Cosmos Developers Propose Zero Inflation for ATOM Coin

To further reduce the inflation of its native coin, the developers of the inter-blockchain communications (IBC) protocol known as Cosmos have expressed their desire to do so.

On January 9, StakeLab, a staking and relaying hub on the Cosmos ecosystem, submitted a request expressing developers’ desire to reduce the minimum inflation of ATOM to zero percent.

If approved, the plan will reduce the existing inflation rate for ATOM to either 0% or 20%, bringing it down from its current range of 7% to 20%.

A quorum of forty percent of ATOM’s total supply and a sufficient number of yes votes are necessary for the proposal to be approved before January 23.

StakeLabs wrote the following in their explanation of the rationale for the proposal:

“This minimum rate implies that, theoretically, even if 100% of the token supply were staked, the network would continue to produce an additional 7% of tokens annually. This situation raises concerns and, to my knowledge, doesn’t align with any other functioning blockchain model (even outside).”

StakeLab went on to add that the community ought to take into consideration the possibility of sending protocol revenue from growing Cosmos consumer chains to ATOM stakers rather than releasing tokens outright.

According to the company’s documents, maintaining a 7% annual emission rate may not be sensible if the revenue from consumer chains becomes substantial.

A concerned user has suggested that the concept of 0% inflation may potentially dissuade present ATOM stakers and impact ecosystem tokenomics, where more than sixty percent of ATOM is currently staked.

According to the user’s writing, “For instance, two chains that are based on Cosmos SDK and have zero inflation are DYDX and Kava.”

Even though DYDX is still in the process of transitioning, Kava has been around for quite some time but has only recently introduced 0% inflation.

DYDX has approximately 7% of the total stake at present, whereas Kava has 12%.