Cronos, the Layer 1 blockchain linked to Crypto.com, has officially approved a proposal to reissue 70 billion $CRO tokens, sparking 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. For most of the voting period, the proposal barely had enough support. However, in the final hours, a sudden influx of 3.35 billion votes in favor increased participation to 70.57%, securing the proposal's success. Most of these last-minute votes came from Crypto.com-controlled validators.
Why Is Cronos Reissuing Burned Tokens?
Cronos argues that restoring the original token supply is necessary for long-term ecosystem growth and institutional adoption. Key reasons include expanding the Cronos ecosystem, ensuring institutional liquidity for potential ETFs, and building AI-integrated blockchain applications.
How Will the Strategic Reserve Work?
The newly minted 70 billion tokens will be placed in the Cronos Strategic Reserve, locked under a long-term vesting schedule to prevent immediate market dilution. Tokens will be released gradually on a monthly schedule via Cosmos SDK.
The impact on $CRO's price remains uncertain. Despite concerns about potential dilution, strategic allocation may offset inflationary risks.
