Introduction

The most heated and perhaps crucial voting in Cosmos governance is underway. Proposal #848 has become one of the most disputed proposals, addressing the ATOM inflation rate. ATOM has one of the highest inflation rates among top cryptocurrencies. While validators and large stakers enjoy the high staking APY resulting from this inflation rate, ATOM investors and HODLers suffer due to the resistance of the ATOM token to growth because of the very inflation rate. Now, Proposal #848 has highlighted the conflict of interests between validators and ATOM holders. The voting for this crucial proposal, which may substantially influence the future of the ATOM token and the Cosmos ecosystem, began 12 days ago and will end in two days. Let's examine the status of votes and make predictions about the results.

What is Proposal #848

Proposal #848 aims to reduce the max_inflation parameter from 20% to 10%, resulting in a decrease in ATOM's current inflation from approximately 14% to 10%. The adjustment also impacts the Staking APR, lowering it from about 19% to approximately 13.4%.

The proposal addresses concerns within the ATOM community regarding the dynamic inflation model currently in place, which fluctuates between a 7% floor and a 20% ceiling based on the bonded or staked ratio. The motivation behind this change is to enhance the sustainability and predictability of the future ATOM supply, potentially benefiting the Atom Economic Zone (AEZ) and IBC DeFi protocols.

Moreover, the proposal considers the impact on network security, validator costs, and suggests a series of proposals to further refine inflation-related parameters.

Status of Votes

So far, more than 160K ATOM holders have participated in this voting, and at the time of writing, 39.3% of votes are in favor, and 35.8% are against. It implies that the battle is serious, and no side is a clear winner yet.

When we look at individual voters and delegators separately, we can see that the individual votes are unanimous in favor of the proposal. However, interestingly, the validator votes so far show a polarized idea: 39% in favor, 32% against, and 28% abstain.

Note: Voting power has not been considered

These sentiments among validators were opposite in the first four days of voting. 

If the voting stops right away, the proposal will be passed; however, a considerable voting power has not been realized yet.

Pending Votes

Out of 180 active validators, only 113 validators (62.8%) have cast their votes so far. Considering voting power, 57% of voting power has been used, and still, 43% is yet to be used. The late participants can be very influential.

To better comprehend the potential impact of pending validator participation, let's examine the distribution of voting power on the Cosmos chain. Currently, a mere seven validators wield nearly 33% of the total voting power and 14 validators do nearly 50%.

Of those 7 top validators, 2 and of those 14 validators, 6 haven't voted yet.

Voting History

Finally, regardless of the result of this voting, we should admit that this proposal is the most disputed and controversial proposal so far in Cosmos governance. While there are still three days left before the end of #848 voting, we can already see that it has surpassed the previous turnout record with 165K participants. It would be a long-time record for the turnout of a vote on Cosmos.

Endnotes

• If you want to see the source of the analysis and monitor the voting, have a look at my analytics dashboard.
• For the result of the proposal, refer to this page.