Cosmos Community Votes: Proposal 868 Rejected with 25.10% For and 48.62% Against

Author : Elisabeth Louise | Published On : 24 Jan 2024

The Cosmos Hub, a key player in the interchain blockchain ecosystem, recently faced a pivotal decision as its community voted against a proposal (Proposal #868) seeking to dynamically adjust the minimum inflation rate for its native token, ATOM. The proposal aimed to reduce the minimum inflation from the existing 7% to 0%, contingent on more than two-thirds of the ATOM supply being bonded on the network.

The diverse group of validators involved in the decision showcased a split in opinions. Notable validators such as Everstake, Cosmostation, and Stake.fish opposed the proposal, citing concerns about security vulnerabilities at zero inflation. On the flip side, validators like Stakecito supported the idea, envisioning a scenario where high staking demand could trigger reduced inflation, optimizing token emissions based on network dynamics.

Stakecito, among other supporters, argued that decreasing inflationary rewards could benefit stakers in the long run without compromising security. They emphasized the potential for the Cosmos Hub to generate income from securing other blockchains in the ecosystem, creating a new revenue stream.

However, the opposition voiced concerns about potential downsides, including the security risks associated with zero inflation and the lack of immediate benefits. They questioned the ability of "non-ATOM denominated revenue" to replace inflationary rewards in the near future.

The final vote on Proposal #868 reflected a divided Cosmos Hub community, with 48.62% rejecting the proposal, 25.10% supporting it, and 25.91% abstaining. Despite the interest in exploring more flexible inflation models, concerns about security risks and the absence of immediate advantages played a decisive role in the vote.