Cosmos Hub’s governing body has approved a proposal to reduce the maximum inflation rate of its native token, Cosmos (TO TOM), from 14% to 10%.
Second The proposed, permitted change would reduce the annual return on ATOM staking from approximately 19% to 13.4%. Cosmos Hub is the primary blockchain within the Cosmos Network, a system of interconnected blockchains. ATOM token is used for staking, governance and transaction fees.
The proposal was narrowly accepted, with 41.1% of the votes in favor and 38.5% against. It was thought it would be rejected shortly before the deadline, but a last-minute influx of votes and some U-turns from approvers tipped the scales in favor of the proposal.
The proposal argued that ATOM’s high inflation rate caused Cosmos Hub to overspend on security. He also noted that validators could achieve break-even or profitability with inflation reduced to 10%.
Zero Knowledge Validator, the organization with the most votes in favor of the proposal, justified its support on X (formerly Twitter). The article is as follows:: “Double-digit inflation is unnecessary from a security perspective, weakens the price of ATOM in the long run, and discourages its use in DeFi and other areas in the Atomic Economic Zone.”
The most significant dissenting vote was cast by the validator AllNodes. he illustrated His dissent in a post on X. AllNodes argued that the change could negatively impact small validators and labeled the proposal as follows: “It’s a blunt, short-sighted and ill-conceived idea that could cause havoc among retailers and companies involved in building, trading and approving the Atom.”
Cosmos Hub recently released an update for the launch liquid detection moduleThis allows users to bypass the previous 21-day unbinding period, freeing up their funds. Before the update, ATOM holders were required to comply with a 21-day lock-in period before they could move their funds. Thanks to the new module, staked ATOMs can be used in the Cosmos decentralized financial ecosystem without compromising the staking return.