The cryptocurrency exchange has faced backlash following a last-minute surge in voting that led to the approval of its contentious proposal to mint 70 billion CRO tokens.
As detailed in a recent report, the proposal struggled to achieve the necessary 33.4% quorum for most of the voting period. However, in the closing hours, a sudden influx of 3.35 billion votes for Cronos (CRO) pushed the proposal beyond the required threshold, garnering a 61.18% approval rate.
This proposal aimed to establish a Cronos Strategic Reserve by effectively reversing a 2021 token burn that had been intended to permanently remove the same number of tokens from circulation.
The exchange defended its decision by stating that reinstating these tokens would bolster the long-term development of the Cronos ecosystem and support initiatives such as AI-driven applications and a potential CRO-based exchange-traded fund.
The newly minted CRO tokens will be held in an escrow wallet and released according to a five-year vesting schedule. The reserve is expected to operate under strict regulations, including adjustments to CRO’s emission parameters to mitigate inflation’s impact on validator rewards.
Critics argue that reviving previously burned tokens damages trust and raises questions regarding the decentralization of Cronos.
A community member criticized the decision, alleging it evidenced Cronos’s centralized nature and suggesting that only the core team of the exchange would support such a measure.
Many independent validators opposed the proposal, yet validators associated with the exchange, such as Starship, Falcon Heavy, Electron, Antares, and Minotaur IV, ultimately played a crucial role in its approval.
Until March 10, only two of the company’s validators, Starship and Falcon Heavy, supported the proposal. By the end of the voting period, they were joined by three additional validators from Crypto.com—Electron, Antares, and Minotaur IV.
A few independent validators, including Cosmostation and Polkachu.com, also expressed support, but their votes had minimal influence compared to those from the exchange’s internal validators.
One significant holder of CRO expressed concern to the report, noting that the exchange’s last-minute voting activity could set a concerning precedent where projects with significant validator control could push through decisions against opposition.
With the approval of the proposal, the Cronos blockchain is set to undergo an upgrade that will officially mint the 70 billion tokens. Nonetheless, many CRO holders continue to feel disillusioned, viewing the decision as a breach of the original commitment to token burns.
Additionally, on the same day voting concluded, the exchange announced a proposal to burn 50 million CRO, amounting to just 0.07% of the newly minted supply. This move was met with further criticism, with one validator referring to it as a “spit in the face of all CRO holders.”
At the same time, CRO has been experiencing a decline, falling over 3% to $0.08 following the vote’s conclusion. The exchange was contacted for comment, but no response had been received at the time of publication.