CRO Token slumps after Crypto.com Storm: here's what happened
Crypto.com recently announced radical changes regarding the cashback on payments made with debit cards issued by the platform and on the staking reward of CRO token.
Crypto.com: what happened
On May 1, 2022, the news was published on the company's blog, drawing the anger and frustration of most of the customers. From 1 June, the conditions will change:
- Debit cards' cashback, with the addition of a maximum attainable limit for each level
- Staking rewards on CROs tied to obtaining one of the visa cards
https://twitter.com/cryptocom/status/1520752215329181696?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1520752215329181696%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.webeconomia.it%2Fcrypto-nuove-condizioni-cashback-e-staking%2F
Crypto.com changes
First of all, it should be noted that users who activated a 180-day stake before Sunday 1 May will not have their returns changed. Also, nothing will change for Netflix and Spotify cashbacks obtainable with some cards. The changes in detail:
- Midnight Blue: cashback reduction from 1% to 0%
- Ruby Steel: cashback reduction from 2% to 0.5%, in addition to a maximum of $25 per month in cashback
- Royal Indigo and Jade Green, cashback reduction from 3% to 1.5%, in addition to a maximum limit of $50 per month
- Icy White and Frosted Rose Gold, cashback reduction from 5% to 3%
- Obsidian, cashback reduction from 8% to 5%
(Changes on Crypto.com cashback)
The Crypto.com Community Reaction
The reaction of the crypto community was not long in coming. Many customers have shared on social media their disapproval of Crypto.com's decision. Cashback, prior to the latest announcement, was a cornerstone of the business model of one of the largest cryptocurrency exchanges. Many users have signed up for Crypto.com and staked CRO just to take advantage of the high cashback. Among them, there are users who are not even interested in crypto investments or trading, but who were only embracing the Crypto.com project for the convenience of having a debit card with which to spend euros (avoiding exposure to the volatility of the crypto market) and with which to get cashback and benefits (so far) enviable by other competitors. It is normal to see widespread dissatisfaction among Crypto.com card users. https://twitter.com/ningyo90/status/1520858318050369537
Crypto.com CEO's Response
Crypto.com's CEO, Kris Marszalek, decided to take a personal stand in the wake of ongoing customer complaints, demonstrating that the company listens to its community and continually strives to satisfy them. He first tried to explain that the changes to Crypto.com's terms and conditions served to make the Cronos Ecosystem more sustainable in the long run, and then moved on to actions. On May 3, Crypto.com announced a change in staking rates, proposing a more balanced approach. Cardholders like Obsidian, Icy White and Frosted Rose Gold will get 8% apy on cro staking, while Royal Indigo and Jade Green cardholders will get 4% apy. Furthermore, on May 5th, Kris himself, through a tweet, decided to communicate a further recalibration on the cashback percentages:
- Ruby steel, cashback increased from 0.5% to 1%
- Jade and Indigo, cashback increased from 1.5% to 2%
- Card rewards blocked for six months if re-stacked before 1 June
- $50 upgrade fee removed until further notice
https://twitter.com/kris/status/1522204435858202624
Best Alternative to Crypto.com Card
If you are not interested in the CRO token and Cronos Ecosystem, but were using Crypto.com's debit card, then you may be interested in looking at some alternatives to Crypto.com which are currently more advantageous. We suggest 2 platforms that can easily compete with the current cashback rates offered on the market by various competitors:
- Binance Card (debit card): cashback that varies based on the number of BNBs staking. To give an example, with 1 BNB staked you have 2% on the cashback. with 10 BNB stakes, you have 3%. By clicking here, you will find all the cashback data
- Nexo Card (credit card): cashback ranging from 0.5% (with reward in Bitcoin) to 2% (reward in nexo). This card allows you to take out a loan with interest rates ranging from 0 to 13.9% to be able to spend money without actually selling your positions
Final Thoughts
We agree with the Crypto.com CEO's approach. High interest rates on staking and high cashback percentages are certainly attractive to users, but unfortunately they are also deleterious for the economics of coin CRO. These maneuvers, while quite unpopular, allow the CRO token to be less inflationary than in the past, reducing the selling pressure from those who immediately sold what earned from the staking or the cashback. Most likely, in the future the CRO coin will thank this event: if the company continues to work well and improve and increase the activity that takes place on the Cronos Ecosystem, then the future for CRO will be bright. 
Coinmarketcap: Graph of CRO-USD. Bear market since ATH of November 2021. Will reducing cashback and interest on staking help reverse the trend?