- Voting is underway on the Cronos network on two proposals to change CRO supply governance and staking funding, with both votes scheduled to end on October 3.
- One proposal would burn 228 million CRO from the community pool, while the other would use all revenue from Ult and Cronos Launch for CRO buybacks and subsequent token burns.
- The second proposal would use the strategic reserve to fund future Cronos POS staking rewards as CRO issuance declines.
The Cronos network is considering two proposals that would alter the CRO supply governance mechanism and funding for staking rewards. The measures would reduce the token supply through burns while assigning the strategic reserve to support staking as issuance declines.
Proposal Calls for 228 Million CRO Burn
The first proposal calls for transferring 228 million CRO from the community pool to a special “dead” address that no one can access. If approved and implemented, the tokens would be permanently removed from circulation.
The transaction would be the fifth CRO burn under a mechanism that redirects a portion of tokens generated through issuance to the community pool. Cronos previously conducted four burns of 50 million CRO each, removing a total of 200 million tokens.
If the latest proposal is implemented, the cumulative amount of burned CRO would increase to 428 million. At least 33.4% of staked CRO must participate in the vote for the proposal to be approved.
Product Revenue Would Fund Buybacks and Burns
The second proposal would change how revenue from Cronos Labs products is distributed. If approved, 100% of revenue from Ult and Cronos Launch would be directed toward open-market CRO purchases, followed by token burns.
The proposal calls for the buybacks and burns to occur monthly on-chain, with the hash of each transaction published. Existing capital would fund operating expenses, infrastructure and development costs.
Cronos Launch debuted on September 15, followed by Ult on September 17. According to the proposal’s authors, revenue from the products should create a direct mechanism for reducing the CRO supply: product revenue would fund token purchases, and the acquired CRO would then be burned.
Strategic Reserve Would Support Staking
A separate part of the second proposal would use the strategic reserve to fund future staking rewards in Cronos POS. The measure is tied to the reduction in CRO issuance provided for under proposal No. 1291, “A New Era for CRO.”
Because all revenue from Ult and Cronos Launch would be allocated to buybacks and burns, that revenue would not finance rewards for stakers. Instead, the strategic reserve would become the funding source for those rewards as issuance declines.
The proposal would leave existing staking parameters, reward rates, lockup levels and bonus rates for delegators unchanged. Its authors said the two mechanisms would serve separate purposes: one would reduce CRO supply, while the other would maintain funding for staking rewards as issuance decreases.
Voting on both proposals will end on October 3.
Source: Incrypted
