The Cosmos Hub Approves Proposal to Reduce ATOM Inflation
The Cosmos Hub community has approved a proposal to decrease the maximum inflation rate of its native token, Cosmos (ATOM), from 14% to 10%. The objective is to lower the annual interest rate for stakers, aiming to increase long-term profitability and facilitate price growth in ATOM.
This proposal received 41.1% support and narrowly passed with 38.5% of votes against it, making it the highest-ever turnout vote in the Cosmos ecosystem. The approved change will bring Atom’s annualized staking yield from approximately 19% to about 13.4%.
The proposal states that the Cosmos Hub has experienced excessive security spending due to ATOM’s high inflation rate. By reducing inflation, validators can still achieve breakeven or profitable outcomes.
Concerns and Support for the Proposal
The proposal received substantial support from Zero Knowledge Validator but faced opposition from validator AllNodes. Concerns were raised that reducing inflation could adversely affect small validators and potentially centralize the ecosystem without improving token value. Hasty adjustments could compromise network integrity.
The Cosmos (ATOM) Evolution
The Cosmos (ATOM) network has undergone significant developments in recent years. In September 2022, a new white paper proposed expansions for the Cosmos Hub and changes to the utility and issuance schedule of ATOM.
Last September, Cosmos Hub introduced a liquid staking module, allowing users to bypass the previous 21-day unbonding period associated with unstaking ATOM funds. This upgrade enables staked ATOM to be used in the Cosmos decentralized finance ecosystem without impacting staking yields.
At press time, the price of ATOM is around $9.46, reflecting a 34% increase this month.
Hot Take: ATOM’s Future Prospects
With the approval of the ATOM halving proposal, the Cosmos community anticipates higher profitability and potential appreciation of the token’s price in the long term. This reduction in inflation is expected to benefit stakers and contribute to the overall growth of ATOM.
By
By
By
By
By