Crypto.com plans to reissue 70 billion CRO tokens that were previously burnt in 2021, bringing the total supply back to its initial cap of 100 billion, despite strong opposition from the community.
A select group of validators close to Crypto.com heavily influenced the vote, resulting in the approval of the proposal.
The CRO market cap skyrocketed from $2.5 billion to $8.5 billion in a single vote, raising concerns about Cronos’ governance and centralization.
Controversial Decision Validated by Validator Vote
The Cronos blockchain, developed by Crypto.com, has approved a governance proposal to reissue 70 billion CRO tokens that were previously burnt in 2021. This decision brings the total supply of CRO back to its initial cap of 100 billion, a significant change for the ecosystem. However, behind this validation lurks massive influence from Crypto.com, raising questions about the centralization of the decision-making process.
The new tokens will be held in a strategic reserve wallet and released gradually over several years. Officially, this initiative is part of a broader strategy: Crypto.com plans to file for an exchange-traded fund (ETF) backed by CRO, aiming to attract institutional investors.
Biased Vote Influenced by Crypto.com?
Data from the Mintscan platform reveals strong opposition among independent validators to the proposal. However, a small group of validators closely linked to Crypto.com was enough to tip the scales in favor of the project.
The vote, which took place from March 2 to 16, initially showed close numbers, and the proposal struggled to reach the quorum of 33%. But a sudden surge in votes in the final hours pushed participation beyond 70%, ensuring the project’s validation. According to available data, validators like Electron, Antares, and Minotaur IV — known for their proximity to Crypto.com — played a key role in this turnaround.
CRO: Tripled Market Cap in a Single Vote
This massive token reissue has significant repercussions in the market. With a current market cap of $2.5 billion, the total value of CRO is expected to soar to $8.5 billion overnight. This radical change has sparked fierce criticism, notably from Andre Cronje, co-founder of Sonic, who quipped:
Tomorrow Cronos goes from $2.5bn mcap to $8.5bn mcap with a single vote and all it needed was a single voter.
The main argument of detractors revolves around the lack of true decentralization. A influx of 3.35 billion CRO was injected into the vote at the last minute, further strengthening the perception of manipulation orchestrated by Crypto.com.
Troubling Precedent for Blockchain Governance
In the end, the proposal was adopted with 62.1% in favor, 17.6% against, 20.1% abstention, and 0.11% veto. While proponents of the measure see it as a strategic step for Cronos’ development and institutional adoption, the method employed raises serious governance concerns.
This episode highlights a recurring issue in the crypto industry: the promise of decentralization can quickly be undermined when major players retain disproportionate power over key decisions.
