A contentious proposal in the Cronos ecosystem drew to a close late Monday, with the community voting in favor of increasing the token supply from 30 billion CRO to 100 billion CRO over a 10-year vesting period.
This significant change occurred after weeks of the community initially opposing the decision, with several influential CRO whales stepping in at the last moment to sway the vote in favor of the proposal.
Cronos, which is closely associated with the crypto exchange Crypto.com, had proposed to reissue 70 billion CRO tokens that were burned in 2021 as part of a strategy to restore its original 100 billion token supply, thus establishing what it called a “Strategic Reserve.” This ambitious plan, valued at approximately $5 billion at the current price of $0.08 per CRO, aimed to enhance the U.S. position in the crypto market, fund ecosystem growth, and launch a CRO ETF.
Despite the potential benefits outlined, the initial community reaction was largely negative, with an astonishing 86% opposing the proposal shortly after voting commenced.
The nature of crypto governance often leads to scenarios where the actual decision-making power lies disproportionately in the hands of large token holders, undermining the principles of community governance. Although the system is designed to allow for community voting, the reality can often favor the few at the cost of the many.
Initially, during the voting period from March 2 to 16, the proposal struggled to reach the 33.4% quorum required for approval. However, at 14:00 UTC on Monday, a sudden influx of 3.35 billion CRO votes turned the tide, ultimately validating the proposal with a final count of 61.18% in favor, 17.61% against, 20.11% abstaining, and 0.11% veto.
Two influential validators, Starship and Falcon Heavy, had backed the proposal as of March 10, although the majority of the community (77.97%) remained opposed, with 8.47% abstaining. In a last-minute surge, validators Electron, Antares, and Minotaur IV joined the fray, contributing a combined voting power of 3.2 billion CRO in favor of the expansion.
The Cronos network had an upgrade lined up in the hours following the vote, which was successfully completed by March 18 at 03:00 UTC. This upgrade coincided with the decision, setting the stage for a more than 200% increase in token supply over the forthcoming years.
In response to the vote outcome, traders reacted swiftly, resulting in a drop of 8.5% in CRO value within 24 hours, amidst a broader flat market. This serves as a reminder of the volatility and unpredictability inherent in the cryptocurrency space, especially in the wake of significant governance decisions.
