- The approved change will reportedly cut ATOM’s annualized stake income to about 13%.
- Voters barely approved the initiative, with 41.1% voting in favor and 38.5% voting against.
A proposal to reduce the maximum inflation rate of Cosmos (ATOM), the native token of Cosmos Hub, from 14% to 10% has been approved by the governing council.
The approved change will reportedly cut ATOM’s annualized stake income from around 19% to about 13%. The Cosmos Hub is the key blockchain of the Cosmos network, a collection of interconnected blockchains. The ATOM token is used on the network for staking, voting, and fees.
Boosting Security
Voters barely approved the initiative, with 41.1% voting in favor and 38.5% voting against. It seemed like it was going to fail just before the deadline, but a rush of votes and some changes of sentiment from validators swung it in its favor.
The suggestion argued that ATOM’s increased inflation rate led to the Cosmos Hub overpaying on security. The report said that validators might still make a profit if inflation was lowered to 10%. The proposal’s biggest supporter, Zero Knowledge Validator, explained why it supported it on Twitter.
The post mentioned:
“Double-digit inflation is unnecessary for security, undermines Atom price in the long run, and discourages the use of ATOM in DeFi and other areas within the Atom Economic Zone.”
Staking an ATOM token resulted in a 21-day lock on the token’s value before the upgrade. However, by unstaking ATOM funds, users may now avoid the 21-day unbonding time introduced with a recent update.
Moreover, staking profits won’t be affected while using staked ATOM in the Cosmos decentralized financial ecosystem thanks to the new module.
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