DEFI

Cosmos Governance Dispute: Co-founder forks new chain "AtomOne," airdrops to dissenting voters.

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Cosmos Governance Dispute: Co-founder forks new chain "AtomOne," airdrops to dissenting voters.

The Cosmos proposal aims to reduce the inflation rate, but Cosmos co-founder Jae Kwon believes that insufficient rewards could jeopardize network security. He is attempting to fork a new chain called "AtomOne" and incentivize users who vote against it. This split has garnered strong support from well-known KOLs and analysts like "Ignas."

Cosmos Atom Deflation Proposal Narrowly Passes

According to the voting results, the governance proposal aimed at reducing the ATOM inflation rate from 14% to 10% narrowly passed with a 41.1% approval rate.

This is the highest participation rate in the history of the Cosmos ecosystem. The proposal summary includes:

  • Reducing ATOM issuance inflation from 14% to 10%

  • ATOM staking annual interest rate decreasing from approximately 19% to 13.4%

  • Blockworks Research found that Cosmos was overpaying on security rewards.

  • Almost all 180 validators could break even or profit at a 10% inflation rate.

Cosmos Co-founder: Deflation Could Jeopardize Network Security

Cosmos co-founder Jae Kwon believes that deflation could potentially decrease the overall network security, and the initial staking rewards and security were not as high as previously thought:

Cosmos penalizes non-stakers to ensure network participation and deter malicious behavior. With a 20% annual inflation rate, the nominal staking yield is 30%, but the actual return is only about 8.33%.

Therefore, if inflation is further reduced, Cosmos may face risks such as decreased staking rates and network security concerns.

Cosmos Co-founder Unhappy, Plans to Fork New Chain AtomOne

Jae Kwon has decided to fork Cosmos to launch the new chain AtomOne and token ATOM1.

Airdrop for Opponents of ATOM Inflation

According to the AtomOne documentation, its maximum inflation will be set at 20%, with the goal of maintaining 2/3 of ATOM1 in circulation staked to ensure security and stability.

The token distribution airdrop includes the following:

  • 10% pre-mine

  • The rest primarily for rewarding stakers selected by validators

  • Users who voted against governance proposal #848 may receive the airdrop
AtomOne Token Distribution

Introducing the Liquid Staking Token phATOM

DeFi researcher Ignas is very optimistic about the forked chain AtomOne and the post-fork Cosmos ecosystem.

He highlights:

  • AtomOne and Cosmos will grow together.

  • Cosmos will have more innovative developments in the future, while AtomOne will be more conservative.

  • phATOM will serve as the fee token on the AtomOne chain and will be more deflationary compared to ATOM and ATOM1.

Ignas emphasizes that phATOM does not have voting rights and is aimed at users more interested in DeFi and who do not want to hold highly inflationary tokens, while ensuring that ATOM1 is held by users actively participating in governance.

He concludes:

The emergence of AtomOne allows Cosmos to safely transition to a more experimental center. The fork proposal is not finalized yet, but I've never been more excited about the future of $ATOM.