Cronos, the Layer 1 blockchain linked to Crypto.com, has approved the issuance of 70 billion $CRO tokens, returning the total supply to 100 billion. The decision has sparked debate in the crypto community. Let's delve into the details, reasons, and implications of this move.
The Voting Process: A Controversial Finish
The governance vote took place from March 2 to March 16 and was highly contested. It required at least 33.4% quorum to pass, but participation remained low until the very end. On March 17 at 14:00 UTC, a sudden 3.35 billion CRO votes were cast, pushing participation to 70.57%, more than double the required quorum. Reports indicate that the bulk of last-minute votes came from Crypto.com-controlled validators. Many community members voiced frustration, arguing that the vote was manipulated.
Why Is Cronos Reissuing Burned Tokens?
In February 2021, Cronos executed a large burn to increase $CRO scarcity and value. Now, the reissuance is viewed as necessary for ecosystem growth and institutional adoption. Key reasons include expanding the Cronos ecosystem, creating institutional liquidity for CRO ETFs, and supporting AI-driven blockchain applications.
How Will the Strategic Reserve Work?
The newly minted 70 billion CRO will be placed in a Cronos Strategic Reserve wallet, locked long-term to prevent market shocks. The plan includes a 5-year initial lock-up, an additional 5-year vesting period, and a monthly release schedule via the Cosmos SDK.
With the proposal approved, Cronos plans to upgrade the network to mint the new 70 billion tokens. The impact on $CRO’s price remains uncertain, but strategic allocation and long-term vesting could mitigate inflationary pressure.
