cryptonews.net
The Cosmos Hub has approved a proposal to reduce the maximum inflation rate of its native Cosmos token ($ATOM) from 14% to 10%. According to the proposal, the authorized change would reduce $ATOM’s annual staking yield from approximately 19% to approximately 13.4%. Cosmos Hub is the main blockchain system of interconnected Cosmos blockchains. The $ATOM token is used for staking, governance and payment of transaction fees. The proposal passed by a narrow margin: 41.1% votes in favor and 38.5% votes against. It was expected to fail shortly before the deadline, but a last-minute influx of votes and some cancellations by validators slightly changed the result in favor of acceptance.
The proposal stated that the increased rate of $ATOM inflation had caused the Cosmos Hub to overspend on security. It also claimed that validators could still achieve breakeven or profitability when inflation dropped to 10%. The most significant dissenting vote came from validator AllNodes, who outlined their opposition in a post on X. AllNodes argued that the change could negatively impact smaller validators, calling the proposal drastic, short-sighted and poorly researched, with the potential to harm retail and development businesses, trading and $ATOM validation.
Cosmos Hub recently updated and launched a liquid staking module. Prior to the update, $ATOM holders had a lock-in period of 21 days to move their funds once the tokens were unlocked. Thanks to the new module, staking $ATOM can be used in the Cosmos decentralized finance ecosystem without compromising staking returns. According to CoinDesk, at the time of writing, $ATOM was trading 3.5% lower, at $9.59. The cryptocurrency rose above $10 over the weekend but failed to gain a foothold above three-week resistance.
Image: Cosmos Network