes a formal partnership.

According to Ari Paul, an investor, and co-founder of BlockTower agrees that the relationship should not be misconstrued to mean it is a partnership, saying that it would be “misleading marketing” if it happens so.

He wrote:

“If I buy a computer with Microsoft Windows installed, I should not claim to have partnered with Microsoft without clarifying the limited nature of the ‘partnership.'”

For examples, Australia and the Commonwealth Scientific and Industrial Research Organization (CSIRO) cooperated to launch a project called “Red Belly Blockchain” on Amazon’s AWS, a cloud computing network.

The CSIRO, Australia, AWS Australia, and New Zealand all collaborated on piloting the Red Belly Blockchain project. In this instance, CCN says that the blockchain team at Red Belly “did not claim” to have partnered with AWS since it had only used its services.

Another comment came from Boxmining, a cryptocurrency analyst who suggested that Baidu already operates a blockchain network dubbed Xuperchain.  With this in place, the company may not be keen on relying on an external blockchain protocol.

Although Sun’s tweet captured the attention of the community, the expected “partnership” wasn’t announced formally. Lack of transparency can end up misleading investors who may deem an impending partnership as the best time to buy into a cryptocurrency.

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