Going on with CRO
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Going on with CRO |
although the crypto market as a whole has taken a beating over the last few weeks crypto.com's crop has been hit particularly hard this is because of crypto.com's sudden announcement that it would be making significant changes to its popular crypto products and many are wondering what this all means for cross future potential today I'm going to give you a bit of background about crypto.com and cro bring you up to speed on some important updates and explain why cro might still have long term potential.
let's see why cro could see a recovery if you're unfamiliar with the complex relationship between crypto.com and cro here's what you need to know crypto.com is a crypto company that was founded back in 2016 and it's sort of a one-stop-shop for cryptocurrency crypto.com offers everything from crypto trading crypto borrowing and lending crypto staking crypto payments and even not trading now crypto.com's most popular products are its crypto debit cards and this is primarily.
because they offer a series of benefits like cash back rewards on purchases free subscription services for Spotify Netflix travel discounts and increased cryptocurrency staking rewards crypto.com's crypto debit cards are also made of solid steel which not only makes them durable but lets you flex hard on the no coiners when you're running errands or eating out now almost all of crypto.com's products and services leverage cro in some way and in the case of its metal crypto debit cards purchasing them requires buying and locking up cro for no fewer than 180 days cro was introduced in late 2018 as an erc20 token on the Ethereum blockchain and has since become the native cryptocurrency coin of two blockchains the crypto.org chain.
the Chronos chain now the crypto.org chain launched last march and has since been integrated into many of crypto.com's products and services like almost every other exchange chain the crypto.org chain was built using the cosmos SDK this means it uses a proof-of-stake blockchain that can process up to 10 000 transactions per second the trade-off is of course centralization with the crypto.org chain only having 100 validators but for what it's worth all these validators are run by independent third parties on the crypto.org chain cro is used for staking to pay for transaction fees and for governance note that a portion of crop supply was allocated to staking rewards for validators on the crypto.org chain like many other cosmos-based blockchains the crypto.org chain has limited smart contract functionality and this is where the Kronos chain comes in the Chronos chain launched last November and has also been integrated into many of crypto.com's products and services since that time like the crypto.org chain the Chronos chain was built using the cosmos SDK.
the main difference is that the Kronos chain leverages the Ethereum virtual machine for smart contract functionality and the EVM's built-in constraints mean the Kronos chain can process between 200 and 300 transactions per second another difference is that the Chronos chain is only secured by 25 validators and it uses proof of authority rather than proof of stake. about the different consensus mechanisms in cryptocurrency you'll know that validators on proof of authority chains must prove their identity to some centralized authority in this case the company behind the Kronos chain is more about them in a moment now while cro is used to pay for transaction fees on the Chronos chain.
it seems no additional cro was allocated to validators as they do not need to stake they also don't seem to earn very much by way of transaction fees and cro holders do not have governance over the Kronos chain this barely scratches the surface of the complex relationship between crypto.com cro the crypto.org chain and the Kronos sidechain and if you want to learn the details there. now it's been about six months since I last covered cro and it's safe to say that a lot has happened since then and not just in the last couple of weeks shortly after my last video went live crypto.com announced that it purchased the naming rights to the famous staples center stadium in Los Angeles for 20 years for 700 million dollars.
crypto.com also announced that it had partnered with silver gate to facilitate USD deposits and withdrawals for users in the united states in early December the crypto.org chain announced the Draco 2 upgrade which increased its blockchain smart contract functionality and native coin issuance via the cosmos ibc more on that in just a second the Chronos chain also announced its first round of ecosystem grants courtesy of particle b a startup accelerator for Chronos that received nearly 1 billion crops in February last year.
meanwhile, crypto.com announced that it had purchased two exchanges in the united states to expand its exchange offerings in the country in mid-December the Kronos chain announced its integration with the cosmos ibc making it possible for it to seamlessly interoperate with other cryptocurrency blockchains that have integrated ibc in mid-January select crypto.com ads were banned here in the UK by our infamous advertising standards authority because said ads were misleading now this was pretty ridiculous given that literal coins are being advertised all over the country to this day not naming any names here crypto.com also announced that its venture capital arm would be increasing the size of its next fund from 200 million to 500 million dollars money that reportedly came from crypto.com's balance sheet that same day.
it was reported that crypto.com had suspended withdrawals for all its users after quoting suspicious activity on its platform a few days later crypto.com revealed that almost 500 of its users had been hacked and that their accounts had been drained of over 34 million dollars in crypto luckily all affected users were quickly refunded by crypto.com the company also quote revamped and migrated to a completely new 2fa infrastructure and introduced an account protection program that covers up to 250 000 in losses per user at the end of January the Chronos chain integrated with terror via the cosmos ibc bringing terra's just stablecoin to the Kronos chain ecosystem.
now if you're wondering what the hell happened to UST's peg the other day you can check out my explainer video on my second channel coin bureau clips that will be in the description not for the faint-hearted anyways in early February the crypto.org chain announced that it issued its first coin using the cosmos in which was polka dots dot not to split hairs but it's worth pointing out that this be enabled dot is technically a wrapped token living on the crypto.org chain backed by actual dot coins being held by crypto.com, not a coin native to the crypto.org chain in mid-February crypto.com made the news because of its epic crypto ad which aired during the 2022 super bowl the ad was called quote the moment of truth.
it has since received almost 24 million views on youtube that's in addition of course to the 208 million who saw it on live tv the Chronos chain also announced that the cro cryptocurrency would henceforth be simply referred to as Chronos according to the blog post quoting the new name properly reflects the decentralized nature of cro and recognizes the explosive growth of the Kronos ecosystem yes indeed it does then in early march crypto.com suddenly announced that it had blocked access to its lending services to users located in over 40 different countries and asked that any users in those countries with existing loans repay in about a week, ouch crypto.com also announced that it began rolling out its crypto exchange platform in the united states.
though it still seems to be limited to institutional investors for the time being at the end of march crypto.com announced that it had become the official sponsor for the upcoming FIFA world cup in Qatar for an undisclosed amount my guess is hundreds of millions shortly afterward crypto.com announced that it would be establishing a regional headquarters in Dubai following the lead of other big-name crypto companies like Binance and fix on that note.
anyhow in April, the Chronos chain announced that it had bridged to a cache network thanks to the cosmos in foreshadowing a potential integration with cosmos' most popular decentralized storage solution the Kronos chain also announced a partnership with blockchain analytics firm analysis to track crypto transactions on its blockchain the Chronos chain's aforementioned startup accelerator particle b also announced that it would be rebranding to Kronos labs the announcement specifies that Chronos labs are quoted the team web3 startup accelerator and ecosystem development fund focused on growing the Kronos ecosystem this is a bit confusing because both the crypto.org chain and the Chronos chain were built by a software company called cro protocol labs that are based in the cayman islands just poor wording.
I suppose at the beginning of may crypto.com made the crypto headlines when it announced that it would be significantly reducing and for some tiers eliminating the rewards on its crypto debit cards namely cashback rewards and staking rewards the outcry from the community was so intense that crypto.com CEO Chris Marszalek took to Twitter the next day to announce that it wouldn't be slashing the staking rewards as aggressively as had originally been announced though the reviewed staking rates were still significantly below what they were not surprisingly many crypto.com users were still extremely unhappy with the changes which resulted in Chris having to take to Twitter again and announced that cashback rewards would likewise be increased from near zero.
but still significantly lower than the previous cashback rewards now it's important to note that the changes to the rewards for crypto.com crypto debit cards will begin on the 1st of June and anyone who purchased and locked up cro before that date will continue to earn the previous reward rates for the duration of the 180-day lock-up period details in the description the very next day crypto.com announced that it had surpassed the 50 million user mark for reference crypto.com reached the 10 million user milestone in February last year.
just a few days ago the Chronos chain completed its first major mainnet upgrade dubbed heightens which introduced eip1559 fee burns to the Kronos chain blockchain now if you want to learn more about the ins and outs of eip 1559. anywho as amazing as some of these developments announcements partnerships and upgrades have been cross-price has plummeted to levels not seen since last autumn which to be fair wasn't all that long ago like the rest of the crypto market cro has been in a downtrend since its all-time high last November and this has mostly to do with macro factors like the federal reserve raising interest rates. cro effectively fell off a cliff after crypto.com announced.
it would be scaling back rewards for its metal crypto debit cards this is simply because getting a metal crypto debit card requires purchasing and locking up lots of cro for a very long time which has the same economic effect as buying and holding prices go up as far as I can tell crypto. coms crypto cards seem to have been the primary demand driver for cro and I suspect that the number of new cardholders coming in slowed down significantly late last year as interest in the crypto industry started to wane what's annoying is that cross rebrand to Kronos meant I wasn't able to track exactly how much its circulating supply has increased since I last covered the project as the URLs on both coin market cap and coin gecko have recently changed what I was able to find however was an image from my previous cro update which shows how much cro crypto.com's Ethereum wallets were holding at the time.
the difference between now and November reveals that crypto.com seems to have withdrawn about 2 billion cro from one of its multi-sig wallets but only to move it to another of its multi-sig wallets this is pretty surprising because crypto.com has spared no expense on its marketing activities and the like yet it apparently hasn't sold any cro this suggests that crypto.com is making some mad profits from its crypto products there's even more surprising stuff happening on the demand side of the equation for starters the number of wallets holding croon Ethereum has doubled since November, unfortunately, I wasn't able to find any wallet statistics for the crypto.org chain.
but if the Chronos chain is anything to go by its adoption has been explosive that's because the Chronos chain has seen a staggering 10x increase in wallet addresses specifically from 77k to nearly 800k according to to defy llama the total value locked on Kronos protocols has likely increased by 10x specifically from 200 million dollars to 2 billion the only thing that doesn't really add up is the number of daily transactions on the Kronos chain which only increased slightly while all other on-chain metrics went to the moon I take this as a sign that most of the liquidity on the Kronos chain is coming from a handful of whales which is consistent with something the IMF mentioned about d5 in its recent crypto report more about that in the description I digress.
now when it comes to how high cro could go in the short term it's not looking too good that's just because the primary demand driver for the crop has been decimated and its massive market cap means is going to have a hard time finding the money to fill that gap when it comes to how high cro could go in the long term this ultimately depends on all the upcoming milestones for crypto.com the crypto.org chain and the Kronos chain as a company crypto.com doesn't exactly have a roadmap but a few milestones were mentioned by CEO Chris Marszalek in recent interviews in November Chris mentioned that crypto.com's endgame is to become the largest crypto platform on the planet and it plans on achieving this adoption by focusing on marketing as well as blockchain gaming and nfts crypto.com also wants to establish a headquarters in every region in April Chris mentioned that crypto.com wants to stay as small as possible while expanding.
so that it can move faster as a company this is the same thing crypto.com venture capital arm said earlier this year Chris also seemed to hint that crypto.com was working on building a decentralized social media platform to drive mass adoption though there currently isn't any official news from the company about this supposed milestone as for the crypto.org chain its roadmap was released last march it consists of five network upgrades two of which have been completed the remaining three will be to introduce an amm dex to the crypto.org chain enable fully-fledged smart contract functionality and integrate with oracle's for pricing data respectively as for the Chronos chain its roadmap was released in January and most of the milestones it mentions involves integrating upcoming technologies that will be introduced to all cosmos-based blockchains more about those technologies in the description the Kronos chain roadmap also specifies that an on-chain governance structure will be introduced later this year that it will be increasing the number of validator nodes securing its blockchain.
the deal explore the creation of layer 2 scaling solutions as required what's strange is that the Kronos chain roadmap makes no mention of moving away from proof of authority and this brings me to the concerns i have about cro my first concern with cro is centralization it's clear that cross-price action is still heavily dependent on the actions of crypto.com and this will probably be the case for the foreseeable future you'd think that the crypto.org and Chronos chains both add to cross decentralization but this doesn't seem to be the case that's because crypto.org still seems to be thoroughly under crypto.com's influence case in point most of its social channels redirect to crypto.com's social channels the centralization is even more apparent with the Kronos chain because the founder of Chronos labs is also the co-founder and former CTO of crypto.com recall that the Kronos chain also only has 25 validators that must be approved by the Kronos chain team which may or may not be Kronos labs.
the fact that the blog posts of all three entities have consistently emphasized the decentralization of cro as a cryptocurrency suggests that decentralization is something crypto.com is also concerned about how my second concern about cro is its supply most of the crow's supply is already in circulation and this means there isn't much left to go around normally this would be a good thing but there are lots of entities that need access to cro at any given time this actually seems to be why crypto.com nuked cro staking rewards for its crypto debit cards if cross taking rewards had remained high it's possible that there wouldn't be enough cro left for stuff like say validator staking rewards on the crypto.org chain this may be also why the Chronos chain doesn't seem to have any plans to move away from proof of authority moving to proof of stake would just result in less runway for cro to make things worse.
it's not entirely clear how much runway cro-dependent products have the fact that crypto.com seems to hold what's left of crow's supply suggests it's their decision at the end of the day and it's safe to say that they've been using this power wisely albeit not very mindfully how this relates to my third concern about crop and that's competition crypto.com isn't the only crypto company out there offering cool crypto cards and many of its competitors will be offering much more attractive rewards on their cards come the 1st of June and without all the sudden major changes the crypto.org chain is also just one of many cosmos-based blockchains and though it's taken the right steps as far as integrations go it barely cracks the top 10 by ibc traffic according to to map of zones.
it's a similar story with the Kronos chain for context the Chronos chain was built using EVM technology developed by another cosmos project called ether mint as it so happens ether mint rebranded to evmos last autumn and recently launched its own mainnet even though evmos hasn't seen the same adoption yet it's a direct competitor to the Kronos chain which you'll recall seems to have some inconsistent on-chain statistics for what it's worth crypto.com clearly has no shortage of capital and it's proven that it won't hesitate to splurge to grow its ecosystem which of course includes the crypto.org and Chronos chains the crypto.org and Chronos chains are still very much in development as well and in time they might just manage to create the demand dynamics required to push cro to new all-time highs then again the same can be said for other exchange tokens which are also competitors of cro.
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