decrypt.co
Following the passing of a community vote to slash inflation on the Cosmos Hub’s native token ATOM to 10%, founder Jae Kwon has called for a hard fork of the cryptocurrency.
The rift in the Cosmos community has seen the price of ATOM slip by 4% in the past day, to its current value of $9.29, per CoinGecko.
Proposal 848 passed with 41.1% of the network’s voting power versus 31.9% against, with 6.6% voting for a veto and 20.4% abstaining. The proposal will see ATOM’s inflation cut from around 14% to a maximum of 10%, reducing its APR from around 19% to around 13.4%.
Proponents of the proposal argued that its inflation rate was higher than necessary to maintain network security, and that validators would remain "break-even or profitable" at a maximum 10% inflation rate, with the option of increasing their commission rate to cover operational expenses.
In a post on Twitter, Jae Kwon called for the community to “coordinate a split,” suggesting that a new network, AtomOne, should be forked from Cosmos with a new ATOM1 token; the proposed new network would support both ATOM and ATOM1.
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
With 10% of the genesis supply of ATOM1 set to be premined for “various purposes,” a genesis distribution of the remaining 90% of token supply would be airdropped, “judged by Alignment based on voting activity,” to those who opposed proposal 848.
Although the fork will use much of the existing Gaia architecture employed by Cosmos Hub, it will retain a higher maximum inflation rate of 20%, and would include an altered governance mechanism that would require proposals to pass a two-thirds threshold to achieve quorum.