Stride

Zero

Cosmos

Neutron

<ul class="list-ic vertical"> 
 <li> <span>1</span> <a>Cosmos Hub has approved a proposal targeting the reduction of its native cryptocurrency, ATOM’s maximum inflation rate.</a> </li> 
 <li> <span>2</span> <a>This adjustment will also translate into a decrease in the Annual Percentage Rate (APR) for staking.</a> </li> 
</ul> 
<p>The recent decision by the Cosmos Hub to approve a pivotal proposal targeting the reduction of its native cryptocurrency, ATOM’s maximum inflation rate, is a significant development in the ongoing evolution of the Cosmos network.&nbsp;</p> 
<p>The approved proposal seeks to make a key adjustment by reducing the maximum inflation parameter from 20% to 10%, a move that will have a tangible impact on ATOM’s current inflation rate, which is approximately 14%.&nbsp;</p> 
<p>This adjustment will also translate into a decrease in the Annual Percentage Rate (APR) for staking, lowering it from around 19% to approximately 13.4%.</p> 
<p>The decision came after a closely contested vote, with the proposal securing a 41.1% approval, narrowly exceeding the 38.5% opposition. This outcome was not without its share of drama, as a last-minute surge in votes and the reversal of stances by some validators played a crucial role in tipping the balance in favor of the proposal.</p> 
<p>The primary motivation behind this adjustment lies in the ongoing community discussions about fine-tuning ATOM’s inflation schedule. The current dynamic inflation model, ranging from 7% to 20% and tied to the bonded or staked ratio of ATOMs, has raised concerns related to the sustainability and predictability of ATOM’s future supply.&nbsp;</p> 
<p>By addressing these concerns, the proposal aims to create a more stable and balanced ecosystem for ATOM.</p> 
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  <img loading="lazy" decoding="async" width="1475" height="427" src="https://www.thecoinrepublic.com/wp-content/uploads/2023/11/image-594.png" alt="Cosmos Hub Approves Proposal for Capping ATOM Inflation Rate to 10%" class="wp-image-182129" srcset="https://www.thecoinrepublic.com/wp-content/uploads/2023/11/image-594.png 1475w, https://www.thecoinrepublic.com/wp-content/uploads/2023/11/image-594-300x87.png 300w, https://www.thecoinrepublic.com/wp-content/uploads/2023/11/image-594-1024x296.png 1024w, https://www.thecoinrepublic.com/wp-content/uploads/2023/11/image-594-768x222.png 768w, https://www.thecoinrepublic.com/wp-content/uploads/2023/11/image-594-750x217.png 750w, https://www.thecoinrepublic.com/wp-content/uploads/2023/11/image-594-1140x330.png 1140w" sizes="(max-width: 1475px) 100vw, 1475px">
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   Source – Mintscan
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<p>Beyond its implications for ATOM, the adjustment holds significance for the Atom Economic Zone (AEZ) and the burgeoning decentralized finance (DeFi) ecosystem on the Cosmos network.&nbsp;</p> 
<p>The reduction in ATOM’s inflation rate is strategically aligned with the network’s goals of enhancing the value proposition of ATOM as a security provider for consumer chains within the Cosmos Hub.&nbsp;</p> 
<p>This is particularly crucial as the AEZ expands, with projects like Neutron and Stride gaining momentum and contributing to the overall growth of the Cosmos network.</p> 
<h2 class="wp-block-heading" id="strong-voters-validators-reacts-on-cosmos-hub-approval-strong"><strong>Voters/Validators Reacts on Cosmos Hub Approval&nbsp;</strong></h2> 
<p>Zero Knowledge Validator, a prominent supporter of the proposal, highlighted the rationale behind its stance on X, stating, “Double-digit inflation is not necessary for security, weakens Atom price long term, and disincentivizes the use of ATOM in DeFi and elsewhere in the Atom Economic Zone.”&nbsp;</p> 
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   <p lang="en" dir="ltr">We voted YES on <a href="https://twitter.com/cosmos?ref_src=twsrc%5Etfw">@cosmos</a> Hub Prop 848<br>—-<br><br>This seems to be a controversial proposal, but in our view, it shouldn't be!<br><br>The Cosmos ecosystem is maturing, and inflation economics need to mature too. <br><br>Double digit inflation is not necessary for security, weakens ATOM price long…</p>— Zero Knowledge Validator (@ZKValidator) <a href="https://twitter.com/ZKValidator/status/1725476238297268609?ref_src=twsrc%5Etfw">November 17, 2023</a>
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<p>The perspective underscores the belief that a more moderate inflation rate will contribute to the long-term stability and attractiveness of ATOM as an investment.</p> 
<p>However, the proposal faced significant opposition from validator AllNodes, which expressed concerns about potential harm to small validators. AllNodes labeled the proposal as “an abrupt, short-sighted, and ill-researched idea that might wreak havoc on retail and businesses engaged in building, trading, and validating Atom.”&nbsp;</p> 
<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter">
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   <p lang="en" dir="ltr">We voted NO on <a href="https://twitter.com/search?q=%24ATOM&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$ATOM</a> prop #848 not only because it overlooks the importance of small validators and could centralize the ecosystem. Lowering inflation isn't a way to boost token value. Quick, untested changes could harm network integrity. <br><br>Long read with reasoning<img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f447.png" alt="👇" class="wp-smiley" style="height: 1em; max-height: 1em;"> 1/3</p>— Allnodes (@Allnodes) <a href="https://twitter.com/Allnodes/status/1726222965258551684?ref_src=twsrc%5Etfw">November 19, 2023</a>
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<p>In addition, the founder of Cosmos, Jae Kwon, also went on to post on X his disagreement with the recent development in the ATOM production reduction plan. Kwon is reportedly planning to fork Cosmoshub4 and could dub the new project AtomOne. The said project would have its own plan along with the same team and achieve more decentralization.&nbsp;</p> 
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   <p lang="en" dir="ltr">Now listen up Cosmonauts. Despite our voting NWV #848 has ended up passing, something that isn't too surprising (though it would be good to know whether the later votes came from newly purchased atoms) <a href="https://twitter.com/cosmos?ref_src=twsrc%5Etfw">@cosmos</a> <a href="https://twitter.com/Allinbits_inc?ref_src=twsrc%5Etfw">@Allinbits_inc</a> <a href="https://twitter.com/hashtag/raptureparty?src=hash&amp;ref_src=twsrc%5Etfw">#raptureparty</a> <a href="https://twitter.com/hashtag/atomone?src=hash&amp;ref_src=twsrc%5Etfw">#atomone</a><br><br>Now let's coordinate a split.</p>— antechristus #343 (@jaekwon) <a href="https://twitter.com/jaekwon/status/1728531795472527416?ref_src=twsrc%5Etfw">November 25, 2023</a>
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<p>The opposition highlights the challenges of finding a consensus in a decentralized network where different stakeholders may have conflicting interests and perspectives.</p> 
<p>In conclusion, the Cosmos Hub’s decision to adjust ATOM’s maximum inflation rate is a crucial step in addressing the evolving needs and concerns of its community. As the <a href="https://www.thecoinrepublic.com/2023/10/22/cosmos-price-prediction-atom-back-in-the-game-whats-next/" target="_blank" rel="noreferrer noopener">Cosmos</a> network continues to evolve, finding the right balance between stability, security, and inclusivity will remain an ongoing challenge.</p>

Cosmos Hub Approves Proposal for Capping ATOM Inflation Rate to 10%

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