ATOM Slips 4% as Founder Pushes for Cosmos Fork After Inflation Vote

Following the passing of a community vote to slash inflation on the Cosmos Hub’s native token ATOM to 10%, founder Jae Kwon has called for a hard fork of the cryptocurrency.

The rift in the Cosmos community has seen the price of ATOM slip by 4% in the past day, to its current value of $9.29, per CoinGecko.

Proposal 848 passed with 41.1% of the network’s voting power versus 31.9% against, with 6.6% voting for a veto and 20.4% abstaining. The proposal will see ATOM’s inflation cut from around 14% to a maximum of 10%, reducing its APR from around 19% to around 13.4%.

Proponents of the proposal argued that its inflation rate was higher than necessary to maintain network security, and that validators would remain “break-even or profitable” at a maximum 10% inflation rate, with the option of increasing their commission rate to cover operational expenses.

In a post on Twitter, Jae Kwon called for the community to “coordinate a split,” suggesting that a new network, AtomOne, should be forked from Cosmos with a new ATOM1 token; the proposed new network would support both ATOM and ATOM1.

With 10% of the genesis supply of ATOM1 set to be premined for “various purposes,” a genesis distribution of the remaining 90% of token supply would be airdropped, “judged by Alignment based on voting activity,” to those who opposed proposal 848.

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Although the fork will use much of the existing Gaia architecture employed by Cosmos Hub, it will retain a higher maximum inflation rate of 20%, and would include an altered governance mechanism that would require proposals to pass a two-thirds threshold to achieve quorum.