Crypto.com's Controversial Proposal to Mint 700M CRO Tokens to Undo a 2021 Burn Succeeds

On Sunday it looked like Crypto.com's controversial proposal to mint 70 billion CRO to undo a 2021 burn of the same number of tokens, meant to forever remove them from circulation, might fail.

Crypto.com's controversial proposal to mint 70 billion CRO to undo a 2021 burn of the same number of tokens, which are meant to be permanently removed from circulation, has passed. For the majority of the proposal's voting period, which spanned March 2-16, the yes votes barely outpaced the nos. However, the project failed to reach the 33.4% quorum of eligible votes for the proposal to go into effect.

This changed at 14:00 UTC on Sunday when 3.35 billion CRO tokens were added to the pro category, achieving quorum and pushing the vote well over the top. The final tally: 61.18% yes, 17.61% no, 20.11% abstain, and 0.11% veto. Turnout ended up being 70.18%, more than double the necessary 33.4%.

A late surge of votes pushed the proposal over the top.

This sudden surge was the last insult to injury in the minds of aggrieved CRO holders who feel that trust has been broken between themselves and Crypto.com. "A lot of disappointment," said one large token holder about the final result on Telegram. "They [Crypto.com] pushed their votes almost at the last minute. And now they created a precedent that other projects could follow."

The votes in question came from large validators operated by Crypto.com, which controls between 70-80% of the total voting power according to three separate sources. As of March 10, only two of their validators, Starship and Falcon Heavy, had voted in favor of the proposal. It did not matter that only 11.86% of the validators said yes to the proposal, as opposed to 77.97% who said no and another 8.47% abstained.

Representatives for Crypto.com did not respond to a request for comment.

Vote count as of March 10.

However, by the time the voting closed, they had been joined by three other Crypto.com controlled validators: Electron, Antares, and Minotaur IV, according to two separate sources. Two smaller independent validators, Cosmostation and Polkachu.com, also supported the proposal, but their votes were immaterial to the final numbers.

Final voting tally.

With the vote passed, the stage is now clear for the Cronos blockchain to undergo an upgrade tomorrow that will mint 70 billion new tokens, while leaving the 70 billion burned in 2021 out of circulation. The forthcoming tokens, which will vest on a five-year schedule, will be used for a variety of functions, including the seeding of a potential CRO ETF.

But that is not all that the Crypto.com team has been up to. Today, one day after the vote ended, the team issued another proposal, to burn 50 million CRO (or 0.07% of the newly minted tokens) as a continuation of three prior burns of the same amount. "It is a spit in all CRO holders’ faces," wrote one CRO validator who voted against the re-minting proposal on Telegram. "I mean, how dare you to re-mint 70B token [sic] and on the same day starting [sic] a proposal for burning 50M tokens."

Voting on this new proposal will run through the next two weeks.