Cronos, the EVM-compatible Layer 1 blockchain backed by Crypto.com, has proposed to reissue 70 billion previously burned CRO. This move aims to enhance Cronos' role in the crypto and AI space while maintaining long-term ecosystem stability.
Why Is Cronos Reissuing Burned Tokens?
In February 2021, 70 billion CRO tokens were burned, marking one of the largest burns in crypto history. This significantly reduced the total supply, aiming to increase token scarcity and value. However, Cronos now views restoring the original supply as crucial for long-term growth and strategic ambitions. The reasons include ecosystem growth with over 165 million transactions, integrating CRO into institutional markets, and transitioning to an AI-powered blockchain.
How Will the Strategic Reserve Work?
The 70 billion CRO tokens will be placed in a Cronos Strategic Reserve custody wallet with strict control mechanisms and a 10-year vesting period. Key details include an additional five-year lock-up and a linear monthly vesting schedule to prevent inflationary shocks. The emission rate will be adjusted to keep validator rewards stable.
Potential Benefits for Cronos
Potential benefits include institutional adoption, ecosystem expansion through increased liquidity, and long-term stability thanks to a structured vesting period. While the original token burn reduced supply and increased CRO rarity, reversing this move could impact long-term value appreciation.
Restoring the total supply to 100 billion CRO presents opportunities for institutional adoption and supports Cronos' long-term sustainability. This move could play a significant role in advancing crypto blockchain and AI initiatives.
