Founder of Cosmos Proposes Blockchain Hard Fork, Introducing ATOM1 Token
The vibrant Cosmos blockchain community is experiencing a pronounced rift that’s rapidly escalating. According to AZCoin News’ report on November 26th, Atom proposed a 10% reduction in inflation. Proposal 848 garnered a relatively narrow margin for passage, with 41% in favor compared to 31.9% opposed. This margin indicates a lack of unanimous agreement on the inflation reduction.
Proponents of the rejected proposal argue that the previous inflation rate of 14% exerted immense pressure on the total supply of ATOM, flooding the market and suppressing its price without fostering growth. Decreasing inflation could pave the way for a sustained increase in ATOM’s value, they contend.
Conversely, supporters of the existing inflation rate accuse Cosmos Hub of overallocating funds to security rather than incentivizing ATOM’s utilization within the DeFi economy.
Cosmos Hub serves as an intermediary for all independent blockchains within the Cosmos network, and its ecosystem revolves around the ATOM token as the primary currency.
However, the Cosmos Hub vehemently opposes these arguments, leading the anti-reduction faction. Following the voting defeat, Cosmos co-founder Jae Kwon called for a hard fork of the blockchain, proposed as AtomOne, branching out from the Cosmos Hub. Kwon aims to integrate both ATOM and the new network’s token, ATOM1.
Kwon’s tweets emphasized the need for community involvement and outlined plans for development teams to manage the transition toward a more decentralized final product. The intention is not to let the ATOM value collapse but to facilitate participation while refining tokenomics.
Now listen up Cosmonauts. Despite our voting NWV #848 has ended up passing, something that isn’t too surprising (though it would be good to know whether the later votes came from newly purchased atoms) @cosmos @Allinbits_inc #raptureparty #atomone
Now let’s coordinate a split.
— antechristus #343 (@jaekwon) November 25, 2023
This move toward a hard fork has sparked debates about the nature of control within blockchains and the power held by dissenting voters, both within and beyond the hub. Kwon believes that those aligned with logic and principles will exhibit antifragility and can self-organize even in the minority.
However, this divergence within Cosmos comes at a cost. Notably, prominent projects like Evmos are gearing up to leave Cosmos and transition entirely to Ethereum, signaling a shift away from the platform.
The market response to this internal friction has seen ATOM’s price drop by 3% in the last 24 hours, hovering around $9.5 USD.
As one of the noteworthy Layer-1 blockchains, Cosmos remains under the spotlight, but the departure of significant projects and the internal strife signify a challenging period ahead. The imminent hard fork, if executed, could lead to a bifurcation in the Cosmos community, underscoring the fragility of consensus in decentralized networks.
- Cosmos (ATOM) Price Breaks Out Critical Resistance, Aiming For Nearly 30% Upside
- Cosmos Community Divided Over Proposal To Halve ATOM’s Inflation
- Cosmos (ATOM) Inflation Slashed: Maximum Rate Drops To 10%, Stake Interest Reduced To 13.4%