Cosmos Hub

"A significant proposal started in Cosmos Hub (Atom) 3 days ago."


For those who do not understand governance, the shortcut is to set the minimum inflation in Cosmos to 0%.
I think this is pointless and will cause trouble (at least for now).
So why ?
I will answer this one by one. 👇
Cosmos recently had governance vote number 848.
According to this vote, Cosmos reduced the hub's Maximum inflation from 20% to 10%, the current inflation from 14% to 10%, and the APR from around 19% to 13%.


So what does this mean? If we look at the current APR information I received from mintscan below, a large part of Atom's APR, which varies around 13.98% at the moment, comes with inflation, around 10%. So Stakers and validators earn returns with inflation!


I think that if the minimum value of inflation is 0% as in the current governance, Cosmos hub, which is not a protocol, will lead to a serious decrease in the amount of staked tokens. Because the current Cosmos community is used to high APR++


and they stake Atom tokens due to the staking returns and airdrops coming from here. If inflation is at least 0%, the return on the network will decrease and APRs will remain at very low levels since there is no activity on the on-chain. Because APR = Inflation + Fee

Where the APR is low, there will be a decrease in the amount of Stake. This will have a negative impact on the price as it will increase the amount of Atoms circulating in the market. So, doesn't Atom have any utilities? Or in other words, isn't there another mechanism that will add value to the Atom token? ++

Answer = yes (There are Consumer chains that come with Atom 2.0) Consumer chains briefly refer to different chains connected to Atom but operating outside Atom, which benefit from Atom's POS security and whose consensus is provided by Atom validators.

However, since this design was introduced, I have been criticizing its meaninglessness. Because in consumer chains, although security depends on the Cosmos hub and adds value to ATOM, the entire data load is stored by independent nodes outside Atom. Architecturally it's ridiculous.