Cosmos Hub Approves The ATOM Inflation Reduction For Increased Security

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Cosmos Hub

A proposal to lower the highest possible inflation rate of Cosmos Hub’s native currency, Cosmos ATOM symbols down $8.90, from 14% to 10% has been approved by the organization’s governing council.

The approved change, as proposed, would cause ATOM’s annualized staking yield to drop from around 19% to about 13.4%. Within the Cosmos system, a network of connected blockchains, the Cosmos Hub is the main blockchain. The ATOM token handles transaction fees, governance, and staking. Voters barely approved the initiative, with 41.1% voting in favor and 38.5% voting against. It was predicted to fail shortly before the deadline, but a late surge of votes and a few reversals from validators just barely swung the balance in favor.

The Proposal Claims That Cosmos Hub Overspent On Security Due To ATOM’s High Inflation

Furthermore, it contended that validators might still turn a profit or break even with inflation as low as 10%. The group that supported the proposal with the most votes, Zero Knowledge Validator, provided an explanation for their support of X (previously Twitter). According to a post, “Double-digit inflation discourages the use of ATOM in DeFi and other areas within the Atom Economic Zone, undermines Atom price in the long run, and is unnecessary for security.” A validator named AllNodes cast the largest opposition vote, outlining its disagreement in a post on X.

The plan was described as “a snappy, ill-considered, and unplanned concept that might cause chaos for retailers and others involved in creating, trading, and verifying Atom” by AllNodes, who claimed that the move might have a detrimental effect on tiny validators. Users may now unstake ATOM money and avoid the prior 21-day unbonding time thanks to a recent update from Cosmos Hub that launched a liquid staking module. Prior to the update, holders of ATOM had a 21-day window during which they could transfer their money after unstaking the digital currency.