Cosmos Founder Advocates for Chain Split, ATOM Drops by 3%

• Jae Kwon, Cosmos Founder, Advocates for Blockchain Division
• ATOM Facing Moderate Losses After Proposal for Blockchain Split
• Details of Proposal 848
• Kwon Calls for Hard Fork
• Community Reactions
• Impact on ATOM Trading

Jae Kwon, Cosmos Founder, Advocates for Blockchain Division

Jae Kwon, the founder of Cosmos, has suggested that the blockchain should be divided into two. This follows a community decision to lower the inflation of Cosmos' native token, ATOM, to 10%. The proposed hard fork, titled AtomOne, could potentially be beneficial for the ATOM token, as predicted by an observer.

ATOM Facing Moderate Losses After Proposal for Blockchain Split

ATOM, the indigenous coin of Cosmos Hub$11.1 -3.05%, is facing moderate losses a day after Jae Kwon's proposition for the blockchain to be divided. One observer has praised the potential hard fork as a positive outcome for investors. The Cosmos community recently approved a proposal to decrease ATOM's inflation from 14% to 10%. The Cosmos Hub serves as a middleman for all independent blockchains created within the Cosmos network. ATOM is the power behind the Cosmos ecosystem of blockchains, designed to scale and interoperate.

Details of Proposal 848

The proposal, number 848, received 41.1% support for the reduction from the voting power and 31.9% opposition. It was suggested that the double-digit inflation rate of ATOM constituted overpayment by the Hub for security, discouraging ATOM's usage in decentralized finance. The approved change is anticipated to decrease ATOM's annualized staking yield from roughly 19% to approximately 13.4%. Staking involves securing coins on a blockchain in exchange for rewards.

Kwon Calls for Hard Fork

Kwon did not support the outcome of the vote and instead proposed a hard fork. His vision for the hard fork, AtomOne, would involve forking the Cosmos Hub. He proposed a final plan in which the forked chain would support the ATOM token as well as the native ATOM1.

Community Reactions

John Galt, a user and strategist at Stride Zone, who has expertise on Cosmos, believes that a hard fork could resolve years of disagreements within the community and be beneficial for ATOM token holders. He also anticipates that the hard fork could lead to a significant drop in ATOM and result in a substantial increase in the trading volume of both ATOM and ATOM1 tokens.

Impact on ATOM Trading

Despite the propositions, ATOM was trading 3.5% lower at $9.59 at the time of reporting. The cryptocurrency had peaked above $10 during the weekend but was unable to maintain its position above the three-week resistance. This downturn is potentially due to bitcoin, the industry leader, struggling to rise above the $38,000 mark.

Edited by Jonathan Stoker