The Cosmos (ATOM) hub community voted against reducing inflation of the ecosystem’s native token to 10%, but founder Jae Kwon didn’t like the idea and he posted on X (formery Twitter)
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) @cosmos @Allinbits_inc #raptureparty #atomone
Now let’s coordinate a split.
— antechristus #343 (@jaekwon) November 25, 2023
The reason why Cosmos community did not support the initiative is to reduce inflation in the ecosystem’s native token, ATOM. According to the voting results, 48.6% voted against the proposal. 25% of validators supported it, and 25.9% abstained.
According to the experts, the reduction in inflation should have optimized the fresh issue of the asset. However, concerns about such a move have won out. Many community members were worried about the security of the blockchain.
The price of ATOM reacted to the outcome of the vote by decreasing. According to CoinGecko , the token rate fell by 5.1% to $8.89.
In response to a proposal to reduce inflation in the ATOM token, project creator Jae Kwon called for a hard fork of the network. Against the backdrop of the news, the price of the ATOM token immediately decreased by 4%.
What was the Proposal?
Proposition 848, voted on by the community, aims to reduce inflation from 14% to 10%. According to participants, this will reduce the annual interest rate on staking from 19% to 13.4%.
The initiative also highlights that double-digit inflation in ATOM has resulted in the community overpaying for security. In addition, it does not in any way stimulate the use of the asset in the decentralized finance (DeFi) sector, the authors of the proposal noted.
Results and Hard Fork
41% of community members voted in support, and 31.9% were against. The project’s founder was among those who did not approve of the initiative. In response to all this, he called on everyone who did not support the proposal to join the network’s hard fork.
Results of voting on proposal #848
“We’ll just fork ‘cosmoshub4’ so it will be the current software, but we’ll have our own plan and development teams (more decentralized than Gaia) to manage the transition to a minimal end product. Everyone who voted against is invited,” he wrote.
Kwon called the hard fork AtomOne. According to him, the new network will support two tokens : ATOM and ATOM1.
Largest Airdrop
Joe Galt, head of strategy at Stride Zone, noted that the potential hard fork would bode well for ATOM holders.
Moreover, he noted that the event will lead to the largest airdrop ever. This will increase the trading volume of both the project’s native tokens and ATOM1.
“We named the new chain AtomOne (ATOM1). The majority of the ATOM1 distribution will go to ATOM stakers in proportion to their number,” Galt wrote.
Cosmos (ATOM) Price Today
Amid the news, the price of the token fell by more than 4%. ATOM is currently trading at $9.22, down 2.6% over the past 24 hours, according to CoinGecko.
The coin’s capitalization stands at $3.5 billion, and the daily trading volume exceeded $142 million.
Over the course of two weeks, the price of ATOM has been showing negative dynamics. So, in 14 days the rate dropped by 10.7%. At the same time, over the month the price of the asset increased by a total of 30.6%.
