Cosmos community votes to set ATOM’s minimum inflation at 0%

The Cosmos Hub ecosystem community has begun voting on a proposal to set the minimum inflation rate for the ATOM token at 0%.

Voting has begun in the Cosmos Hub community to set the minimum inflation rate for the ATOM token at 0%. Almost 95% of community members are currently voting for the proposal, which began on Jan. 9 and will end on Jan. 23. Only 4.4% were against inflation of the project’s native token, and 0.1% of community members used the right of veto.

Containing inflation can help preserve the value of the ATOM cryptocurrency. The token was under constant pressure from sellers, which led to price depreciation. Another negative factor the community hopes to eliminate is overpayments for security compared to other blockchains, which harmed the rewards in ATOM.

At the same time, in November 2023, the Cosmos network voted for the maximum inflation level for the ATOM cryptocurrency. After this, ATOM inflation cannot exceed 10% per annum. This will help preserve the token’s value but will affect the profitability of staking. The previous high for inflation was 20%.

After the update was implemented, the Cosmos staking yield dropped from 19% to 13.4%. Despite the decline in revenue, almost all 180 validators broke even or even continued to earn profits. In addition, in order to cover their expenses, they will be able to increase the size of the commission for processing transactions.