Cronos has officially approved a proposal to reissue 70 billion $CRO tokens, sparking widespread debate in the crypto community. This decision effectively reverses a major token burn from 2021, bringing the total supply of $CRO back to its original cap of 100 billion.
The Voting Process: How It Unfolded
The vote took place from March 2 to March 16 and was highly contested. Initially, the proposal barely had enough support, but a late surge of votes from Crypto.com-controlled validators secured the required 70.57% participation. Many community members have expressed concerns about potential manipulation.
Reasons Behind the Token Reissue
In 2021, Cronos executed one of the largest token burns, removing 70 billion $CRO from circulation. However, Cronos now argues that restoring the original supply is crucial for long-term ecosystem growth. Key reasons include expanding the Cronos ecosystem, facilitating institutional market integration, and developing AI-powered blockchain applications.
How the Strategic Reserve Will Operate
The newly minted 70 billion $CRO will be placed in a strategic reserve and distributed over several years. Tokens will unlock linearly on a monthly basis according to a vesting schedule to prevent inflationary shocks.
With the proposal approved, Cronos aims to enhance its market position and foster long-term ecosystem development. Despite concerns over increased token supply, strategic allocation may counteract potential inflationary pressures.
