Tokenomics idea n°1

Tokenomics idea n°1 [DRAFT]: ATOM Lock-Based Staking + Narrowed Inflation Band (2%–6%) + LSM improvement 1. Summary This proposal introduces a lock-based staking system for ATOM, combined with a reduction of the inflation range from 7–10% down to 2–6%. The goal is to strengthen network security, stabilize monetary policy, and better align incentives between stakers and the Liquid Staking Module (LSM) over a longer time horizon. A key point is that ATOM inflation continues to penalize non-stakers: choosing not to stake results in a natural dilution of their relative share of the total supply. However, thanks to the redistribution mechanism based on lock duration, stakers capture a larger portion of the inflation. This means that even if the ATOM unit price decreases, as long as the overall market cap remains stable, stakers are protected: • their relative share of the supply increases, • their rewards offset dilution, • and their net economic position remains stable or improves. This model preserves the existing bounded ratio mechanism (target at 66%) and ensures that inflation stays dynamic, but within a narrower and more sustainable band. 2. Current…

Excerpt (1190 of 8819 characters). Read the whole post on the forum ↗

is it possible to do a change with distribution via time locking: for instance if holder locks tokens for 12 months, he should get additional apy after this period. that means you get tokens delayed and thus these tokens do not appear on the sell side.

Imagine half holders choose for longer term (for instance 2 years or even 5 years) and their tokens are really then out of the sellling equation for the choosen time period.

So you do not just lock core tokens but also stake-award tokens.

Imagine you would get 5x tokens as supposed if you lock the tokens for 3 or 5 years.

Elon thing.

Hello, this is my first post here. I have carefully reviewed this proposal alongside your parallel signaling proposal regarding the Nakamoto Coefficient. When viewed together, a critical logical flaw emerges that undermines the goal of decentralization. You propose a “Nakamoto Bonus” to support small validators. However, in this proposal (Section 7), you suggest reducing the active set to 80–120 validators to “counterbalance” the revenue drop from lower inflation. The math implies the following scenario: 1.Exclusion: Validators ranked 121–180 (the true “small” validators) are forcibly removed from the active set. 2.Consolidation: The promised “Nakamoto Bonus” will effectively be distributed only among the survivors (ranks ~50–100), who are already mid-sized entities. 3.Barriers: The combination of drastically lower inflation (2-6%) and a mandatory self-bond creates a financial barrier that prevents new, independent community validators from ever entering the set again. This does not look like a plan to save decentralized validators. It looks like a plan to purge the bottom 40% of the network and redistribute their incentives to the middle class of validators to secure…

Excerpt (1197 of 1345 characters). Read the whole post on the forum ↗

The vision of Cosmos Labs is to make the Hub significantly more performant, notably by reducing the validator set in order to support applications and products aimed at institutional users. Achieving this goal requires a substantial improvement in the Hub’s overall performance.

The Nakamoto Bonus plays an important role in this process: it does not redistribute specifically toward the very smallest validators, but rather rebalances stake in a weighted manner from larger to smaller validators whenever a meaningful spread emerges. In other words, as soon as there is a discrepancy in stake distribution, the mechanism activates.

It’s also worth emphasizing that removing the last 50 or even 100 validators would have virtually no effect on the actual decentralization of stake. As far as I recall (though I haven’t checked the exact numbers), compromising the top 20 validators would already be enough to surpass 66% of the voting power. Real centralization risk lies at the top of the set, not among the smallest validators.

Thanks for the honest clarification.

So, the core argument is that we should sacrifice the “long tail” of independent community validators to optimize the chain for “institutional users.”

You argue that removing the bottom 50-100 validators has “virtually no effect.” I disagree.
1.Jurisdictional Resilience: The “tail” often contains the most geographically diverse and censorship-resistant nodes, unlike the compliant “institutional” top-20.
2.The Nursery Effect: Today’s top validators started as small ones. By cutting off the bottom, you destroy the pipeline for future talent and innovation.

If the goal is to turn the Hub into a corporate-efficient chain for institutions at the expense of the community ecosystem, then this proposal makes perfect sense. But we should be honest that this is a pivot away from the Cosmos ethos.

I completely agree with your points. Personally, I’was not in favor of sacrificing the validator set but I changed my mind. The ICF should soon introduce a delegation program aimed at increasing stake decentralization. I imagine their criteria will focus on selecting the best validators, uptime, governance participation, consumer-facing services, PSS chain validation, involvement in IBC relaying, and so on. @RoboMcGobo

I’m also expecting delegations that take geographical decentralization into account, which I believe is a crucial factor.

So yes, I fully share the concerns you raised. We need to work with these constraints and find the best possible compromise between performance and decentralization.

Thanks for the constructive reply. It clarifies the context regarding the upcoming delegation program.

From my perspective, the Hub’s primary challenges remain technical and business-oriented: driving real revenue and utility. Tokenomics adjustments and set reductions are secondary to achieving that product-market fit.