Cronos, the Layer 1 blockchain linked to Crypto.com, has approved a proposal to reissue 70 billion $CRO tokens, reversing a large burn from 2021. This decision has sparked controversy within the crypto community.
The Voting Process: A Controversial Finish
The governance vote took place from March 2 to March 16 and was highly contested. The vote needed at least 33.4% quorum to pass, but participation remained low until the final hours. On March 17 at 14:00 UTC, a sudden 3.35 billion CRO votes in favor were cast, pushing participation to 70.57%—more than double the required quorum. Final results: Yes - 61.18%, No - 17.61%, Abstain - 20.11%, Veto - 0.11%. The bulk of the last-minute votes came from large validators controlled by Crypto.com. Many community members voiced frustration, arguing that the vote was manipulated.
Why Is Cronos Reissuing Burned Tokens?
In February 2021, Cronos executed one of the largest token burns in crypto history, removing 70 billion CRO from circulation. However, Cronos now argues that restoring the original supply is necessary for long-term ecosystem growth and institutional adoption. Key reasons include expanding the Cronos ecosystem, institutional liquidity for ETFs, and building an AI-powered blockchain.
How Will the Strategic Reserve Work?
The newly minted 70 billion CRO tokens will be placed in a custody wallet called the Cronos Strategic Reserve. These tokens will be locked under a long-term vesting schedule to prevent immediate market dilution. Key details of the vesting plan include a 5-year initial lock-up, an additional 5-year lock-up, a monthly vesting schedule, and controlled emission.
With the proposal now approved, Cronos will execute a network upgrade to mint the 70 billion new tokens. The burning of the original tokens from 2021 remains permanent, meaning the total supply will now return to 100 billion CRO. The impact on $CRO's price remains uncertain, but strategic allocation and long-term vesting could offset inflationary pressure.
