Cosmos Hub approves ATOM token inflation reduction to increase security

The proposal to reduce the inflation rate of the native Cosmos token (ATOM) was approved by Cosmos Hub, with 41.1% voting in favor and 38.5% voting against. This was the highest participation in a vote in the Cosmos ecosystem.

ATOM's inflation rate will be reduced from 14% to 10%, which will result in a decrease in the annualized staking yield from approximately 19% to approximately 13.4%. The proposal stated that ATOM's high inflation rate was resulting in Cosmos Hub overspending on security and that validators could still make a profit even as inflation was reduced to 10%.

The entity with the highest number of votes in favor of the proposal was Zero Knowledge Validator, which justified its support by stating that double-digit inflation was unnecessary for security and harmed ATOM's price in the long term. The biggest opposition came from AllNodes, which argued that the change could negatively impact small validators.

This reduction in ATOM's inflation rate aims to improve the security of Cosmos Hub while encouraging the use of the token in DeFi and other areas of the ecosystem.