$CRO Token is a widely known, noteworthy cryptocurrency that can be considered a utility token, medium of exchange, or store of value for investors to consider to add it in their portfolio.
The value proposition of $CRO is multi-dimensional. It is backed by Crypto.com App & Exchange, Crypto.org Chain, and Cronos Chain. Crypto.com has centralized applications built-in, Crypto.org Chain is the payment layer of $CRO, and Cronos Chain is the EVM compatible layer one smart contract protocol platform powered by $CRO Token. All of these platforms & protocols create demand on their specific terms.
You will be familiar with some parameters of what gives the $CRO its valuation at the end of this article. Hence, you can derive your assessment when the values of these variables change in the future.
Max supply of $CRO tokens is 30,263,013,692, meaning there will never be more $CRO tokens than this amount. For reference, if everybody wanted a $CRO token for themselves, the average token owned per person couldn’t get past four tokens as the world population approximates 8 billion. 4 $CRO equates to 60 cents at the moment.
Circulating supply of $CRO tokens is around 25 billion. The market conditions and the pricing of $CRO is currently set as this supply is restrained from being exchanged in free markets, and there are five more billion tokens to be released to the market over time that currently have no direct impact on the current market conditions(assuming the tokens released in the future hasn’t been priced in by traders already).
The last week’s volume is $343 million, and the monthly volume is $1,671 million. Weekly volume averages $49 million per day, while monthly volume averages $55 million per day. The volume trend is going downwards as we can see the average daily price of the last week is lower than the average everyday price of the month. When it is the opposite, the trend is upward, and demand increases.
It can be seen how much $CRO is being held in which wallets from CronoScan. The top wallet has approximately 6% of all tokens, a bridge contract to migrate $CRO tokens to $WCRO tokens from Crypto.org Chain to Cronos Chain. The top 10 addresses hold 2% of all $CRO tokens when this contract token is excluded.
Compared to Ethereum, by the information provided at EtherScan, the data is interesting. The top wallet of ETH holds 10% of all Ethereum, and the top second wallet has approximately 8%; the first contract is being ETH2 deposit contract and the second one is $WETH bridge tokens. When these two contracts are excluded(they are not entities rather than contracts) that hold the most ETH tokens, the top ten after these hold 9% of all $CRO tokens. Most of the wallets that have the most Ethereum are centralized exchanges.
When the decentralization is being measured by the proportion of the tokens distributed to the singular wallets, Cronos Chain is more decentralized than Ethereum, according to data derived from both CronoScan and EthScan alike.
People who consider decentralization the primary feature of smart contract platforms may think of Cronos as an alternative to Ethereum.
$CRO Demand created by Crypto.com
Crypto.com is the first environment that offered utility resulting in market demand for the $CRO tokens. Let’s take a look.
When Crypto.com users stake $CRO, the platform’s trading fees go down to the amount of $CRO staked inside of Crypto.com Exchange. For reference, someone who doesn’t stake any $CRO pays a 0.4% fee for each trade they make on Crypto.com Exchange. If they were to stake 5,000 $CRO, this would lower the trading fee to 0.36%—a 10% discount. If you were to stake 10,000 $CRO, you would get a 20% discount. The higher the stake goes, the discount rate increment changes, but they don’t always go linear. The detailed discount rates list can be found at this link.
As a result, the more people started to use Crypto.com Exchange to make crypto trades, the more people would want to buy and stake $CRO tokens to save on trading fees, creating a demand for $CRO tokens.
Users can only use $CRO to make NFT purchases from Crypto.com’s Official NFT Marketplace. When the demand rises for Crypto.com NFTs and overall NFT markets, it also rises for $CRO. This demand can be measurable by tracking the volume traded in the Crypto.com NFT Marketplace because the volume traded is also the amount of $CRO traded there, where that $CRO has to be purchased from the market before making a trade in the NFT market of Crypto.com.
You can check the weekly and monthly volumes of Crypto.com/NFT here by adding the volume traded of the top 15 collections. In fact, I already did it for you: it is $917 million for the past week and $9,721 million, almost $10 billion, for the past month.
Crypto.com/NFT created $10 billion worth of demand for the $CRO in the past month. You got the idea. You can do this for the next weeks and months to assess the demand for the $CRO created by its native NFT market.
The amount of $CRO staked, meaning locking your CRO tokens for the six months, you can earn more by staking other tokens in your wallet. Creates demand for CRO because people who want to use Crypto.com Earn for a high amount of USDC would like that additional 2%.
For example, if you were to use Earn for 10,000 USDC, you would get 6% per annual, resulting in 600 USDC in earnings. On top of that, if you were to stake an additional $4,000 worth of $CRO, you would have gotten 8% per annual for your USDC stake, resulting in 800 USDC. This may not make much sense for 10,000 USDC but using Earn with $100,000 on top of $4,000 worth of CRO tokens staking, you would have an additional $2,000 USDC per annual with the additional possibility that the $CRO tokens you staked may go up in value. They may also go down. That is the risk you are taking. However, since you will be earning $2,000 additional income because of that stake, you are hedged against $CRO tokens’ capitulation of 50%, meaning if the $CRO tokens go down, you are safe until they go to the half-price you have purchased them—pretty good odds.
A user can use Earn for other cryptocurrencies like Bitcoin, Ethereum, and dozens of others with different annual earnings rates. The full list can be found at this link. We sampled USDC for simplicity.
What does this mean for demand? Crypto.com Earn program requires $CRO tokens to be staked for six months, which temporarily wipes out the amount of staked tokens from the circulating supply, diminishing the amount of $CRO that can be sold in the markets for a time—creating price pressure upwards if all other variables remain constant.
Conclusion and Summary
There are many ways that the $CRO token has a demand, and it is hard to cover them all in a single article. We have examined the demand affected by the tokenomics of $CRO and some services Crypto.com Exchange & Crypto.com App offers.
The next article will cover how Cronos Chain and psychological factors coming from the marketing efforts of Crypto.com creates demand for $CRO tokens.
Knowing the parameters that affect an asset’s value is a competitive advantage for the given investor who understands and pays attention to them. So they can evaluate the direction of the market and their exposure to it on the go as market dynamics change.