Crypto exchange Crypto.com revealed significant reductions in CRO staking rewards for most tiers of its VISA prepaid card, causing the token price to tumble by about 30% in less than a week.
According to its May 1 blog post, card rewards will be decreased by 69.5 %, and by 100 % on its lowest-tier Midnight Blue card, “to ensure long-term sustainability.” Rewards on the top tier Obsidian card, which requires at least $400,000( R6.4m) in CRO to be staked, will be reduced from 8% to 5%. The changes to the rewards schedule will go into effect on June 1.
However, cardholders who had an active six-month stake before May 1 will not experience a change in their rewards schedule until their current term expires.
Aside from the reward rates, there will be a cap placed on three tiers of cards. The Ruby Steel tier will have a $25 ( R401)monthly reward limit, while the Royal Indigo and Jade Green cards will have a $50( R803) monthly reward limit.
Current stakers are irritated by the exchange’s abrupt decision to modify the rewards. On May 2, prominent staker Devchart told his 170,000 Twitter followers that the exchange’s decision was “the dumbest move of the day.”
In response to the community backlash, Crypto.com CEO Kris Marszalek tweeted on May 3 that proposed adjustments would be changed to reflect a “more fair approach.” When asked about the exchange’s expectations for increased sustainability as a result of incentive reduction, a Crypto.com spokesperson responded via email:
“Crypto.com is committed to offering the best possible products and services that meet the needs of our customers around the world. Our recent changes were made to bring our substantially scaled programs closer to long-term sustainability, and we continue to provide attractive rewards and opportunities to our customers.”
The price of CRO, the native token for Crypto.com’s CRONOS blockchain network, has definitely fallen as a result of the news. According to Cointelegraph data, the CRO price began to fall on May 1 from $0.36( R 5,78)at the start of the day to $0.28 ( R4.49) at the time of writing. According to CoinGecko, it has dropped by 30% in the last seven days.