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Crypto.com’s recent decision to re-mint 70 billion CRO tokens has sparked outrage in the community, raising concerns over governance and trust.
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This controversial move reverses a prior commitment to reduce the circulating supply and aims to enhance the capabilities of the Cronos blockchain.
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“They [Crypto.com] pushed their votes almost at the last minute. And now they created a precedent that other projects could follow,” a community member lamented.
Crypto.com’s recent re-minting of 70 billion CRO tokens raises trust issues among holders, as the decision contradicts previous burn assurances.
Crypto.com Faces Backlash Over Voting Dynamics
The proposal’s passage was anything but certain during its voting period from March 2 to March 16, with preliminary results indicating insufficient support. Initially, while the “yes” votes led, the proposal did not reach the required quorum of 33.4% of eligible votes.
The dynamic shifted dramatically on March 16 at 14:00 UTC, when an unexpected influx of 3.35 billion CRO tokens altered the outcome. This sudden change secured the necessary quorum, elevating the “yes” votes considerably. Ultimately, the final tally showed that 62.18% were in favor, while 17.61% opposed and 20.11% abstained.
Crypto.com Proposal Voting Statistics. Source: Mintscan.io
Notably, only 11.86% of validators supported the “yes” votes initially, with just two validators (Starship and Falcon Heavy) backing the proposal. By the end of the vote, additional validators from Crypto.com, specifically Electron, Antares, and Minotaur IV, rallied in support, though their collective presence hardly alleviated concerns regarding decentralization.
Critics pointed out that Crypto.com maintains control of between 70-80% of total voting power across the network, effectively allowing the company to maintain sway over crucial governance decisions. This manipulation of the voting process ignited significant backlash from community members.
Community dissatisfaction was palpable, with accusations surfacing that Crypto.com exploited its validator dominance to influence the vote. One prominent voice in the discussion remarked:
“They [Crypto.com] pushed their votes almost at the last minute. And now they created a precedent that other projects could follow,” Unchained reported.
Future Implications for Crypto.com and Network Stability
With the proposal approved, Crypto.com is gearing up for substantial developments within the Cronos blockchain, re-minting 70 billion CRO tokens over five years. The implications of this newly minted supply are multifaceted, potentially including venture initiatives like a CRO ETF (exchange-traded fund).
It’s critical to note that the previously minted 70 billion CRO tokens, which were burned in 2021, will remain out of circulation. Still, the community is grappling with feelings of betrayal. Crypto.com had previously assured its users that the token burn would solidify an enduring reduction in circulating supply.
Adding to tensions, Crypto.com also introduced a proposal a day later to burn 50 million CRO tokens, an amount that merely represents 0.07% of the total freshly minted supply. This proposal has been met with widespread derision from CRO holders.
“It is a spit in all CRO holders’ faces. I mean, how dare you re-mint 70 billion tokens and on the same day start a proposal for burning 50 million tokens,” stated crypto journalist Laura Shin, quoting an outraged validator.
This sentiment underscores the apprehension felt among community members, who now believe their trust in Crypto.com has been severely compromised.
In light of escalating backlash and declining confidence, the ramifications of this decision could extend beyond short-term discontent, possibly affecting Crypto.com’s reputation and the broader Cronos ecosystem.
Cronos (CRO) Price Performance. Source: COINOTAG
Cronos’ CRO price has already felt the impact of these events, dropping nearly 5%. As of the latest data, CRO is trading at approximately $0.08, a reflection of shifting market sentiment.
Crypto.com has yet to provide a response to inquiries from COINOTAG regarding the situation.
Conclusion
The decision to re-mint CRO tokens has opened up a crucial dialogue about governance, trust, and transparency in crypto communities. With a fractured community and declining token value, the long-term ramifications for Crypto.com and its users could be significant.
