The Cosmos Hub Community Votes on ATOM’s Minimum Inflation
The Cosmos Hub ecosystem community is currently voting on a proposal to establish the minimum inflation rate for the ATOM token at 0%. The voting period started on January 9th and will conclude on January 23rd. As of now, approximately 95% of community members are in favor of setting the inflation rate to zero. Only 4.4% opposed inflation, while a mere 0.1% exercised their veto power.
Preserving the Value of ATOM
By setting the minimum inflation rate to 0%, the community aims to protect the value of the ATOM cryptocurrency, which has faced downward pressure due to selling. Additionally, this decision seeks to address concerns about overpayments for security compared to other blockchains, which have negatively impacted ATOM rewards.
Previous Inflation Levels and Staking Yield
In November 2023, the Cosmos network voted for a maximum inflation level for the ATOM token, capping it at 10% per year. This decision aims to preserve the value of the token, although it may impact staking profitability. Previously, the inflation rate was as high as 20%. As a result of this update, the Cosmos staking yield decreased from 19% to 13.4%. Despite the decline in revenue, the majority of validators managed to break even or even earn profits. Validators also have the option to increase transaction processing fees to cover their expenses.
Hot Take: Community Support for Inflation-Free ATOM
The Cosmos Hub community is overwhelmingly supporting the proposal to establish a minimum inflation rate of 0% for the ATOM token. With almost 95% of community members voting in favor, it is evident that preserving the value of ATOM and addressing concerns about overpayments are top priorities. While this decision may impact staking profitability, it aims to create a more sustainable ecosystem for ATOM and its stakeholders. The outcome of this vote will shape the future of ATOM’s inflation dynamics and contribute to its long-term success.
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