ATOM 2.0 concerns

There are concerns regarding the tokenomics proposals of the revamped ATOM project. Whilst the proposed changes seek to redress value capture problems to the ATOM token there are questions around whether the proposals will be of ultimate benefit to stakers of ATOM.

"It has eventually become clarified that the $ATOM generated inflation after the 36 month period will be going to the Treasury and NOT staked holders.

I don’t like sugar coating things so I will say it as it comes straight out of my mind:

Treasury continuing to get the rewards past the 36 months, in my view, demonstrates a lack of confidence in what we will be trying to achieve here and constitutes a paradox. Wouldn’t be surprised if some call it greed down the road.

The point for raising 55-60M $ATOM is to provide a war chest towards facilitating the plan for $ATOM 2.0.

This in turn requires a sacrifice from the community of faithful staked holders that most could be willing to make. This war chest in turn is 15-20% of the supply, not a negligible amount.

Administering this fund will require wisdom, yet the amount should be more than enough to facilitate growth and ensure the sustainability and longevity of Cosmos Hub.

Excluding $ATOM staked holders from receiving the total of rewards after the 36 month period is over, essentially diluting the stake in exchange of a promise of x,y,z shitcoins providing a decent return is both a paradox and absurd.

Cosmos Hub is a PoS network, diluting staked holders is thus a paradox and should be unacceptable by the community. It will disincentivise many from staking and ICS or any of the valuable layers built on top of the network should be bringing additional value, not replace $ATOM as a reward token altogether. Even 1% matters.

The only alternative would be to cap the supply but I believe that would not be viable or reasonable.

To the ones arguing that the returns from other assets will outperform returns from receiving staked $ATOM I say two things:

This demonstrates a fundamental misunderstanding of $ATOM’s potential (especially after 55-60M will have been allocated to the Treasury), and second many people (including myself) may not want to engage in taxable events dumping assets secured by ICS in exchange for $ATOM.

I strongly feel you should resolve this now not in a future Proposal and explicitly state that the rewards go to $ATOM staked holders after the 36 month issuance is over. That is rewards go back to those who backed the hub with their hard earned money and passionate voice for 3+ years and shall continue to after the vote has passed.

Finally a much deeper analysis of the role of Treasury, Councils, their exact role on Governance, their votes and how they are calculated should be demanded by the community towards the Proposers. That is you Proposers should take the time to explain thoroughly. It is not clear to me yet but i think or sense that community’s role could be eliminated or undermined compared to now where all decisions go through governance. It is thus a duty of the Proposers to fully clarify how we will be affected once Prop has passed.

Community should be on their guard during this process." johnniecosmos

This link on the Cosmos forum goes into detail over concerns:

https://forum.cosmos.network/t/proposal-draft-a-new-vision-for-cosmos-hub/7328/38