Cronos CRO
What is Cronos?
Cronos is a multi-network cryptocurrency that supports a broad ecosystem of blockchain-based services under the Crypto.com brand.
Crypto.com’s mission is to “accelerate the world’s transition to cryptocurrency”. It aims to achieve that through five main product channels:
- The Blockchain - Crypto.org Chain & Cronos Chain
- Payments - Point of Sale Payment network & Cashback Prepaid Visa Card
- Trading - An App; Cryptocurrency Exchange; Crypto Tax Service
- Financial Services - DEFI platform; Crypto Earn Products; Lending
- The Metaverse - An NFT platform
Given the broad range of products that sit under the Crypto.com brand umbrella, which straddle both traditional finance and crypto, and the very traditional marketing tactics, it can be confusing to understand whether Cronos is a traditional business or blockchain.
The only thread that runs through all the different elements of the Crypto.com ecosystem is the Cronos coin, which was rebranded from CRO on 18 Feb 2022 in an attempt to focus on Crypto.com’s decentralised credentials.
Cronos Blockchain Ecosystem: Crypto.org & Cronos Chain
The CRONOS coin is an ERC-20 token, launched on Ethereum in 2018. It wasn’t until two years later that Crypto.com launched its own standalone blockchain, Crypto.org.
Crypto.org is a Proof of Stake blockchain built using the Cosmos SDK, which is like an off-the-shelf blockchain framework. It uses the Tendermint consensus mechanism limiting the number of active validators to 100 which has resulted in criticism due to a lack of decentralisation..
Building on Cosmos meant that Crypto.org could easily bridge other blockchains built on Cosmos using IBC - Inter Blockchain Communication Protocol.
As a Proof of Stake Chain, holders of CRO can stake their funds to earn rewards as Validators or delegate their CRO to Validators through a DEFI wallet.
This was step one in Crypto.com’s aim to become more decentralised and leverage its own blockchain infrastructure to grow the utility of the Cronos coin.
The second step saw the launch of an EVM compatible blockchain, also on Cosmos, called the Cronos Chain, in November 2021, using a different consensus mechanism called Proof of Authority.
Why launch a second chain? EVM compatibility means that it functions like the Ethereum Virtual Machine, and supports Smart Contracts, so anything that works on Ethereum can be ported over and work on the Cronos Chain.
So the launch of the Cronos Chain means that dApps built on both Ethereum and the Crypto.org chain can be bridged, with the aim of building an ecosystem of DeFi, NFT, and Metaverse applications. This means that Cronos is interoperable with both Ethereum and Cosmos, two large ecosystems, but due to its consensus mechanism supports only 22 validators.
According to Defi Llama, by March 2022 the Cronos chain was already listed among the top ten chains with $3 billion total value locked. Almost half of that TVL is locked into a DEFI protocol called VVS Finance.
This marks a quite remarkable shift for the Crypto.com brand, which had previously been known largely for its prepaid Visa card. However, the wider market sell-off saw the TVL decline to around half that amount by May 2022.
What makes Cronos unique?
What differentiates Crypto.com from other organisations within the crypto space is the approach they have taken to driving the adoption of its native coin. Rather than start with the blockchain technology and try to add utility, Crypto.com focused first on the utility, encouraging customers to buy and lock up Cronos to receive benefits through a pre-paid metal Visa Card which launched in October 2018, starting in Asia.
Cronos Payment Products
The Crypto.com card works at any Visa-supported business, paying in local Fiat currency, but rewarding the holder with a fixed cashback percentage depending on the amount of Cronos they are prepared to lock up. The card is managed through the Crypto.com Mobile App which enables users to top up funds.
The rewards are based on specific tiers differentiated by the amount of CRO this is staked, with a minimum lock-in of six months. These tiers were revised down, effective June 1st 2022, with maximum caps on monthly earnings introduced; the impact of this is discussed below.
Cardholders enjoy other perks, such as rebates on popular services like Netflix or Spotify and access to first-class airport lounges.
The Crypto.com Card and App are targeted directly at people who are new to crypto. It wraps crypto around a familiar product (a Visa card) and technology (mobile App) but enables the user to gradually experiment with buying/trading other cryptocurrencies.
It is important to note that the trading fees charged by the App far exceed the standalone exchange as does the Spread on purchases, so the convenience comes at a significant cost.
Alongside the very consumer-focused App is Crypto.com Pay, a mobile payment service that covers Point of Sale, Gift Cards, Airtime and P2P. This is the B2B side of the Cronos ecosystem, aiming to increase Cronos adoption by providing a cheaper and more convenient payment gateway.
Cronos & Trading Services
The Crypto.com App isn’t just for managing the pre-paid Visa Card, it also enables users to buy and sell a huge range of cryptocurrencies and even set recurring purchases. It is also connected to a full-blown desktop cryptocurrency exchange, available under the main www.crypto.com domain.
The use of Cronos is incentivised across the exchange as trading fees are discounted when paid with the native token. The exchange was soft-launched in the US in March 2022, which is seen as a key milestone in the acquisition of new customers, and building value into Cronos.
Cronos & Financial Services
Though the Cashback Visa Card and App are the focus of customer acquisition via marketing and sponsorship, Crypto.com also offers a range of other financial services and reward mechanisms which in different ways encourage users to buy and hold Cronos in order to create price stability.
- The Syndicate - Discounted purchase of popular cryptocurrencies for customers that stake Cronos.
- Super Charger - Locking up Cronos and earning returns of promotional cryptocurrencies from a Pool, in proportion to how much/how long CRO is staked.
- Earn - Earning interest on cryptocurrency with tiered rates that increase where Cronos is staked for a fixed period.
- Credit - Using crypto as collateral to borrow different coins
- DeFi - A separate App where users can stake their Cronos to validators on the Crypto.org chain and earn up to 13% passive return, Swap tokens and bridge to supported DEFI protocols on the Cronos Chain.
Cronos & the Metaverse
The final piece of the Crypto.com puzzle was launching a platform to buy, sell and create NFTs in 2021, in order to leverage Cronos within the Metaverse.
Though the platform features collections from Aston Martin, the NBA’s 76ers and UFC, the platform is perhaps the best example of Crypto.com spreading itself too thinly. Cronos can be used to purchase NFTs, but users can also use debit/credit cards and are required to provide KYC.
The NFT creation process isn’t open to all users but operates on a submission basis, presumably in an attempt to reduce spam and low-quality projects, given minting is cheap.
Cronos Market - Who’s Using CRO
The Crypto.com App has featured within the top 10 most downloaded Apps within the App Store and Playstore in 2021, and according to its own data accounts for a large proportion of their reported 50 million customers.
There is obviously a big difference between a customer and someone who is actively using Cronos. The coin is ranked within the top twenty coins on Coinmarketcap, with daily trading volume peaking at over $250 million in early 2022, helped by its Coinbase listing in November 2021, which is the most active exchange trading Cronos, reflecting its recreational appeal. Volume has dropped considerably as wider market conditions have turned bearish.
According to CMC there were almost 250,000 addresses holding Cronos in March 2022. That figure is at odds with the claim to 50 million customers, which suggests that either Cronos isn’t that popular with Crypto.com customers, or the number of addresses doesn’t account for users of the App/Exchange.
One of the most interesting, and perhaps concerning stats, is the address distribution. As of May 2022, the top ten Cronos addresses hold 92% of the total supply. Though this likely includes Crypto.com themselves, this doesn’t paint a healthy and decentralised distribution, though this is far from unusual within crypto.
Cronos Coin Tokenomics
Cronos was launched from a Pre-Mine in 2018 with a fixed supply of 100 billion CRO. There was no ICO, pre-sale or public sale as is common with many cryptocurrencies. The white paper details the original supply schedule for CRO.
A major update to the distribution was announced in February 2021 when Crypto.com announced that 70 billion CRO would be burned.
The burn event has had a significant impact on the relationship of the circulating supply of CRO to the maximum supply, which now stands at 83%. This should be considered as a positive in terms of potential value, as the larger the outstanding supply the greater the risk of dilution.
CRONOS Price History
CRO was launched on December 14th 2018 at a price of just under 2 cents. It hit an all time low of $0.01149 just a few days later on December 17th.
The value of CRO reached an all time high on November 24th 2021, just shy of a $0.97, which represented an increase of 1,380.6% from its launch. The November high was driven by positive market conditions and feel-good from the heavy marketing activities, including announcements around Super Bowl advertising. Within six months CRO had retraced >80%, as the wider market capitulated.
CRO is now trading in a price range comparable to August 2020 tracking the wider market. The drastic cut in card rewards (announced on 1 May 2022) may have been preempting the bear market conditions. Whatever the reason, there is an expectation that price will continue to feel selling pressure for up to 180 days as users hit the unstaking window and dump their CRO due to the incentive reduction.
Countering the exodus of disillusioned existing customers will be the acquisition of new card users from continued marketing efforts and attempts to build the Cronos Chain DEFI ecosystem, though that sector has been hit by the Terra collapse.
Where to buy Cronos Cryptocurrency?
The Cronos cryptocurrency can be bought through the Crypto.com App, available on Android and iOS, their online exchange or any of the major exchanges listed on Coinmarketcap.com or Coingecko. Be aware that individual exchanges will apply country restrictions. Crypto.com for example doesn’t allow US retail customers at the time of writing.
How to Buy Cronos (CRO) Cryptocurrency?
In order to buy Cronos (CRO) you should follow these general steps:
1 - Find a supporting exchanging that operates in your country and accepts your currency and preferred payment method
2 - Create an exchange account and apply all available security measures such as 2FA and a strong password.
3 - Submit KYC documentation and what for approval
4 - Use a quick convert option and a bank card to buy instantly
5 - To buy at specific price make a deposit of your local currency (by card or bank wire) and place a limit order on the exchange at the required entry price
Investing In Cronos, Marketing & Controversy
Crypto.com seems to have a strategy of spending significant amounts of money marketing its CEFI products to mainstream audiences, then attempting to educate and migrate them to services that earn more revenue (the exchange) and build more value into the Cronos (DEFI).
It is estimated to have spent over $1bn in marketing campaigns in 2021 alone, which included spending $700mn on the naming rights to the home of LA Lakers/Kings/Clippers and $100mn on a campaign fronted by actor, Matt Damon.
The company has signed sponsorship deals with F1, UFC, Paris St Germain (soccer), 76ers (NBA), Montreal Canadiens (NHL) and Aston Martin to name just a few. Oh, and they also paid to advertise at half-time during the 2022 Super Bowl featuring LeBron James giving advice to his younger self and are a major sponsor of the 2022 Soccer World Cup in Qatar.
Though the figures are not in the public domain it is pretty clear that Crypto.com’s marketing spend is a gamble on future adoption, rather than a justification of current revenue. One of the popular mantras within crypto is ‘we are early’ and Crypto.com must be banking on this, spending heavily to create brand recognition in anticipation of the coming wave of adoption.
Cronos can acquire customers through their popular prepaid card, generating revenue from in-app purchases then migrate users to the full-blown exchange - generating more fees - and educate them into staking on Crypto.org as well as bridging to the growing DEFI ecosystem building on Cronos Chain.
Well, that is the theory anyway. Cronos released figures in May stating they had 50 million users and expected double that by the end of the year but CRO’s rapid and steep decline from its ATH just shy of $1 and the drastic reduction in card rewards highlights how much of a gamble crypto.com are taking, and courting controversy on the way.
The Matt Damon campaign led with the slogan ‘Fortune Favour the Brave’ and featured the A-lister walking through a virtual pantheon of pioneers, such as the Wright Brothers. The message; buying crypto is about bravery. The campaign was widely panned for lacking humility and encouraging risk-taking. Though any publicity is good publicity, Crypto.com, and by association Cronos, risk being associated with the unhealthy aspects of crypto - most notably speculation.
The Matt Damon campaign will run its course and eventually be forgotten, while their sports sponsorships are much long-term, but it was a sign that Cronos is perhaps getting ahead of itself in its desire to build the most recognisable mainstream crypto brand.
The company does benefit from the absence of venture capital and has talked about an IPO but the slashing of card rewards was received very negatively by the community so it is interesting that users are reported to be growing as incentives are declining.
What’s the Size of the Cronos Community
One effect of Crypto.com’s huge market spend is to build a thriving community for Cronos. In a short period of time, the Crypto.com sub Reddit has jumped to over 170,000 members, while its main Twitter account has over 2million followers.
Its Youtube Channel has over 80,000 subscribers, which is pretty small in the grand scheme of things, but you can see the impact of featuring big names. The video featuring King James has already racked up over 21million views, whereas its standard fair, promoting new products, barely scrapes 1k views.
The future for Cronos
The challenge Crypto.com faces in its mission to “Accelerate the world’s transition to cryptocurrency” is whether its enormous marketing spend can be matched by efforts to build products that are sustainable, add value to Cronos and create a truly decentralised ecosystem.
Right now Cronos sits uncomfortably straddling the worlds of CEFI and DEFI. That might either prove to be a strategic masterstroke or a very expensive misreading of how crypto adoption will pan out.
FAQs about Cronos (CRO) Cryptocurrency
When was Cronos (CRO) first launched?
The CRONOS coin is an ERC-20 token, launched on Ethereum in 2018. It wasn’t until two years later that Crypto.com launched its own standalone blockchain, Crypto.org.
Who are the Founders of Cronos Cryptocurrency?
Cronos was founded by Bobby Bao, Gary Or, Kris Marszalek, and Rafael Melo in 2016 and was originally known as "Monaco". The company rebranded to Crypto.com in 2018 after purchasing the domain name, then again to Cronos in 2022.
Where can Cronos be traded?
Cronos can be traded at all major cryptocurrency exchanges including Coinbase, Binance and its own exchange Crypto.com which launched to institutional users in the US in March 2022.
Is Cronos cryptocurrency safe?
In the light of the recent Terra collapse all cryptocurrencies should be treated with caution, especially where they promote unrealistic rewards. As already stated the Crypto.com card has dramatically reduced its cash-back and staking rewards which have been interpreted by some analysts as an admission that they are unsustainable.
If that action was seen as negatively impacting users it was in contrast to the decision in 2021 to burn 70bn CRO tokens which was to the benefit of all holders.
Cronos is rapidly building a DEFI ecosystem on its new EVM-compatible chain where half of TVL is on VVS Finance offering over 100% APY. Those kinds of returns aren’t sustainable so should be treated with extreme caution.
In January 2022 the Crypto.com exchange was hacked with 432 users losing funds to the value of $34 million. As a result of the incident, Crypto.com introduced an account protection scheme (WAPP) protecting qualified users up to the value of $250,000.
Later the same year, Crypto.com, feeling the impacts of the crypto downturn, announced layoffs for a significant portion of its workforce, affecting some 200 workers.
https://twitter.com/kris/status/1535431489315213312
Ad Age reported, however, that the number of employees cut off was many times more -- as many as 2,000 had lost their jobs. The reaction from investors wasn't surprising, and Crypto.com's reputation for skewing the numbers suggest a trend you should be wary of.
At just about 10 cents, though, CRO is irresistible if you believe they can climb out of their hole.