ATOM Dips 4% as Cosmos Founder Advocates Fork Amid Inflation Vote

Crypto News- After the community voted to reduce inflation on the native token ATOM of Cosmos Hub to 10%, founder Jae Kwon has advocated for a hard fork of the cryptocurrency. This division in the Cosmos community resulted in a 4% decline in ATOM’s price over the past day, now valued at $9.29 according to CoinGecko.

ATOM Dips 4% as Cosmos Founder Advocates Fork Amid Inflation Vote

Proposal 848 secured 41.1% of the network’s voting power, surpassing the 31.9% opposing votes. About 6.6% voted for a veto, and 20.4% abstained. The approved proposal will cut ATOM’s inflation from approximately 14% to a maximum of 10%, reducing its APR from around 19% to roughly 13.4%. Supporters argued that the initial inflation rate was unnecessarily high for network security, asserting that validators could still operate break-even or profitably at a maximum 10% inflation rate, with the option to increase their commission rates.

Jae Kwon took to Twitter, urging the community to “coordinate a split,” proposing the creation of a new network, AtomOne, forked from Cosmos with a new ATOM1 token. AtomOne would support both ATOM and ATOM1. Notably, 10% of the ATOM1 genesis supply would be premined for various purposes, and the remaining 90% of token supply would be airdropped, determined by Alignment based on voting activity, to those opposing Proposal 848.

While the fork maintains much of the existing Gaia architecture, it features a higher maximum inflation rate of 20% and introduces an altered governance mechanism requiring proposals to achieve a two-thirds threshold for quorum.