Crypto.com Plans to Burn 70 Billion CRO Tokens In Run-up to Network Launch
Crypto exchange Crypto.com has announced plans to burn its CRO tokens in anticipation of the launch of its blockchain on mainnet.
Largest Token Burn in History
The cryptocurrency and payment platform founded in 2016 and headquartered in Hong-Kong revealed its intention to burn around 70 billion of its native CRO tokens, which it claims is the largest in the industry. Per a blog post that has since gone viral, the crypto exchange said the decision was an essential step towards fully decentralizing the blockchain network.
The platform, which currently allows its users to trade up to 90 crypto assets, said it would begin the “burn” with 59.6 billion CRO tokens Monday. The remaining 10.4 billion is in a smart contract and will be burnt monthly. This will see the circulating supply of the CRO tokens increase to 80% from 24%.
Burning a digital asset's token occurs when a certain number of coins are permanently removed from circulation, reducing its total supply. It is a common practice in the crypto industry. This way, its creators can control inflation, generate more value for holders and maintain the network's general health. A token burn is a regular event with popular cryptocurrency exchange Binance. The exchange buys and destroys its Binance Coin (BNB) every quarter. The company burns tokens worth about 20% of its quarterly profits. There have been 14 burn events so far. The last burn took place in January 2021.
Crypto.org Chain Coming March 25
Crypto.com said that 5 billion of a possible 5.9 billion CRO will be reserved for mainnet block rewards for its chain validators and delegators who secure the network. The remaining 900 million CRO will be kept for the chain’s ecosystem development.
As earlier explained, Crypto.com's blockchain dubbed the “Crypto.org Chain” would be rolled out on the mainnet on March 25, 2021. The blockchain will see Crypto.com exit the Ethereum network along with its native digital token CRO.
The fully decentralized, open-source, unregulated blockchain is expected to provide faster transaction speed at low costs while ensuring a fully decentralized network. It will also be developing decentralized finance (Defi) products and non-fungible tokens (NFTs) on its upcoming mainnet.
The CRO token has a market cap just north of $4 billion after rising 20% following cryptocurrencies gaining wide acceptance.