Crypto.com slumps 30% as staking rewards are slashed
Crypto.com has shot itself in the foot by announcing substantial reductions in rewards for its Visa cardholders, causing CRO price to tank.
Crypto exchange Crypto.com announced severe reductions to Cronos (CRO) staking rewards for most tiers of its VISA prepaid card, which has forced the token price to fall around 30% in less than a week.
Its Sunday blog post explained that card rewards will be reduced by an average of 69.5% and 100% on its lowest tier Midnight Blue card “to ensure long-term sustainability.” On its highest tier Obsidian card, which requires at least $400,000 in CRO to be staked, rewards will drop from 8% to 5%. Changes to the rewards schedule will begin on June 1.
However, cardholders who had an active six-month stake before Sunday will not see their rewards schedule change until their current term expires.
In addition to rewards rates, there will also be a cap set on three tiers of cards. The Ruby Steel tier will have a $25 per month limit, while the Royal Indigo and Jade Green cards will have a $50 monthly limit on rewards.
Current stakers are irritated by the exchange’s sudden move to change the rewards. High-profile staker Devchart told his 170,000 Twitter followers on Monday that the exchange’s decision was “the dumbest move of the day.”
And for the dumbest move of the day, https://t.co/2VyM3mIsbK $CRO decided to reduce their staking rewards, add some stupid monthly cap reward that removes staking incentives.
Thankfully I just care about the crypto to debit for my expenses but yeah that was a moronic move. pic.twitter.com/qhhpatlpsi
— Devchart 👨🏻💻 (@devchart) May 1, 2022
In response to the backlash from the community, Crypto.com CEO Kris Marszalek tweeted on Tuesday that planned changes would be adjusted to reflect “a more balanced approach.”
He said that rather than issue individual changes per tier, Private Members who use the Obsidian, Icy White, and Frosted Rose Gold cards would receive an 8% annual yield. Royal Indigo and Jade Green holders would have a 4% annual yield. This adjustment has not yet been confirmed on the exchange’s blog.
The community has been really vocal with regards to the changes to the card program announced yesterday. We care deeply about the community, we hear you & always listen to you.
As a result, we’re revising card staking rates. 🧵
— Kris | Crypto.com (@kris) May 3, 2022
The news has had a clearly negative impact on the price of CRO, the native token for Crypto.com’s CRONOS blockchain network. CRO price began tumbling on Sunday from $0.36 at the start of the day to $0.28 as of the time of writing. It has lost a whopping 30% over the past seven days, according to CoinGecko.