Crypto.com Witnesses Absurd Governance Farce, Holder of 70% of Voting Power Forces 700 Billion CRO Inflation

Original Article Title: "Crypto.com Drama Unfolds as 70% Voting Power Enforces 700 Billion CRO Mint"

Original Article Authors: Symbol; Boxmining

Editor's Note: Several weeks ago, Crypto.com put forth a proposal to reissue 700 billion burnt CRO tokens. Throughout the 2-week voting period, the voter turnout failed to meet the required threshold. If sufficient participation was not reached by the deadline, the proposal would be null and void. However, on the day before the cutoff, a sudden influx of 33 billion CRO token holders joined the vote, ultimately overwhelmingly approving the proposal. This last-minute voter was none other than Crypto.com itself.

On Sunday, what seemed like a potentially failed proposal—aimed at minting 700 billion CRO to compensate for the token burn in 2021 and reintroduce it to the market—struggled with a slim lead in favor of the "yes" votes over "no" votes for most of the voting period (March 2-16) and did not reach the required quorum of 33.4% to be effective.

However, at 14:00 UTC on Sunday, a dramatic turn of events occurred when suddenly 33.5 billion CRO tokens were counted as "yes" votes, meeting the required threshold for the proposal to pass and vastly exceeding the minimum standard. The statistics show: 61.18% in favor, 17.61% against, 20.11% abstain, and 0.11% reject; with an overall turnout of 70.18%, far exceeding the required 33.4% quorum.

The last-minute surge in votes ultimately led to the proposal's approval. Source: Mintscan

The sudden surge in votes has left many disgruntled CRO holders feeling even more aggrieved, believing that trust between Crypto.com and its holders has been severely damaged. "Very disappointed," commented a CRO whale on Telegram. "They almost all voted at the last minute, setting a malicious and emulatable precedent for other projects."

The crux of the controversy lies in the fact that most of the votes came from large validators operated by Crypto.com. Three independent sources indicate that these validators control between 70% to 80% of the total voting power. As of March 10, only two of its validators—Starship and Falcon Heavy—voted in favor. Despite the "yes" votes accounting for only 11.86%, far below the 77.97% "no" votes and 8.47% abstentions, the peculiar situation did not prevent the proposal from being approved.

A representative for Crypto.com declined to comment on the matter.

As of the March 10 voting tally, data source: Mintscan

As the vote neared its conclusion, three additional validators controlled by Crypto.com—Electron, Antares, and Minotaur IV—also joined the approval camp; furthermore, two smaller independent validators, Cosmostation and Polkachu.com, indicated their support, although their votes had minimal impact on the final outcome.

Final voting results, data source: Mintscan

With the proposal's approval, the Cronos blockchain will undergo an upgrade tomorrow, during which 700 billion new tokens will be minted, while the 700 billion tokens burned in 2021 will remain out of circulation. These new tokens will be gradually released according to a five-year vesting schedule and will support various functions, including the potential launch of a CRO ETF.

However, the actions of the Crypto.com team did not stop there. Just a day after the voting ended, the team introduced another proposal to burn 50 million CRO tokens (equivalent to 0.07% of the newly minted tokens) to supplement the three previous burn events of the same amount. A CRO validator who voted against the re-minting proposal on Telegram angrily wrote, "This is an insult to all CRO holders. How dare you propose to burn 50 million tokens on the same day when you're re-minting 700 billion tokens?"

The vote on this new proposal will continue for the next two weeks.

This article is contributed content and does not represent the views of BlockBeats.