What we know so far about the CRO un-burn announcement (beginner friendly read)
A detailed look into the CRO un-burn situation (as of 3rd Mar). Sources included.
Do note that more details may come to light after 3rd Mar and render this analysis invalid.
Key Points
- The CRO chain’s new proposal could boost growth but may dilute token value due to increased supply.
- It seems likely that CRO might be considered for the US crypto reserve, given its ecosystem focus, though it’s not currently listed.
- Research suggests a CRO ETF has a fair chance of approval in 2025, following recent crypto ETF trends.
Proposal Analysis
The CRO chain’s new proposal involves allocating 70 billion CRO tokens to a strategic reserve, increasing the total supply from 30 billion to 100 billion over 5 years. This could fund growth in decentralized networks and AI, potentially supporting a CRO ETF. However, this significant supply increase may lead to high inflation, initially around 46.67% annually, which could dilute existing token holders’ value if demand doesn’t rise accordingly.
US Crypto Reserve Inclusion
The US is planning a “crypto strategic reserve” including Bitcoin, Ethereum, XR P, Solana, and Cardano, as announced by President Trump. CRO isn’t currently listed, but its proposal to support the US crypto ecosystem might make future inclusion possible. The evidence leans toward CRO being a candidate if the proposal succeeds, given its ecosystem initiatives.
CRO ETF Approval Chances
Crypto.com plans to file for a CRO spot ETF in Q4 2025, aiming to attract institutional investors. Given recent approvals of Bitcoin and Ethereum ETFs, it seems likely that a CRO ETF could be approved, depending on regulatory standards and market conditions.
Survey Note: Detailed Analysis of CRO Chain Proposal and Future Prospects
This note provides a comprehensive analysis of the CRO chain’s new proposal, its implications, and the potential for inclusion in the US crypto reserve and ETF approval, based on available data as of March 3, 2025. The discussion aims to cover all aspects relevant to the user’s inquiry, offering a detailed breakdown for informed understanding.
Background on CRO Chain and Proposal
The CRO chain, associated with Crypto.com, is an Ethereum-Virtual Machine (EVM) compatible blockchain built with the Cosmos SDK, supporting interoperability with Ethereum and Cosmos ecosystems. Its native token, CRO, currently has a total supply of 30 billion, with a circulating supply of approximately 26.57 billion, as per recent market data (CoinMarketCap).
The new proposal, detailed in a GitHub discussion (GitHub Discussion), is titled “INITIAL PROPOSAL: Cronos New Golden Age to Onboard Billions and Invest in the U.S. – Cronos POS V5 upgrade.” It involves allocating 70 billion CRO to a Cronos Strategic Reserve escrow wallet, increasing the total supply to 100 billion. This allocation is subject to a 5-year lockup with linear monthly vesting, approximately 1.167 billion CRO per month, or 14 billion annually.
The proposal’s purpose is to foster the growth of decentralized networks, accelerate adoption of traditional finance (Trad-Fi) and AI-powered solutions, support a $CRO ETF, and enhance the US crypto ecosystem’s attractiveness. Technical changes include updating network parameters, such as reducing inflation_max from 3.7% to 1% and inflation_min from 1.2% to 0.85%, while maintaining an 8% staking APR with adjustments to total supply and staking ratios.
Upside of the Proposal
The strategic allocation aims to fund several key initiatives:
- Ecosystem Growth: Supporting decentralized networks and onboarding billions of users, potentially increasing CRO’s utility and demand.
- Trad-Fi and AI Integration: Accelerating adoption through Trad-Fi crossover projects and AI development via grants, developer tools, and funding for projects/Dapps.
- US Market Focus: Enhancing the US crypto ecosystem, which could position CRO favorably for regulatory and institutional acceptance.
- ETF Support: Specifically mentions seeding a $CRO ETF focused on US markets, which could attract institutional investors and increase liquidity.
These initiatives could drive demand, potentially offsetting the dilution effect of increased supply, especially if successful in expanding use cases and adoption.
Downsides of the Proposal
However, the proposal introduces significant challenges:
- Supply Dilution: Increasing the total supply from 30 billion to 100 billion represents a 233.33% increase, which could dilute existing token holders’ value. The vesting over 5 years means the impact is gradual, but still substantial.
- High Inflation Rates: The annual addition of 14 billion CRO from vesting, combined with ongoing block reward inflation (adjusted to 0.85%-1%), results in high initial inflation. For example:
- Year 1: Total supply starts at 30 billion, adds 14 billion from vesting, plus approximately 0.2775 billion from block rewards (at 0.925% of 30 billion), totaling 14.2775 billion new tokens, yielding an inflation rate of about 47.59%.
- Year 2: Starts at 44.2775 billion, adds 14.410 billion (including block rewards), inflation rate around 32.54%. This high inflation, especially early on, could pressure the token price if demand doesn’t keep pace.
- Market Perception: Such a large supply increase might be perceived negatively by investors, potentially leading to selling pressure and reduced confidence, particularly given CRO’s recent price struggles (down 35.7% in a month, per recent reports).
Detailed Inflation Calculation
To illustrate, the inflation rate evolves as follows over the 5 years, assuming an average block reward inflation of 0.925% for simplicity:
| Year | Starting Supply (Billion) | Vesting Addition (Billion) | Block Reward Addition (Billion, ~0.925%) | Total New Tokens (Billion) | Ending Supply (Billion) | Inflation Rate (%) |
|---|---|---|---|---|---|---|
| 1 | 30 | 14 | 0.2775 | 14.2775 | 44.2775 | 47.59 |
| 2 | 44.2775 | 14 | 0.410 | 14.410 | 58.6875 | 32.54 |
| 3 | 58.6875 | 14 | 0.543 | 14.543 | 73.2305 | 24.78 |
| 4 | 73.2305 | 14 | 0.677 | 14.677 | 87.9075 | 20.04 |
| 5 | 87.9075 | 14 | 0.814 | 14.814 | 102.7215 | 16.85 |
Note: The table simplifies by assuming constant block reward inflation at 0.925%, though actual rates may vary between 0.85% and 1%.
This high inflation, particularly in the first few years, poses a risk to price stability, though the proposal’s focus on demand-side growth could mitigate this if successful.
Chance for Inclusion in US Crypto Reserve
The US has recently announced plans for a “crypto strategic reserve,” as per President Trump’s statements on March 2, 2025, including Bitcoin, Ethereum, XR P, Solana, and Cardano (CNBC). This reserve aims to bolster the US digital asset sector, potentially using seized assets or market purchases.
CRO is not currently listed, but the proposal’s emphasis on supporting the US crypto ecosystem, including initiatives like a CRO ETF, could make it a candidate for future inclusion. Given CRO’s role in DeFi and its ecosystem (e.g., dApps like VVS Finance), it might align with the reserve’s goals, though no specific mentions were found in recent announcements. The likelihood depends on regulatory and political developments, with a moderate chance if the proposal gains traction.
Chances for CRO ETF Approval
Crypto.com has announced plans to file for a CRO spot ETF in Q4 2025, as per its 2025 roadmap (CryptoBriefing). This follows the trend of increasing institutional interest in crypto ETFs, with Bitcoin and Ethereum ETFs already approved. The success of such a filing would depend on:
- Regulatory approval by the SEC, which has been more open to crypto ETFs recently.
- Market liquidity and transparency of CRO, given its current trading volume and market cap.
- The proposal’s success in legitimizing CRO through ecosystem initiatives.
Given these factors, there is a fair chance of approval, especially if the market continues to see increased institutional adoption, as seen with recent filings for other cryptos like Cardano (Decrypt).
Unexpected Detail: Vesting Mechanism
An interesting aspect is the use of the Cosmos SDK’s vesting account mechanism, specifically “PeriodicVestingAccount,” for the allocation, tested on the Croeseid testnet. This technical detail ensures a controlled release, potentially stabilizing market impact, but adds complexity to governance and investor perception.
Conclusion
The CRO chain’s proposal offers growth potential but carries significant inflation risks. Its inclusion in the US crypto reserve is possible but not guaranteed, given current exclusions. A CRO ETF filing in 2025 has a reasonable chance of approval, aligning with market trends. Investors should monitor regulatory developments and the proposal’s implementation for impacts on CRO’s value and adoption.
Key Citations