Cosmos founder Decides to Fork Cosmos Hub In Protest Against ATOM's Reduced Production

Cosmos founder Decides to Fork Cosmos Hub In Protest Against ATOM’s Reduced Production

November 27, 2023

Bhushan Akolkar

Senior Journalist

Expertise : Cryptocurrency, Blockchain, Macro Finance

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.   He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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Cosmos Price Analysis: New Year Brings 30% Growth Opportunity In ATOM Coin

Cosmos founder Jae Kwon has expressed his dissent against the ATOM production reduction vote, which, despite his opposition, was successful. In response, Kwon has announced plans to fork Cosmoshub4, unveiling a new network named AtomOne.

The upcoming network is set to operate autonomously, featuring its own governance plan and development team, with a focus on achieving increased decentralization.

Cosmos Votes to Reduce Infaltions, Drops Staking Yield

The governing body of the Cosmos Hub has given approval to a proposal aimed at reducing the maximum inflation rate of its native token, Cosmos (ATOM), from 14% to 10%. This decision comes in response to concerns about the high inflation rate and its potential impact on network security and token prices.

Additionally, the proposed adjustment would lead to a decrease in ATOM’s annualized staking yield from around 19% to approximately 13.4%. ATOM tokens play crucial roles in staking, governance, and covering transaction fees within the Cosmos network. The proposal faced a close vote, with 41.1% in favor and 38.5% against.

Critics of the proposal also argued that the change might adversely affect small validators and deemed it “an abrupt, short-sighted, and ill-researched idea” that could disrupt retail and businesses involved in building, trading, and validating ATOM.

Notably, the Cosmos Hub recently underwent an upgrade introducing a liquid staking module, allowing users to bypass the previous 21-day unbonding period when unstaking ATOM tokens. This enhancement further provides greater flexibility to ATOM holders, enabling the use of staked tokens in the Cosmos decentralized finance ecosystem without compromising staking rewards.

Cofounder Refuses the Developments, Plans Hard Fork

As stated earlier, Jae Kwon has planned a hardfork of the Cosmos Hub blockchain while renaming the forked version as CosmosOne.

In a recent statement, Cosmos founder Jae Kwon revealed plans to integrate $ATOM with $ATMO/$ATOM1, aiming to avoid mass selling and potential market collapse. Kwon emphasized the need for improvements to the README and invited tokenomics experts to contribute ideas.

The proposal involves forking “cosmoshub4,” maintaining the current software but implementing an independent plan with decentralized development teams, surpassing the decentralization level of Gaia. All those who voted against the proposal (NO voters) are welcome to participate.

Kwon addressed confusion regarding the influence of NO/NWV voters both inside and outside the hub, emphasizing the existence of a community aligned with logical principles and goals. The plan aims to demonstrate antifragility, showcasing the resilience of a system against attempts to control it.

The statement highlighted the decentralized nature of blockchain networks, asserting that even a minority with logical reasoning can self-organize and resist majority control. Kwon concluded by emphasizing the importance of exodus, suggesting that those who disagree can choose to exit and create a more successful civilization, free from potential failures.

At press time, Cosmos’ native ATOM token is trading at $9.56 with some volatility.