Cosmos Founder Proposes Blockchain Hard Fork, ATOM Price Declines
Despite passing a proposal to reduce annual inflation rates, internal conflicts within Cosmos show no signs of abating. Recently, the founder of Cosmos has called for a blockchain hard fork.
Cosmos Founder Proposes Blockchain Hard Fork, ATOM Price Declines
The Cosmos blockchain community is increasingly divided. As reported by Coin68 on November 26th, Atom passed a proposal to reduce inflation rates to 10%. Proposal 848 was approved with a narrow voting margin - 41% in favor versus 31.9% opposed.
These figures highlight the lack of consensus on reducing inflation rates. Opponents argue that the previous inflation rate (14%) exerted significant pressure on the overall supply of ATOM, flooding the market and suppressing price growth. Lower inflation is seen as beneficial for long-term ATOM price appreciation.
Additionally, proponents of high inflation argue that Cosmos Hub allocates excessive resources to security, failing to incentivize ATOM usage within the DeFi economy.
Cosmos Hub acts as an intermediary for all independently created blockchains within the Cosmos network. The ecosystem utilizes the ATOM token as its native currency.
See more: Interchain
Of course, Cosmos Hub does not agree with these arguments, leading to a significant anti-vote. After failing in the "voting battle," Cosmos founder Jae Kwon has called for a blockchain hard fork.
Kwon's proposed hard fork, named AtomOne, branches off from Cosmos Hub. The ultimate goal of this hard fork is to support both the ATOM token and the token of the forked network, ATOM1.
"I believe the ultimate plan should involve integrating ATOM and ATMO/ATOM1, rather than indiscriminately dumping ATOM as is currently done."
Documents regarding AtomOne are still in the editing phase, and the community is encouraged to contribute to finalizing tokenomics.
If the hard fork proceeds smoothly, ATOM holders may receive ATOM1 tokens in proportion to their holdings. This opens up potential airdrop opportunities for the Cosmos community.
A longtime Cosmos observer with the handle "John Galt" commented that this split could alleviate internal project tensions.
"A hard fork is very bullish. Political tensions have hindered Cosmos Hub's development for years, especially after the Cosmos 2.0 proposal was rejected in the fall of 2022.
Without Jae Kwon's conservatism, Cosmos Hub could become more innovative."
Cosmos remains a noteworthy Layer-1 blockchain, albeit witnessing the departure of some prominent projects. Recently, Evmos is preparing to cease operations on Cosmos, transitioning fully to Ethereum.
ATOM's price has recorded a 3% decline over the past 24 hours, hovering around $9.5 USD.
Chart: 1H chart of ATOM/USDT pair on Binance at 03:20 PM on November 27, 2023
