The plan was approved by a razor-thin margin of 41.1% to 38.5%.
Cosmos Hub’s board of directors has approved a plan to lower the maximum inflation rate of the Cosmos ATOM token from 14% to 10%.
The allowed amendment would lower ATOM’s annualized staking return from almost 19% to about 13.4%, as stated in the proposal. The ATOM coin serves as a medium of exchange for fees, governance, and staking.
The plan was approved by a razor-thin margin of 41.1% to 38.5%. It was predicted to fail just before the deadline, but a surge of votes at the last minute and a few reversals from validators made the difference.
According to the suggestion, the Cosmos Hub spend too much on security because of ATOM’s high inflation rate. It went on to say that even with inflation down to 10%, validators may still make a profit.
The entity that received the most votes in support of the proposal—Zero Knowledge Validator—explained its support by referring to X, which was formerly Twitter. The use of ATOM in DeFi and other areas within the Atom Economic Zone is discouraged, double-digit inflation undermines the long-term price of atoms, and is superfluous for security purposes, according to one post.
The most notable dissenting vote was made by validator AllNodes, who detailed its dissent in an X post. AllNodes contended that the alteration might have an adverse effect on smaller validators, characterizing the proposition as “an abrupt, arrogant, and unsubstantiated notion that could disrupt the operations of retail and enterprises involved in the construction, trading, and validation of Atom.”
Users may now unstake ATOM money and avoid the prior 21-day unbonding time thanks to a new liquid staking module that was just launched on Cosmos Hub. Prior to the update, ATOM holders may only transfer their cash within 21 days after unstaking the token. The latest module allows users to stake ATOM in the Cosmos decentralized financial ecosystem while maintaining their staking rewards.
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