Cosmos Community Is Voting On ATOM 2.0
New governance proposal for interoperable blockchain network Cosmos is now live for on-chain vote. The controversial upgrade suggests turning the network's native ATOM token into a reserve asset.
Community vote for the governance proposal put forward by developers of interoperable blockchain network Cosmos is now live. The ATOM 2.0 proposal put forward in August discusses bringing upgrades to the network’s existing interchain security mechanism and status of the blockchain’s native asset, ATOM.
Cosmos is an interoperable network of chains that communicate with each other and a central blockchain called the ‘Cosmos Hub’ using the Inter Blockchain Communication (IBC) protocol.
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The proposal supposed to go live on vote in September was delayed after Cosmos holders raised concerns regarding the upgrades, which led to the new whitepaper being revamped twice. With ATOM 2.0, developers suggested upgrading blockchain’s security system by allowing certain chains to use the Cosmos Hub to secure themselves. Other changes include making ATOM the reserve asset of the blockchain to used as collateral by applications running on the ecosystem.
A major issue raised by ATOM holders regarding the proposal is its token issuance model. According to first iterations of ATOM 2.0, minting large amounts of ATOM for the treasury is followed by a drop in rewards earned by holders from staking the asset. Frustrated Cosmos community members and ATOM holders demanded for less front-loading when tokens are created. Developers heeded to the requests by making adjustments to their model, which now suggests minting just 4 million ATOM tokens for the community pool with ten tentative mints for the treasury. The process will be done at the discretion of ATOM holders.
Differences between the community and developers led to Jae Kwon, co-founder of Cosmos who left in 2020, to return with a counterproposal. Jae Kwon’s ATOM One proposal suggested the creation of a second token called PHOTON which will act as the main reserve and monetary asset of Cosmos, while ATOM remains the staking and governance token of the Cosmos hub.
Community members have two weeks to vote on ATOM 2.0. Quorum for the proposal is set at just 40%, lower than the typical pass rate of 50%, after over 90% of the community ratified it. At the time of writing, ATOM is trading at $14.05, down 1.3% in the last 24 hours.