Cronos (CRO) has become one of the worst-performing cryptos, trading at $0.310417, down 12.86% in the last 24 hours.
One of the main reasons for the price of CRO to drop token is a blog post that Crypto.com exchange published on Sunday, May 1st, noting that they had reduced the rewards they were offering on their lower-tiers Visa cards. Crypto.com also said that it had reduced the CRO staking rewards by more than a half.
The exchange also added that from 1st June its Midnight Blue card tier will not be offering rewards to its customers but other tiers like Icy White, Obsidian and Ruby steel will offer reduced rewards. In addition, there will be a reward spending cap, where the highest amount of the reward will be locked at $50 per month.
Crypto.com, however, termed this a “difficult decision” saying that it had to be done because of the need for sustainability.
The slashing of the rewards earned the exchange a lot of criticism on social media where users stated that they were given fewer CRO staking options and less use of the Visa cards. Some also threatened to opt for other crypto card operators like Coinbase and Binance.
However, this is not the first incentive cut the exchange has made this year. In March, it cut the interest rate on token deposits twice giving prior notice to its users.
Despite the challenges, the Crypto.com exchange still seems to be growing by the day with over 10 million users besides the fact that it will be the official sponsor of the FIFA World Cup 2022.
Reduced crypto Lending activities
Crypto.com’s recent move portrays a broad issue in crypto lending due to the rising U.S interest rate, high inflation, high returns, and weak market performance which are becoming unsustainable. An increase in crypto adoption leads to more account holders which makes big payouts unachievable.
However, this issue has been mostly experienced in the majority of the DeFi lending platforms where they are forced to lower the interest rates as the user counts and deposits continue to grow. Crypto lending platforms could also follow suit as the adoption rate increase.