Cronos, the EVM-compatible Layer 1 blockchain backed by Crypto.com, has proposed to reissue 70 billion CRO tokens that were previously burned to establish a strategic reserve. The initiative aims to restore the total supply to 100 billion CRO and strengthen Cronos’ role in the crypto and AI sectors.
Why Is Cronos Reissuing Burned Tokens?
In February 2021, 70 billion CRO tokens were burned in one of the largest supply adjustments in crypto history. This significantly reduced the total supply, aiming to boost scarcity and token value. However, Cronos now believes that restoring the original supply is crucial for its long-term growth and strategic ambitions. Key reasons include ecosystem growth, the need for institutional liquidity, and expansion into the ETF market.
How Will the Strategic Reserve Work?
The 70 billion CRO tokens will be placed into a strategic reserve custody wallet with strict control mechanisms and a 10-year vesting period. The vesting structure includes an initial 5-year lock-up, an additional 5-year lock-up for the newly issued tokens, and a monthly vesting schedule through the Cosmos SDK. This prevents inflationary shocks while safeguarding CRO's value over time.
Potential Benefits
If Cronos succeeds in integrating CRO into ETFs and liquidity pools, demand for the token could rise. Increased liquidity supports expansion in DeFi, staking, and AI applications. A structured vesting period prevents sudden token dumps, reducing the risk of price volatility.
Reissuing the 70 billion CRO tokens can strengthen Cronos’ position in the long term, facilitating its integration into institutional markets and supporting ecosystem stability.
