Cronos, the blockchain platform linked with Crypto.com, has decided to reissue 70 billion $CRO tokens, sparking significant discussions within the crypto community.
The Voting Process: A Controversial Finish
The governance vote took place from March 2 to March 16. Participation remained low for most of the voting period, and the proposal looked set to fail. However, in the final hours, a surge in votes pushed participation to 70.57%. Reports indicate that most of these votes came from validators controlled by Crypto.com. This led to frustration among community members and accusations of manipulation, as many believe this sets a precedent for other projects.
Why Is Cronos Reissuing Burned Tokens?
In February 2021, Cronos executed one of the largest token burns, removing 70 billion $CRO to increase scarcity and value. However, Cronos now argues that restoring the original supply is essential for ecosystem growth and institutional adoption. Key reasons include expanding the Cronos ecosystem, supporting institutional liquidity, and integrating AI technologies into the blockchain.
How Will the Strategic Reserve Work?
The newly minted 70 billion $CRO will be placed in the Cronos Strategic Reserve and locked under a long-term vesting schedule. This includes a five-year initial lock-up, an additional five-year lock-up, and a linear monthly vesting schedule. This approach aims to prevent inflationary shocks and stabilize validator rewards.
Cronos's proposal to reissue new tokens has provoked sharp community reactions and speculations about potential impacts on $CRO's price. While an increased supply may raise dilution concerns, strategic allocation and long-term vesting could counteract inflationary pressures, and the launch of a CRO ETF could drive demand for the token.
