What is CroNodes (CRN): Crypto investing for casual users
The Cronos-based vehicle makes crypto investing simple. Does it cut the mustard?
- CroNodes: How it works
- An overview of passive income
- What is yield farming?
- What does CroNodes invest in?
CroNodes (CRN), which forked from the decentralised finance (DeFi) protocol Thor in January 2022, is an investment platform based on the Cronos blockchain. With a user-friendly platform and a flat 5% daily payout, CroNodes is targeted at the casual investor seeking modest passive rewards.
Underpinning the CroNodes platform is the CRN cryptocurrency, which was ranked as the 9,559th-largest project by market capitalisation. However, the token has recently been delisted from CoinMarketCap – a cause for concern.
In the following guide, we look under the hood of this new yield generator to find out what it’s all about. We have more details regarding CRN tokenomics and forecaster price targets over at our price prediction article. So what is CroNodes (CRN) and what is CroNodes coin used for? Let’s find out below!
CroNodes: How it works
How does CroNodes work? Its easy-to-use investment platform promises 5% returns in the form of a daily payout of one CRN coin (the platform’s native cryptocurrency) per ‘node’. The user generates one of these nodes by staking 20 CRN via a simple interface. A maximum of 100 nodes can be created per user, making for potential daily returns of 100 CRN.
In terms of dollar value, a representative trading price for CRN of $0.58 (as of 30 June 2022) places the barrier of entry to the investment platform at $16 and the investment cap at $58. The value of the token has been sourced from CoinGecko – CoinMarketCap has recently delisted the token.
When each node is generated with a 20 CRN stake, a total of 14 CRN is put to work across the investment portfolio to generate returns, while two CRN go to a CRN/CRO liquidity pool and four CRN go to the developers. An additional 10% tax is imposed when cashing out your rewards, which CroNodes’ whitepaper states is sent back to the rewards pool.
An overview of passive income
CroNodes is one of a plethora of platforms promising passive income on your digital assets. In fact, it could be argued that passive income is the promise that keeps many of the largest cryptocurrencies running.
Multi-billion-dollar digital currencies, including Cardano (ADA), Solana (SOL), Algorand (ALGO) and Tezos (XTZ), and other major proof-of-stake (PoS) blockchain platforms, rely on users staking a portion of their held coins to validation nodes – the computers that ensure a blockchain’s security. Without getting technical, the larger the volume of staked coins, the more secure the network, since users have more ‘skin in the game’.
To encourage staking, passive returns are distributed among stakers, typically sourced from block rewards and/or transaction fees. With the onset of Ethereum 2.0, which will see the second biggest crypto move away from a proof-of-work consensus, PoS-based passive income options are set to climb steeply.
The rise of decentralised exchanges (DEXs) brought further passive income possibilities. DEXs, such as Uniswap, SushiSwap and PancakeSwap, rely on user-generated liquidity pools to facilitate swaps. Once again, the promise of passive income is what keeps these pools topped up. Liquidity providers (LPs) on these platforms are typically rewarded through the transaction fees generated by each swap.
CroNodes presents a nascent form of passive income in the form of yield farming.
However, owing to a lack of transparency and rapid price descents, there are legitimate concerns that the project is a rug pull.
What is yield farming?
Since gaining popularity in 2020, yield farming has garnered a reputation as a high-risk endeavour, particularly because of the prevalence of fraud, rug pulls and market volatility.
Yield farming protocols such as the CroNodes’ cryptocurrency work by putting your digital assets to work across a portfolio of decentralised finance (DeFi) protocols selected by the platform’s owners – or through the governance system of a decentralised autonomous organisation (DAO).
The yield farming boom can be traced back to the launch of Compound Finance in June 2020. Compound Finance has since grown into a yield generator with more than $2.67bn in value put to work across 20 DeFi protocols, with annual percentage yield (APY) rewards ranging from 0.01% to 34%.
What does CroNodes invest in?
Until late February, CroNodes’ investment strategy was undisclosed. A whitepaper update on 23 February 2022 disclosed three ongoing investments – one in CRO Stake and two liquidity pool investments on Mad Meerkat Finance. The three investments, all on Cronos-based protocols, amount to $300,000 in ongoing investments.
Taking this investment amount at face value suggests that the CroNodes cryptocurrency is currently investing on behalf of approximately 612 individual nodes (70% of each node goes to the investment pool).
It is unclear whether this represents the entirety of CroNodes’ investment portfolio, but further investment proposals are regularly being fielded on the official Discord channel.
CroNodes’ roadmap outlines the implementation of a community voting system in Q2 2022, followed by improvements to the rewards system in Q3. As always, this article should be used as a neutral informational resource as opposed to financial advice. Always do your own research first, and never invest more than you can afford to lose.
Data sourced by Currency.com suggest that there are potentially one million CRN in circulation against a maximum supply of 20.45 million. More details on CRN’s tokenomics and price targets are available at our CroNodes price prediction feature.
The developers of CroNodes have remained anonymous.
Currency.com advises a complete due diligence exercise on CroNodes if you are considering an investment. The developers have chosen to remain anonymous and the platform’s investment strategy is not 100% clear. However, regular payouts can be observed from the token’s rewards address. Always invest with a cool head and never with more than you can afford to lose.