Controversy arose in Cosmos after the community approved Proposal 848, aiming to reduce the inflation rate of Cosmos’ native token, ATOM, to 10%. The decision, although supported by 41.1% of the community, generated discontent among some, including Jae Kwon, co-founder of Cosmos.
Kwon’s response to the proposal’s approval was entirely unexpected: the creation of a hard fork named AtomOne. This move aims to establish a new network with an associated token, ATOM1. Kwon’s proposal not only reflects his disagreement with the inflation reduction but also suggests a significant shift in the governance and features of the Cosmos network.
Now listen up Cosmonauts. Despite our voting NWV #848 has ended up passing, something that isn't too surprising (though it would be good to know whether the later votes came from newly purchased atoms) @cosmos @Allinbits_inc #raptureparty #atomone
Now let's coordinate a split.
— antechristus #343 (@jaekwon) November 25, 2023
In this scenario, the Cosmos community is divided between those supporting the inflation reduction proposal to ensure network security and those sharing Kwon’s vision of maintaining higher inflation rates to incentivize validators and stakers. The vote was closely contested, with a minimal margin between support and opposition, highlighting the noticeable polarization of opinions within the community.
Kwon Has Already Made a Decision About Cosmos
Kwon, despite community requests to accept the democratic decision, is determined to proceed with the hard fork. AtomOne, according to his plans, will retain key elements of the original Cosmos Hub, such as the underlying Gaia software and features like IBC and interchain security. Additionally, Kwon proposes a separate fee token called Photon (phATOM1), which will operate in conjunction with ATOM1.
The implications of this development are diverse. On one hand, there is likely to be a significant impact on the value of the native ATOM token, which experienced a slight decrease after the hard fork announcement. On the other hand, some observers believe that this division could be a positive step for the community, resolving long-standing tensions and allowing innovations that might have been hindered by internal conflicts and never came to light.
According to the latest data published by CoinMarketCap, ATOM is currently going through a bearish phase, with an approximate 3.85% loss in its value over the last day, trading at $9.30 per unit at the moment. Its market capitalization also decreased to just over $3.52 billion, while its trading volume grew by 12%, reaching nearly $240 million.
The Cosmos network is at a crucial juncture. The approval of the inflation reduction proposal and Jae Kwon’s subsequent response with the AtomOne initiative could pave a new path for Cosmos and those, like Kwon, dissatisfied with the voting results. This conflict highlights the inherent challenges in decision-making within decentralized communities and raises questions about the future of governance in the Cosmos ecosystem.