Cosmos’ Proposal to Reduce ATOM’s Inflation Rate: Opposers Lead

• The voting period spans from November 12 to November 26, 2023.
• The Cosmos community has proposed to reduce the inflation rate of ATOM from 14% to 10%.
• As of now, the validators opposing the proposal lead with 40.8% votes, while supporters boast 36.9% votes.

The Cosmos community initiated a voting system on November 12 concerning the ecosystem’s proposal to reduce Cosmos token ATOM’s inflation rate to 10%. According to the current estimations, the proposal is expected to be rejected as the opposing votes overpower the supporting votes.

In October 2023, Zaki Manian, the co-founder of the decentralized asset management protocol Sommelier, submitted a proposal to change the maximum inflation parameter on Cosmos from 20% to 10%, dropping the inflation rate to 10%. As per his perceptions, the long bear market has little affected the high rate that Cosmos pays for stakers. Introducing the proposal of inflation rate reduction, Manian stated,

Reducing the staking rate should be a boost to [Cosmos Liquid Staking Module (LSM)] adoption and will hopefully drive more users towards Mars, Inter Protocol, Levana, etc. for higher yield.

In a recent tweet, Chinese reporter Colin Wu shared a post on the Wu Blockchain X page, providing insights on the updates on Cosmos’ voting system. As of now, the voters against the proposal lead with 40.8% of the votes, while the supporters stay behind with 36.9% of the votes. The voting period that spans from November 12 to November 26, 2023, 75 out of 180 validators submitted their votes within the first four days, i.e., November 12 to 15, 2023.

The proposal intends to decrease the inflation rate of ATOM from 14% to 10%, which would, in turn, bring the staking APR from 19% to 13%. As per the official statement, the proposal is one of the three proposals that envision reducing inflation, providing better incentives for staking, and improving the network’s security.