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Cosmos Co-Founder Jae Kwon Proposes Chain Split and ATOM1 Airdrop

Jae Kwon, co-founder of Cosmos, plans to launch a fork of the Cosmos chain, distributing ATOM1 tokens to existing ATOM holders. This move, spurred by disagreements over inflation reduction, could significantly impact ATOM's market dynamics.

Cosmos Co-Founder Jae Kwon Proposes Chain Split and ATOM1 Airdrop

Cosmos co-founder Jae Kwon has proposed a chain split following the community’s approval of Proposal 848, which lowered ATOM inflation from around 14% to 10%. He is now preparing to launch a fork of the Cosmos chain and plans to distribute ATOM1 tokens to ATOM holders through an airdrop.

Jae Kwon is one of the three co-founders of Cosmos. He is the mastermind behind Cosmos’s consensus algorithm, Tendermint, an essential component without which this blockchain might not have existed. However, his contributions extend beyond this algorithm to numerous other technological innovations within the Cosmos blockchain, including the Cosmos SDK, which is currently used by many other crypto projects. 

While prolonged tensions within the company have likely driven Kwon’s decision to part ways with the current Cosmos team, Proposal 848 may have been the final straw. He strongly opposed inflation reduction, concerned that it would diminish the incentives to stake ATOM.

According to Kwon, inflation is a punishment for not doing your job as an ATOM holder. You should be staking. If you aren’t staking, you don’t deserve to hold $ATOMs.

He also emphasizes his concern that a decrease in the staking ratio could significantly reduce the network’s security.

Without 2/3 staked there is NO IBC SECURITY in the face of HOSTILE TAKEOVERS. If $ATOM IBC isn’t secure, it has NO UTILITY OR PURPOSE.

(actually scratch that, the only purpose is for rugging)

At the time of writing, approximately 64.94% of ATOM tokens are staked, which is already lower than two-thirds.


The controversial Proposal 484 was published following a study on Cosmos’s tokenomics by blockchain research firm Blockworks. The study concluded that Cosmos is overcompensating its stakers. Blockworks estimated that most competing Proof of Stake networks issue staking rewards at a rate of less than 7% when more than 60% of the supply is staked.

Despite Kwon’s opposition, many community members supported the proposal, reasoning that lower inflation typically leads to reduced selling pressure on the token and potentially a higher token price. However, after Kwon made his announcement, the ATOM token’s value dipped by 3%. 

Currently, Jae Kwon is in the process of launching a new network called AtomOne and plans to airdrop ATOM1 tokens to all ATOM holders.

In the midterm, the airdrop could actually have a positive effect on ATOM’s price. People may rush into buying ATOM to receive the ATOM1 airdrop. Given that the founder of AtomOne is basically the person who started Cosmos, the new blockchain will likely have a high market capitalization from launch.

However, the long-term impact of Kwon’s departure is currently uncertain. Some believe it is a definite loss for Cosmos, as he played a significant role in the project’s development, while others think it is very bullish, as it could resolve years of political tension within the team.