The Controversy Surrounding Cronos’ Proposal to Restore Burned Tokens
Cronos, the Layer 1 blockchain associated with Crypto.com, is currently facing backlash over a contentious proposal to reinstate 70 billion CRO tokens that were burned in 2021. Early voting results on Mintscan reveal that 87% of participants have opposed the plan.
The Strategic Reserve Proposal
The proposal suggests that by restoring the burned tokens, a Cronos Strategic Reserve will be established. Crypto.com’s CEO, Kris Marszalek, stated that this move aims to allocate a $5 billion stockpile to position America as the global capital of crypto.
Cronos developers assert that this initiative is in line with the platform’s long-term vision and growth strategy. If approved, the total supply of CRO would revert to 100 billion, with the tokens being held in an escrow wallet.
The reserve would be subject to stringent control measures, including a new five-year lockup period. This would extend the vesting timeline to 10 years, incorporating a linear vesting mechanism that distributes monthly tokens via the Cosmos SDK on the Cronos POS Chain.
Furthermore, adjustments to CRO emission parameters would ensure that validator rewards remain unaffected despite the increase in circulating supply. The voting process is set to take place between March 3 and March 17, 2025, with implementation expected shortly after.
Moreover, Cronos’ strategy to establish itself as the premier blockchain for AI-driven applications includes plans to secure a spot exchange-traded fund (ETF) listing and launch a stablecoin in Q3 2025. An ETF application submission is also on the agenda for Q4.
Community Backlash
Despite Cronos’ strategic objectives, the proposal has sparked controversy within the community. Mintscan data indicates that over 500 million CRO tokens have been used in the vote, with 87% opposing the restoration of the burned tokens.
Social media platforms have been abuzz with dissenting voices, with one CRO advocate, Wyll Bilderberg, expressing strong opposition to the proposal. He believes that bringing back burned tokens goes against the principle of token burns and raises concerns about centralization on the Cronos platform.
However, the unexpected impact of the proposal is evident in CRO’s market performance. According to CryptoSlate data, the token saw a 15% surge during the reporting period, reaching $0.08434 at the time of writing.
