Stargate DAO’s latest proposal aims to boost cross-chain connectivity but community members question whether a token burn is the better path forward.
Stargate DAO and Cronos announced earlier today the opening of voting for a proposal to enable seamless transfer of ETH and USDC between Cronos zkEVM and other supported chains via Stargate, the fully composable liquidity transport protocol.
Upon community approval, the Stargate ETH and USDC pools will be deployed on Cronos zkEVM, and will be initially funded by Cronos Labs, in a move to boost cross-chain connectivity.
What is Proposed:
The governance proposal to establish ETH and USDC liquidity pools on Cronos zkEVM, a layer 2 blockchain launched by Cronos to enable faster and cheaper transactions.
To allow Stargate to focus on core infrastructure, Cronos Labs will fund the pools with atleast $1 million each in ETH and USDC for at least twelve months, which can be increased based on user demand.
Stargate’s cross-chain technology via these crypto pools will enable seamless asset transfers between Cronos zkEVM and other supported blockchains, providing more options for developers and users.
Further due to the layer 2 design of Cronos zkEVM , holders of ETH and USDC can withdraw their assets at any time from the Cronos zkEVM network, including by signing transactions on the layer 1 network itself (Ethereum)
Why this could be important:
Cronos users can also move assets between chains without high fees or delays, attracting more users and developers to the ecosystem. This could mean higher transaction volumes.
In a statement advocating for the vote, Stargate said “ [this]…also seeks to encourage the vibrant ecosystem of dapp developers of Cronos chains to leverage the underlying Stargate technology (especially Hydra tokens) for their cross-chain use cases, even for user experiences not supported by the Stargate front end.”
Further, the $2 million liquidity injection provides immediate access to ETH and USDC, ensuring that users can bridge assets without facing liquidity shortages.
Community Reactions:
Despite the potential benefits, many community members have voiced concerns due to the recent trend of key partnerships and updates not transitioning into prince action for CRO. Some believe that instead of funding new pools, Cronos should focus on a token burn:
