The Cosmos developer team, through the Inter-Blockchain Communication (IBC) protocol, has proposed a significant step to reduce the inflation of its native token, ATOM, to a minimum of 0%. This proposal, initiated by StakeLab, a staking platform within the Cosmos ecosystem, was presented on January 9th, aiming to adjust the inflation range from the current 7-20% down to 0-20%.
For the proposal to pass, it must secure a majority vote representing at least 40% of ATOM’s current supply before January 23rd. StakeLab argues that even if 100% of the token supply is staked, the network would continue to produce an additional 7% of tokens annually, a concern that is inconsistent with other blockchain models.
StakeLab suggests that the community should consider transferring protocol revenue from emerging Cosmos ecosystems to ATOM stakers, rather than directly issuing new tokens. This becomes particularly relevant if the revenue from consumer ecosystems becomes substantial, making a 7% annual emission rate potentially unnecessary.
A user points out that a 0% inflation proposal could demotivate current ATOM stakers and affect the ecosystem’s tokenomics, where over 60% of ATOM is already staked. Networks like DYDX and Kava, based on the Cosmos SDK, have already adopted a 0% inflation policy, with DYDX in transition and Kava having recently implemented it.
Amidst these developments, recent airdrop events in the Cosmos ecosystem have garnered significant attention, particularly for ATOM stakers who gain additional profits beyond staking rewards. These events have contributed to a decrease in circulating ATOM supply and an increase in its price.