The Cosmos Community Votes to Slash Inflation on ATOM Token
The Cosmos community recently voted to reduce the inflation rate on the Cosmos Hub’s native token, ATOM, from around 14% to a maximum of 10%. This move was supported by 41.1% of the network’s voting power and aims to lower ATOM’s annual percentage rate (APR) from approximately 19% to 13.4%. Advocates of the proposal argued that the previous inflation rate was higher than necessary for network security and that validators could still maintain profitability at a 10% inflation rate by increasing their commission rates.
Founder Jae Kwon Calls for a Hard Fork
However, this decision has led to a rift in the Cosmos community, causing the price of ATOM to drop by 4% in the past day. In response, founder Jae Kwon has called for a hard fork of the cryptocurrency. Kwon suggests forking a new network called AtomOne from Cosmos with a new token called ATOM1. This proposed network would support both ATOM and ATOM1 tokens.
Airdrop and Genesis Distribution
If the hard fork takes place, 10% of the genesis supply of ATOM1 will be premined for various purposes. The remaining 90% of token supply will be distributed through an airdrop judged by Alignment based on voting activity to those who opposed proposal 848. The new fork will retain much of the existing Gaia architecture used by Cosmos Hub but with a higher maximum inflation rate of 20%. It will also introduce an altered governance mechanism that requires proposals to achieve a two-thirds threshold to achieve quorum.
Hot Take: The Future of Cosmos Hangs in the Balance
The recent vote and subsequent call for a hard fork by Jae Kwon have brought the future of Cosmos into question. The division within the community has caused a decline in the price of ATOM, highlighting the uncertainty surrounding the network’s direction. While proponents of the reduced inflation rate argue for improved network security and profitability for validators, others believe a higher inflation rate is necessary. As the Cosmos community navigates this disagreement, it remains to be seen how the hard fork proposal will unfold and what impact it will have on the overall ecosystem.
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