Content Directory:

· Cosmos "Community at a Crossroads", Forking Plan Token Economics Announced

· Forking Trigger: Approval of Proposal #848

· Ongoing Internal Conflict, What's Next for Cosmos?

This weekend, the Cosmos fork and new proposals have been widely discussed in the cryptocurrency industry. Since the "ATOM Reduction: Setting the Maximum Inflation Rate to 10%" proposal began voting on November 15th, until the proposal was officially passed on November 26th, the discussion within the Cosmos ecosystem gradually spilled over to the entire industry.

On November 27th, Cosmos co-founder Jae Kwon (@jaekwon) announced that "Cosmoshub4" will be forked and the new network will be named "AtomOne". This statement may further intensify the discussion around Cosmos.

Cosmos "Community is at a Crossroads", Forking Plan Token Economics Announced

In Jae's lengthy article, more information about the expected fork is shown in the file.

According to the document, the Cosmos community is at a crossroads, facing different views and challenges in key areas such as mission, token economics, and security concepts. These challenges stem from the nature of the core token economics, the $ATOM token (whether it is staked or used as currency), monetization strategies, and funding for what types of projects.

"Compared to our profits and interests, there seems to be a huge cultural divide in our roles and responsibilities, and there is no indication that this divide will be bridged."

At the same time, the $ATOM1 token economics were also disclosed in the document. It is reported that $ATOM1 will be defined as the minimum staking token for the ICS1.5 IBC AtomOne Hub, always maintaining 2/3 of $ATOM1 staked.

"AtomOne will provide a $ATOM staking pool in the core shard to compete with collective 'liquid staking' service providers. These $ATOM will be automatically delegated through ICA (interchain accounts) to the consensus validators determined by $ATOM1 stakers. Guarantors of $ATOM for this service will receive liquid $phATOM tokens."

"In addition to Gaia's $ATOM, AtomOne's $ATOM1 token can also be bound with the $phATOM1 token. Therefore, $phATOM and $phATOM1 tokens coexist, but there are some differences in the token economics between them. We have more control over the $phATOM1 token economy, although changes we introduce to $phATOM1 may upstream to Gaia's $phATOM."

"As a reward for delegating voting decisions of $ATOM bond holders to $ATOM1 stakers, AtomHub will provide permanent opportunity for $phATOM holders to merge their $phATOM with $phATOM1 at a reasonable exchange rate determined by $ATOM. The optimal way will be determined by $ATOM1 stakers and the minimum conversion penalty is 20%, and the total market value ratio between $phATOM and $phATOM1 shall not exceed 1:2. For clarity, this means that in the event of Gaia failure, $phATOM token holders may dilute $phATOM1 holders, reducing the base $ATOM1 of $phATOM1 holders to no less than 2/3 of the pre-merger amount."

Fork Trigger: Proposal #848 Passed

In fact, the direct trigger for the Cosmos joint creation to initiate the fork was proposal #848 in the Cosmos community.

On November 12th, the Cosmos Hub community launched proposal #848, codenamed "ATOM Reduction: Setting the Maximum Inflation Rate to 10%", and called on the community to vote. According to official documents, the proposal aims to reduce the ATOM inflation rate from about 14% to 10%, which will reduce its stake annual interest rate from about 19% to about 13.4%.

In the following days, the Cosmos ecosystem token saw a general rise in prices, with the ATOM token rising by 12% in 7 days.

Meanwhile, on the day the proposal was launched, Jae Kwon, the co-founder of Cosmos who had already left Cosmos, posted on social media that if #848 is passed, AIB may first diversify significantly from ATOM, and then provide funding for the minimum hub fork according to #raptureparty: "I suggest that everyone who is disappointed with the current situation do the same."

At the same time, he also proposed that every Cosmos "influencer" who suggests reducing the MAX_INFLATION rate should be listed, so that everyone can avoid those who do not understand the systemic risks introduced by it: "In my opinion, this is a huge red flag and close to malicious."

Despite Jae's strong opposition, the proposal was successfully passed on November 26th with a support rate of 41.1%, opposition rate of 31.9%, and abstention rate of 20.4%. It is worth noting that the voting rate for this proposal is the highest in the history of Cosmos Hub, according to official information from Cosmos Hub (@cosmoshub).

After the proposal was passed, Jae posted a long article on social media on November 26th, expressing his views on the proposal. Jae believes that the final plan should include the integration of ATOM with ATMO/ATMO1, so that ATOM will not be sold in large quantities and collapse completely, but will be allowed to participate, while the README content can be improved.

It is also worth noting that Jae announced a fork of "Cosmoshub4" and the new network will be named "AtomOne" to become the current software. However, they will manage the transition to the minimal final product through their own plan and development team (more decentralized than Gaia): "AIB will not be the only participant, and all those who vote against it are welcome to participate."

Internal strife continues, what is the future of Cosmos?

In fact, the controversy and discussion caused by this proposal and fork may have already had some signs. Jae published a blog post at the end of October, revealing a series of problems he has encountered within the project since participating in Cosmos in 2013. The main problem is centered around another co-founder, Ethan Buchman (@buchmanster), whom Jae believes planned the project's split and misappropriated funds.

Related reading: "Cosmos internal conflict continues, founder writes scathing article on why he is against the co-founders".

It is reported that at first the two worked together harmoniously, but as the project developed, Ethan gradually disagreed with Jae and distanced himself from him. Under Ethan's operation, the core team resigned, project management became chaotic, and foundation funds were misappropriated. Jae tried to stop it but failed.

He said that Ethan conspired with unknown forces behind the scenes to deliberately infiltrate and sabotage this project. Despite multiple warnings from Jae, the problem has not been resolved, and he believes that action must be taken to correct the situation, otherwise the prospects of the project are worrying.

In fact, according to BlockBeats observation, the root of the controversy caused by this proposal from Cosmos lies in the disagreement of opinions and ideas from the founder to the community. It seems that this cannot be improved in the short term, which will undoubtedly bring more uncertainty to the future of Cosmos. Perhaps Cosmos will eventually end up with a fork, or perhaps there will be more opportunities.

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