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 why the price of CRO has fallen is a blog post that Crypto.com Exchange published on Sunday, May 1.st, noting that they had reduced the rewards they offered on their lower-tier Visa cards. Crypto.com also said it had cut CRO staking rewards by more than half.
The exchange also added that starting June 1, its Midnight Blue card tier will not offer rewards to its customers, but other tiers like Icy White, Obsidian, and Ruby Steel will offer reduced rewards. Additionally, there will be a reward spending cap, where the highest reward amount will be locked at $50 per month.
Crypto.com, however, called it a “tough decision”, saying it had to be done due to the need for sustainability.
The reduced rewards earned the exchange a lot of criticism on social media, where users said they had fewer CRO staking options and less Visa card usage. Some have also threatened to switch to 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 reduced the interest rate on token deposits twice by notifying its users beforehand.
Despite the challenges, the Crypto.com exchange still seems to be growing day by day with over 10 million users on top of being the official sponsor of the 2022 FIFA World Cup.
Reduced crypto lending activities
The recent move by Crypto.com paints a picture of a vast problem in crypto lending due to rising US interest rates, high inflation, high yields and weak market performance becoming unsustainable. An increase in crypto adoption leads to more account holders, making large payments impossible.
However, this problem has mainly been seen in the majority of DeFi lending platforms where they are forced to lower interest rates as the user counts and deposits continue to grow. Crypto lending platforms could also follow suit as the adoption rate increases.