Cronos, the EVM-compatible Layer 1 blockchain backed by Crypto.com, has proposed to reissue 70 billion previously burned CRO tokens. This move aims to restore the original 100 billion CRO supply and enhance ecosystem stability.
Why Is Cronos Reissuing Burned Tokens?
In February 2021, 70 billion CRO tokens were burned, significantly reducing supply. Cronos believes restoring the original supply is critical for long-term growth. Key reasons for this include ecosystem growth, attracting institutional liquidity, and an AI-driven blockchain vision.
How Will the Strategic Reserve Work?
Tokens will be placed in a wallet called the Cronos Strategic Reserve and locked for 10 years. The first five years will see tokens locked, followed by controlled monthly releases, preventing inflationary shocks.
Potential Benefits
Potential benefits include institutional adoption, ecosystem expansion, and long-term stability. The structured vesting period deters sudden token price hikes, enhances liquidity, and supports network resilience.
Cronos' proposal to restore CRO supply could significantly impact ecosystem stability and growth, aiming to boost liquidity and institutional participation while mitigating volatility risks.
