Crypto.com Takes Heavy Fire, Sustainability and CRO Use Case Being Questioned

0
252
crypto.com
crypto.com

In a statement that is likely to raise eyebrows and invite close scrutiny on Oct 21, leading influencer and cryptocurrency analyst Alex Saunders has raised serious doubts on the long term viability of Crypto.com and the CRO token. He warned that the token lacked any real purpose and that the project’s business model is unsustainable. 

He further stated that the project’s value is coming from the promotion and sale of the token, rather than any organic development of the business. The Crypto.com team has claimed a total of 5M addresses, but the total daily active addresses and resultant users count puts the officially cited figure into question. It can be clearly seen that both of the metrics show an entirely different picture.

Crypto.com (formerly MCO token) requires users to stake their CRO tokens in order to acquire their crypto-debit cards in liquidity pools for the platform’s native liquidity pool and as fixed-term deposits for yields. It ensures that the majority of the supply is locked on the platform. Therefore, while the CRO token is traded on most major exchanges, its liquidity and trading volume remain low.

CoinGecko - Crypto.Com Price Data (24 Sep - 22 Oct)
CoinGecko – Crypto.Com Price Data (24 Sep – 22 Oct)

CRO Price Has Gone Down 35% In A Month

To make matters more complicated, the token price isn’t helping things. CRO tokens have a total supply of 100 billion, out of which, only 20 billion is in circulation. The tokens are slowly released into circulation as rewards for staking or the team is unlocked. Obviously, this creates inflationary pressure, ensuring that the price goes down in the long run unless demand rises up proportionately.

Despite the Crypto.com Coin maintaining the 15th largest cryptocurrency position by market cap at $2.1 billion, it has a relatively low trading volume of merely $ 40-60 million daily, with the bulk of trading occurring on its own exchange. Furthermore, the price has gone down 35% since last month following the team’s announcement on the reduction of staking rewards by 70% on Oct 15. 

For obvious reasons, users aren’t happy with the development. Some noted that it seems to be the company’s business model to attract people first and then lower down the rewards after significant milestones. However, analysts believe that regularly toning down rewards is crucial for long term sustainability. 

Crypto.com Is Not All Gloomy

But, even with the recent tokenomics and price troubles, there’s no doubt that the Crypto.com debit card actually works. They are also said to be in contact with Visa and Mastercard, to renegotiate deals and enhance functionality for their payment processing services.

The team recently introduced the PayID service (similar to Ethereum name service), which allows users to bypass the complex wallet addresses. However, the team’s responses to these allegations need to be seen.

LEAVE A REPLY

Please enter your comment!
Please enter your name here