Cronos, the blockchain linked to Crypto.com, has approved a proposal to reissue 70 billion $CRO tokens, causing controversy in the crypto community. This decision reverses a major 2021 token burn, returning the total CRO supply to its original cap of 100 billion.
The Voting Process: A Controversial Finish
The governance vote, held from March 2 to March 16, was contentious. For much of the period, the proposal had just enough support but faced potential failure. At the last minute, **3.35 billion CRO votes** swung in favor, exceeding the quorum by more than twice (70.57%). The bulk of late votes came from Crypto.com-controlled validators. Many community members expressed frustration, calling the vote manipulated.
Why Is Cronos Reissuing Burned Tokens?
Cronos argues that restoring the original supply is vital for long-term ecosystem growth and institutional adoption. Key reasons include:
1. **Expanding the Cronos Ecosystem**: An increased supply will support future expansion, crucial as the network has already processed over **165 million transactions**. 2. **Institutional Liquidity for ETFs**: Deep liquidity is needed for integrating CRO into institutional markets. 3. **Building an AI-Powered Blockchain**: Ensuring a steady token supply aids the development of AI applications.
How Will the Strategic Reserve Work?
The new tokens will be placed in the Cronos Strategic Reserve wallet and locked under a long-term vesting schedule:
1. The initial 5-year lock-up has passed. 2. New tokens undergo a further 5-year lock-up. 3. Tokens will be released linearly on a monthly basis. 4. Controlled emission ensures that validator rewards remain stable.
With the proposal approved, Cronos will execute a network upgrade to mint the 70 billion new tokens. The original 2021 burn remains permanent, raising the total supply to 100 billion CRO. The impact on CRO's price is uncertain. Long-term, a successful ETF launch may boost demand.
