ATOM Tokenomics: Phase 1 Outcomes

Earlier this year, Cosmos Labs kicked off a multi-phase research process to redesign ATOM’s economic model to move ATOM toward sustainability. Following a competitive RFP process, Gauntlet was selected as the quantitative research partner for this work. Today we’re sharing the results of Phase 1: a comprehensive, empirical analysis of ATOM sell pressure, holder behavior, and staking economics. Full Phase 1 Report: Gauntlet: ATOM Inflation and Sell Pressure Analysis Bottom line Phase 1 gives us the empirical foundation we needed, and it points to a more precise problem than “inflation is too high.” Gauntlet’s on-chain analysis shows that ATOM sell pressure is small relative to supply and did not accelerate, that it routes almost entirely through a handful of large holders into centralized exchanges, and that the single largest sell reaction on record came from a governance decision, not a market crash. The strategic read is that staking demand is real and sticky (staking TVL at record highs), and the community’s sensitivity to token-economic changes is itself evidence that inflation is a demand driver, not merely a cost. To be clear: This doesn’t mean that inflation is…

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Very excited to hit this milestone. We’ve been getting the most clarity on how ATOM (and its holders) behave and what kind of ideas, ecosystem, and products they can support. The insights take time but carry a super important value in truly building with and around ATOM, and up, instead of trying to bring products to market that figure out token relationships later.

Moreover, this means the Hub has one more resource to build around that we thought had to be massively reinvented before driving value back to the chain (stake). Overall, the system can improve, yes, and inflation/rewards can be better structured… But stake can be helpful to many use cases beyond security. Excited to develop that up further in Phase 2.

Onwards.

Were there any thoughts on setting a maximum validator commission threshold of 10%?

Whether to set a max commission is more of a question for Phase 2, but it’s not a bad idea and would address a large chunk of the CEX-related commission issues!

RoboMcGobo:

• Dynamic, feedback-driven issuance.

Instead, why don’t you just finish the implementation of the VP tax? CHIPs signaling phase: Vote Power Tax This will achieve several objectives:

-Increase decentralization over time continuously

-Improve validator set health which is a critical issue currently

-Reduce the sell pressure coming from the largest CEX validators

This is a possibility as well! I’ve already raised to Gauntlet that this has been one of the issues that has been proposed in the past, so it’s one of the things we will likely evaluate as part of phase 2.

Another issue that is overlooked is the number of delegators who delegate to validators of centralized exchanges whose commissions are 20-100%… what motivates them? But I know the answer… in fact, many people are still poorly informed about how POS works… Need creating content where you need to explain to young children how it works and why delegating to some validators you don’t actually get anything…

Gauntlet ATOM Sell-Pressure Report: Critical Review Executive conclusion Gauntlet does not identify ATOM’s biggest economic sellers. It identifies wallets that moved ATOM toward addresses classified as exchanges, then frequently interprets that movement as sell pressure. Independent tracing shows that the report’s largest alleged “net sellers” are overwhelmingly Bybit, Coinbase, and Binance operational infrastructure —not eight independent whales. Consequently, its headline conclusion that a small group of large holders distributed 7.56M ATOM is materially overstated. The central accounting problem Gauntlet defines net outflow using selected outflows minus selected inflows, but excludes the enormous `other_in` category from inflows. Category | ATOM | Counted inflows | 19.6M | Excluded `other_in` | 141.4M | Examples from Gauntlet’s own tables: Wallet | Reported net out | Excluded `other_in` | `cosmos1t6h6ypgxs3f7ya7ferhv935rly9znt07dr303m` | 940,496 | 6,186,935 | `cosmos13glngydkznenff8dz8tykvcmhlu7fcsvje7dza` | 913,362 | 7,251,843 | `cosmos104jt09caf8rrcgpf8rnyfaj6s274ezuu2vfp76` | 696,127 |…

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ATOM Genesis Holders: Selling and Distribution Analysis Analysis date: 2026-07-16 Bedrock snapshot: 2026-07-09 Executive conclusion Bedrock’s headline that 208.74M ATOM, or 88.4% of genesis supply, “left the original wallet” is not a measure of selling . It combines sales with wallet migrations, custody changes, staking operations, grants, payroll, OTC transfers, and transfers to successor multisigs. Bedrock also states that it has not indexed the full 2019–2021 transaction history, which prevents it from following most of the largest exits. The strongest current evidence of systematic selling comes from two genesis survivors—not the fully drained wallets: Entity / wallet | Genesis ATOM | Current original-wallet holding | 2026 rewards received | 2026 forwarded out | Interpretation | Dokia Capital — `cosmos14lultfckehtszvzw4ehu0apvsr77afvyhgqhwh` | 10.00M | 9.42M | 1,164,362 | 1,165,000 | High-confidence systematic reward liquidation/off-ramping | Unidentified whale — `cosmos1dtq0y9reqst7d99fd3c7x6dflh4eazm4ha8qqh` | 9.05M | 6.42M | 654,860 | 655,500 | High-confidence systematic reward liquidation/off-ramping |…

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Summary Quick intro: I’m a Data Scientist on the research team at Gauntlet and contributed to the development of this report. We appreciate the depth of the review - it engages seriously with the analysis, and on several points it restates limitations the report already documents, which we take as confirmation that the methodology was framed honestly. We address every claim below, but want to flag one framing correction up front, because it recurs throughout the review: the report never claimed to prove executed spot sales. It measures likelihood-weighted, on-chain routing to exchange-associated addresses, explicitly labeled as a directional indicator of market-facing pressure. Read against that stated scope, most of the review’s stronger conclusions and the report’s own conclusions are closer than the review suggests. Points we agree with • Two rendered addresses were malformed. The review is correct that the published document contained two typographical corruptions: a `z` for `2` in the Bybit Reserves 68 address, and an uppercase `O` for `0` in one HNW address. These were display-layer transcription errors that never touched the underlying analysis, and both are now…

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Phase 1’s finding that inflation still supports staking demand, while sell pressure is concentrated among a relatively small number of large holders, raises an important downside-scenario question for Phase 2. Will the next model publish the effective bonded ratio, validator or stake concentration, and the security budget under different issuance reductions combined with large undelegations? A base case and a stress case—together with the assumptions behind each—would make it easier to evaluate whether lower liquid issuance improves ATOM economics without weakening network security.

It’s been a while since I last posted here, but I wanted to jump in and leave a comment so that different parties don’t spin the narrative to suit their own agenda or distort how investors actually behave. Great analysis by `@Dominator008`. I fully support the critical points raised in this review. The fundamental flaw in Gauntlet’s model is assuming that lowering nominal inflation directly reduces sell pressure, ignoring investor psychology and real-world capital allocation (such as rebalancing into BTC or covering personal expenses). Consider a practical example from an individual investor’s perspective: If my strategy relies on taking yield to finance myself, cover expenses, or diversify into assets like BTC, I will continue cashing out my rewards regardless of whether the APY is 10% or 30%. My withdrawal intent remains unchanged. In fact, lowering the APY can create the exact opposite effect: • Shift in Re-staking Ratio: To maintain my target capital inflow into BTC under a lower APY, I would likely decrease my re-staking contribution (e.g., shifting from a 50% re-stake / 50% cash-out split to a 25% re-stake / 75% cash-out split). • Aggressive Profit-Taking on…

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Before blindly moving forward with Phase 2 and cutting interest rates/APY across the board, I urge the community and developers to pause and carefully consider these behavioral realities. Simply slashing yield is a blunt and lazy fix. There are already brilliant ideas floating around this forum, posted by talented economists, mathematicians, and financial minds, that focus on capital retention and value creation rather than pure yield destruction. None of the concepts below are my own; I am simply surfacing and rescuing these earlier community proposals so they are properly taken into account before taking the easy path: • Fee Burns and Token Sinks (Previously Proposed Idea): Implementing “black hole” mechanisms where network transaction fees and protocol revenue are burned to counter inflation organically. (Credit to the community members who originally proposed this). • Tiered / Step-Up Staking Incentives (Recalling Past Forum Proposals): Structuring staking rewards to dynamically favor long-term holders and those who consistently re-stake, penalizing pure extraction while boosting loyal participants. (Rescued from earlier discussions). • In-Hub Ecosystem &…

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