Atom Fork & 10% Inflation Rate Cap

Everything That You Need to Know

The Launchy Team
November 30, 2023

📢 Sponsor | 💡 Telegram | 📰 Past Editions

Atom Fork & 10% Inflation Rate Cap
Everything That You Need to Know

ATOM voted to reduce its annual inflation rate to 10%.
41.1% of voters approved the proposal, 31.9% voted no, and 20.4% abstained.
Nearly all 180 validators are break-even or profitable at 10% max inflation off of commission alone
Jae Kwon, one of ATOM’s original founders, is displeased with the decision and called for a fork.
An Atom1 token would power the new blockchain network. However, Kwon suggested that the old ATOM token could still be integrated into the new network.

On 26 November, the vote on a proposal that seeks to reduce the ATOM inflation rate from ~14% to 10% ended.

It resulted in 41.1% of voters approving the proposal and 31.9% voted no.

Less than an hour after the vote ended, Cosmos’s founder Jae Kwon revealed his displeasure at the outcome and called in a tweet for a hard fork of its native token ATOM while showing suspicion that the later votes came from newly purchased ATOMs.

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)
9:51 PM • Nov 25, 2023

ATOM is the native coin of Cosmos Hub, a blockchain acting as an intermediary among all independent blockchains created within the Cosmos network.

Here is the summary of everything you need to know about proposal #848 and the hard fork plan:

Proposal #848: ATOM Halving

This proposal seeks to reduce the ATOM inflation rate from ~14% to 10%, bringing its Staking APR from ~19% to ~13.4%.
This will be the first of three proposals being voted on to reduce inflation, provide better incentives for staking, and improve the security of the network.
Blockworks Research found that ATOM is overpaying for security and transitioning to a set supply schedule was suggested.
Nearly all 180 validators are break-even or profitable at 10% max inflation off of commission alone, and validators have the option to increase their commission rate to help cover operational expenses.
41.1% of voters approved the proposal, 31.9% voted no, and 20.4% abstained.
This decision comes with the highest turnout in Cosmos Hub history: 73.4% or 40% quorum.

Jae Kwon, despite contributing to Cosmos' growth, is deviating from its decentralization principles. He called for the community to “coordinate a split” and plans to create a new network, AtomOne, by forking Cosmoshub4.

Jae Kwon’s Hard Fork Plan: AtomOne $ATOM1 / $ATMO

GitHub

Jae Kwon implicitly stated that the outcome of the vote cleared the way for Cosmo's self-destruction.
Kwon's Github document outlines AtomOne as an alternative network aimed at enabling the Cosmos community to navigate divergent views on mission, tokenomics, and security philosophy.
AtomOne would be “equipped to handle contingencies and embody a bastion for diverse political thought”
AtomOne, as outlined in the document, aims to be a minimal fork of Gaia (Cosmoshub4), operating alongside it to prepare for contingencies.
It serves as a political party base in relation to Gaia, seeking to complement the Cosmos ecosystem with innovative solutions.
The overarching goal is to set a new precedent for adaptive self-organization in the Cosmos multichain multi-token universe.
An Atom1 token would power the new blockchain network. However, Kwon suggested that the old ATOM token could still be integrated into the new network.

Kwon's plan has drawn criticism from community members who argue that it goes against the principles of governance and democracy within the Cosmos ecosystem:

Huginn Tech founder Rua questioned whether Kwon would persist in chain splits if faced with similar challenges after attracting significant players to the ecosystem.

Rua advised Kwon to stay and contribute positively to the network rather than opting for further splits.

@cosmos@Allinbits_inc Theoretically, once your split chain/ecosystem reaches same heights and attracts bigger players, you'll be faced with same dilemmas.
What will you do then? Split again?
Why not stick around and try to do some much needed good here, which I know you are more than capable of?
— Rua (@Rhuax)
9:54 PM • Nov 25, 2023

@cosmonaut_joon, a core contributor to MilkyWay, stated that “accepting the results of a voting process whether one was against it or not is part of governance/democracy”

@cosmos@Allinbits_inc Please don’t do this Jae. Accepting the results of a voting process whether one was against it or not is part of governance / democracy
Yes people do immigrate after an unfavourable outcome but true citizens stay and try to make the most of it
— Joon (@cosmonaut_joon)
1:24 AM • Nov 26, 2023

The creation of AtomOne poses risks for ATOM, leading users to abandon Cosmos for the new chain.

After the proposal passed, ATOM’s price was increasing 7.61%. Right now ATOM is trading at $9.31, almost back to the pre-drama level.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.

Atom Fork & 10% Inflation Rate Cap

Everything That You Need to Know

Atom Fork & 10% Inflation Rate CapEverything That You Need to Know

Jae Kwon’s Hard Fork Plan: AtomOne $ATOM1 / $ATMO

Atom Fork & 10% Inflation Rate Cap
Everything That You Need to Know