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The Cosmos cryptocurrency will reduce its inflation

The issuance of the Cosmos cryptocurrency (ATOM) will decline thanks to the approval of a proposal by those involved in the management of the Cosmos Hub network.

The maximum inflation rate of this cryptocurrency, which previously it was 14%, became 10% annually. Something that could favor the increase in its price in the market according to the principle of supply and demand, which suggests that a scarce asset increases in value as its demand increases.

The market greeted this news with optimism. ATOM rose 3.30% in the last seven days and reaches a price of $9.44 at the time of this publicationas seen in the graphic below:

ATOM staged a recovery in the final days of the week after announcing a cut in its inflation rate. Source: CoinMarketCap

According to the recently approved proposal, Cosmos Hub had to pay an inflated price for network security due to the previous inflation rate. Reducing it to 10% would reduce these costs while still allowing block validators to continue making profits.

The relevance of the topic became clear the voting results, in which the Cosmos community participated the most. At the end The result was 41.1% yes votes and 38.5% no votes.

It’s important to mention that The issuance of ATOM is unlimited, unlike Bitcoin where the issuance limit is 21 million coinsand other cryptocurrencies whose code also has a limit set. More than 376 million ATOMs have been issued so far.

The impact of the changes on Cosmos validators

Validation of transactions on the Cosmos network is done through staking, also known as Proof of Stake (PoS). Network users who act as validators are the ones whose profits are mitigated, at least in terms of the amount of ATOM they receive. Well, from now on your APR will be 13.4% and not 19% as before the changes approved in Cosmos Hub.

APR stands for Annual Percentage Interest, which determines the revenue of block validators on Cosmos Hub.

The cosmos describes itself in its website as an ever-growing network consisting of interconnected decentralized blockchains. Cosmos Hub is the main chain of this network, but there are also others that are part of this ecosystem.

In July of the same year, CriptoNoticias reported that USDT, the US dollar-pegged stablecoin issued by Tether, would be launched on the Kava network, part of the Cosmos ecosystem. However, on this occasion Kava’s native cryptocurrency received an upward boostCosmos Hub’s ATOM did not respond to the announcement.

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