- The Cosmos community is voting a proposal to push the minimum inflation rate to 0%.
- The Cosmos network is expected to produce 7% additional tokens annually even if the entire ATOM supply is staked.
- The Cosmos community already approved capping ATOM maximum inflation at 10%.
The Cosmos (ATOM) community is voting on a proposal to set the minimum inflation rate at 0% a month after approving to reduce the maximum inflation level to 10%. Inflation is the reduction in the underlying asset's value as its circulating supply increases.
The Cosmos community has until January 23 to decide for or against the request.
If approved, ATOM stakers and holders are likely to benefit from reduced inflation, since even if all tokens are staked at a given point in time, the network will inevitably produce 7% more tokens annually. This ATOM emission is being addressed by changing the minimum inflation parameter and setting it to zero.
Also read: Bitcoin price gears up for rally to $50,000 as Spot BTC ETF race for approval intensifies
Cosmos community votes on Proposal 868
The Cosmos Hub for governance announced that Proposal 868 is open for voting, in its official tweet on X (formerly Twitter). The plan is to reduce minimum inflation to zero from the current 7%.
1/ ⚛️ Cosmos Hub Gov ⚛️
— Cosmos Hub ⚛️ (@cosmoshub) January 9, 2024
Voting period is open for Prop #868
‘’Decrease InflationMin parameter to 0%’’
This prop aims to reduce the min inflation param from 7% to 0%.
If the proposal passes, once the 67% goal of bonded ATOM is reached, the inflation rate will trend towards 0% pic.twitter.com/xKwXooHGXF
This proposal was introduced as a follow-up to Proposal 848, which called to limit ATOM inflation to 10% so holders and stakers can benefit from the limited supply of the asset in circulation. Once Proposal 868 is passed, the inflation rate will trend towards 0%.
The network considers it is important to set both a minimum and maximum inflation for ATOM to address security concerns and to encourage staking in the ecosystem. By proposing a minimum inflation rate, the network expects revenue from consumer chains to become substantial.
At the time of writing, ATOM's price is $9.841, down 12% in the past week.
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