ATOM Slips 4% as Founder Pushes for Cosmos Fork After Inflation Vote

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. This development has created a rift in the Cosmos community and resulted in a 4% decrease in the price of ATOM in the past day, currently valued at $929 per CoinGecko.

Inflation Proposal Voted and Passed

Proposal 848 received 411 votes in favor, with 319 against, 66 for a veto, and 204 abstentions. This proposal aims to reduce ATOM's inflation rate from around 14% to a maximum of 10%, resulting in a decrease in its Annual Percentage Rate (APR) from approximately 19% to 13.4%.

Reasons for the Proposal

Proponents of the proposal argued that the current inflation rate was higher than necessary to maintain network security. They believe that by reducing the inflation rate, validators would still be able to break-even or generate profits. Validators would also have the option to increase their commission rate to cover operational expenses.

Founder Calls for a Hard Fork

In response to the passing of the inflation proposal, founder Jae Kwon took to Twitter to call for a hard fork of the Cosmos network. His suggestion is to create a new network named AtomOne, which would be forked from Cosmos and feature a new token called ATOM1. Importantly, the proposed network would support both ATOM and ATOM1.

Details of the Hard Fork Proposal

The hard fork, should it proceed, would entail a premine of 10% of the initial supply of ATOM1 for various purposes. The remaining 90% of the token supply would be distributed through an airdrop to those who opposed proposal 848, with the allocation determined by voting activity and judged by Alignment.

The proposed AtomOne network would retain much of the existing Gaia architecture used by Cosmos Hub. However, it would have a higher maximum inflation rate of 20% and a modified governance mechanism that requires proposals to achieve a two-thirds threshold for quorum.

The Cosmos community is now grappling with diverging viewpoints following the passing of the inflation proposal. Founder Jae Kwon's call for a hard fork introduces the possibility of a new network, AtomOne, alongside the existing Cosmos ecosystem. The future of ATOM and ATOM1 remains uncertain as the community evaluates the potential implications of this proposed fork.