Cosmos Hub's governing body has endorsed a proposal to lower the maximum inflation rate of its native token, ATOM (ATOM), from approximately 14% to 10%.
According to him proposal, the authorized modification would reduce Atom's annualized staking yield from around 19% to approximately 13.4%. Cosmos Hub is the main blockchain within the Cosmos network, a system of interconnected blockchains. Hub's native token is Atom, which is used for staking, governance, and transaction fees.
The proposal met with narrow approval, garnering 41.1% approval votes to 38.5% disapproval, marking the largest share in the Cosmos ecosystem. It was initially expected to fail shortly before the deadline, but a last-minute influx of votes and some validator revocations narrowly tipped the result in favor.
The proposal argued that Atom's high inflation rate, compared to similar tokens, resulted in Cosmos Hub spending too much on security. He also argued that validators could still achieve breakeven or profitability even with inflation reduced to 10%.
Zero Knowledge Validator, the entity with the highest vote in favor of the proposal, justified its support for X. A publication he claimedโDouble-digit inflation is unnecessary for security, undermines the price of Atom in the long term, and discourages the use of ATOM in DeFi and other areas within the Atom Economic Zone.โ
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The most significant opposition vote was cast by AllNodes, a validator, as border in a post on construction, commerce and sales". and validate Atom.โ
Cosmos Hub recently updated to launch a liquid staking module, allowing users to bypass the previous 21-day unlinking period when withdrawing ATOM funds. Prior to the upgrade, ATOM holders had a 21-day lock-up period to move their funds after withdrawing the token. With the new module, Staked ATOM can be used in the Cosmos decentralized finance (DeFi) ecosystem without compromising staking returns.
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