The crypto exchange Crypto.com has sparked controversy following a last-minute rush in voting that resulted in the approval of a contentious proposal to mint 70 billion CRO tokens. This drastic move was perceived as a breach of trust by many within the crypto community, particularly as it reverses a previous commitment made in 2021 to burn a similar number of tokens.
According to reports, the proposal seemed to be struggling to meet the required quorum of 33.4% until the final moments, when a surge of 3.35 billion Cronos (CRO) votes enabled it to pass by obtaining a total of 61.18% approval.
Crypto.com’s justification for this action was that reviving these tokens would help support the long-term growth of the Cronos ecosystem and provide funding for key initiatives, including the development of AI-driven applications and a potential CRO-based exchange-traded fund.
The minted CRO tokens will be placed in an escrow wallet and will be released over a five-year vesting period. The exchange has promised to implement strict controls on the reserve, including adjustments to the emission parameters of CRO to mitigate any inflationary effects on validator rewards.
Despite these claims, the reaction from the community has been overwhelmingly negative. Critics have argued that the decision undermines confidence in the governance model of Cronos, raising concerns over decentralization.
- Many independent validators opposed the plan, voicing concerns that it sets a dangerous precedent.
- The vote was largely swayed by Crypto.com’s internal validators, including key players like Starship and Falcon Heavy, which ultimately led to the proposal’s approval.
- A significant number of CRO holders expressed that the last-minute votes reflect a troubling pattern where projects with dominant validator control can manipulate decisions against community interests.
Following the approval, the blockchain is anticipated to undergo an upgrade to officially mint the new tokens. Frustration among CRO holders has reached a boiling point, with many feeling betrayed by the reversal of the original burning commitment. To add insult to injury, on the same day that the voting concluded, Crypto.com proposed to burn only 50 million CRO, a mere 0.07% of the newly minted tokens. This action further fueled criticism, with some referring to it as a ‘spit in the face’ of CRO holders.
As of now, the price of CRO has been in a downward spiral since the vote passed, witnessing a drop of over 3% to approximately $0.08. The sentiments surrounding the minting proposal have raised serious questions about the decision-making processes within the network and the trust stakeholders can place in it.
