Crypto exchange Crypto.com announced sharp reductions in CRO staking rewards for most tiers of its VISA prepaid card, sending the token price down around 30% in less than a week.
His May 1 blog post explains that card rewards will be reduced by an average of 69.5%, and 100% for the lowest tier Midnight Blue card, “to ensure long-term sustainability.” On the top tier Obsidian map, which requires at least $400,000 in CRO, the rewards drop from 8% to 5%. Reward plan changes begin June 1st.
However, cardholders who had an active six-month commitment prior to May 1 will see no change to their rewards plan until their current term expires.
In addition to the bonus rates, there will also be a three card tier cap. The Ruby Steel tier has a $25 monthly reward limit, while the Royal Indigo and Jade Green cards have a $50 monthly reward limit.
Current stakers are irritated by the exchange’s sudden move to change rewards. High-profile staker Devchart told his 170,000 Twitter followers on May 2 that the exchange’s decision was “the dumbest move of the day.”
And for the dumbest move of the day $cro decided to reduce their staking rewards and add a stupid monthly cap that removes staking incentives.
Luckily I only care about the crypto to weigh on my expenses, but yeah that was a dumb move. pic.twitter.com/qhhpatlpsi
— Devchart (@devchart) May 1, 2022
Responding to the community backlash, Crypto.com CEO Kris Marszalek tweeted on May 3 that proposed changes would be adjusted to reflect “a more balanced approach.”
He said private members using the Obsidian, Icy White, and Frosted Rose Gold cards, rather than making individual changes per tier, would see an 8% annual return. Royal Indigo and Jade Green holders would have a 4% annual return. This adjustment has not yet been confirmed on the exchange’s blog.
Rather than completely eliminating card staking return rates, we offer a more balanced approach: 8% APY for Private Members (Obsidian, Icy White, and Frosted Rose Gold) 4% APY for Royal Indigo and Jade Green cardholders
— Kris | Crypto.com (@kris) May 3, 2022
When Cointelegraph asked the exchange how much more sustainable they expect from reducing rewards, a Crypto.com spokesperson replied via email:
“Crypto.com strives to provide the best possible products and services that meet the needs of our customers around the world. Our recent changes have been made to bring our heavily scaled programs closer to long-term sustainability, and we continue to offer our customers attractive rewards and opportunities.”
Related: Crypto.com’s Cronos partners with Chainalysis to track CRC-20 tokens
The news has clearly had a negative impact on the price of CRO, the native token for Crypto.com’s CRONOS blockchain network. According to Cointelegraph data, CRO price started falling on May 1 from $0.36 at the start of the day to $0.28 at the time of writing. According to CoinGecko, it’s lost a whopping 30% over the past seven days.
https://cointelegraph.com/news/crypto-com-cro-slumps-30-as-staking-rewards-are-slashed Crypto.com (CRO) drops 30% as staking rewards are cut