Cosmos Developer Proposes Radical Inflation Cut for ATOM Token
In a recent development within the Cosmos (ATOM) ecosystem, a proposal has emerged, signaling a significant shift in the approach to managing the project's native asset's inflation rate.
Zaki Manian, a co-founder of Sommelier, a decentralized protocol for asset management, has introduced a proposal that would revise the maximum inflation parameter within the Cosmos network. This modification aims to reduce the inflation rate by 50%, from its current 20% to a new level of 10%.
The rationale behind this proposal is rooted in a wealth of empirical evidence suggesting that the Cosmos network has been exceedingly generous in compensating stakers for their services. The staking rate has exhibited remarkable resilience despite enduring months of high inflation during a bear market.
The expected outcome of a reduced staking rate is to encourage broader adoption of the Cosmos Liquid Staking Module (LSM). Such a change is poised to incentivize more users to explore platforms like Mars, Inter Protocol, Levana, and similar options in search of potentially higher yields.
Importantly, this proposal is centered on the adjustment of a specific parameter. Its implementation would significantly influence the growth rate of the community pool, and it’s worth noting that a separate proposal may be under consideration to address the allocation of the community pool.
Cosmos, renowned for its role as an interoperable blockchain ecosystem, is the backdrop against which this proposal unfolds. At the time of writing, Cosmos’s native token, ATOM, is trading at $7.14. Remarkably, ATOM holds the 29th position in market capitalization, having experienced an impressive 6% increase in value within the past 24 hours.
Zaki Manian, a key figure in the development of the Cosmos ecosystem and the launch of its first public testnet, is closely associated with the Sommelier project. This project’s primary objective is to enhance interoperability with various other blockchain networks, as outlined on its official website.