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Cosmos founder Decides to Fork Cosmos Hub In Protest Against ATOM’s Reduced Production – Crypto News

Published

2 years ago

November 27, 2023

Dripp

Cosmos founder Jae Kwon has expressed his dissent against the ATOM production reduction vote, which, despite his opposition, was successful. In response, Kwon has announced plans to fork Cosmoshub4, unveiling a new network named AtomOne.

The upcoming network is set to operate autonomously, featuring its own governance plan and development team, with a focus on achieving increased decentralization.

Cosmos Votes to Reduce Infaltions, Drops Staking Yield

The governing body of the Cosmos Hub has given approval to a proposal aimed at reducing the maximum inflation rate of its native token, Cosmos (ATOM), from 14% to 10%. This decision comes in response to concerns about the high inflation rate and its potential impact on network security and token prices.

Additionally, the proposed adjustment would lead to a decrease in ATOM’s annualized staking yield from around 19% to approximately 13.4%. ATOM tokens play crucial roles in staking, governance, and covering transaction fees within the Cosmos network. The proposal faced a close vote, with 41.1% in favor and 38.5% against.

Critics of the proposal also argued that the change might adversely affect small validators and deemed it “an abrupt, short-sighted, and ill-researched idea” that could disrupt retail and businesses involved in building, trading, and validating ATOM.

Notably, the Cosmos Hub recently underwent an upgrade introducing a liquid staking module, allowing users to bypass the previous 21-day unbonding period when unstaking ATOM tokens. This enhancement further provides greater flexibility to ATOM holders, enabling the use of staked tokens in the Cosmos decentralized finance ecosystem without compromising staking rewards.