Major Changes in the Cosmos Ecosystem: Controversy Arises Over ATOM Inflation Rate Adjustment

Recently, there has been an important discussion about the inflation rate of the ATOM token within the Cosmos ecosystem. A proposal aimed at reducing the maximum inflation rate from 20% to 10% has sparked intense debates within the community. This proposal was ultimately passed by a narrow margin, but the process revealed significant differences between various interest groups within the ecosystem.

After the proposal was passed, one of the co-founders of Cosmos and Tendermint expressed strong dissatisfaction on social media and even suggested the idea of forking ATOM. This statement further sparked heated discussions within the community about the future development direction of Cosmos.

Background of Inflation Rate Adjustment

The high inflation rate of ATOM has been a topic of controversy for a long time. Data shows that before the proposal was passed, ATOM's inflation rate of 14.97% was almost the highest among major PoS public chains. Cosmos has a target staking rate of 67%, and the inflation rate dynamically adjusts between 7% and 20% based on the actual staking rate.

An analysis by a research institution pointed out that Cosmos may have incurred excessively high costs in maintaining network security. The study found that even at a maximum inflation rate of 10%, the vast majority of validators can still achieve break-even or profit through commission income. Based on this research, a well-known industry figure proposed a plan to lower the maximum inflation rate of ATOM to 10%.

Voting Result Analysis

The proposal concluded voting on November 26, passing by a narrow margin. The total voter turnout reached 72.6%, with 41.1% in favor, 31.9% against, 6.6% vetoed, and 20.4% abstained. According to the governance rules of Cosmos, the proposal barely met the passing criteria.

It is worth noting that although the support rate is not high in terms of voting weight, the support rate among the accounts participating in the vote is as high as 94.97%. This difference reflects that a large number of small holders tend to support the proposal, while certain large holders and validators tend to oppose it.

Community Opinion Divergence

Supporters believe that lowering the inflation rate will drive the adoption of the liquid staking module, increase the liquidity of ATOM, and promote the development of the Cosmos DeFi ecosystem. They also believe that this move may enhance the market value of ATOM, benefiting long-term investors.

Opponents are concerned that lowering the inflation rate may reduce staking incentives and impact network security. Some also worry that this could lead to further concentration of ATOM holdings and bring uncertainty to the market in the short term.

Impact on the Future of Cosmos

The recent controversy over the inflation rate adjustment reveals the governance challenges faced by the Cosmos ecosystem. It reflects the divergence of opinions among different groups regarding the direction of project development and highlights the complexity of balancing various interests in a decentralized system.

With the passage of the proposal, the Cosmos ecosystem may usher in a series of changes. This may not only affect the market performance of ATOM but also have profound implications for the development trajectory of the entire ecosystem. The community will closely monitor the long-term effects brought about by this change, as well as its impact on the security and economic model of the Cosmos network.