Cosmos: ATOM token price surges after whitepaper 2.0 cuts supply, boosts security
A new whitepaper has outlined the next step for the Cosmos network beyond its founding principle of being the “internet of blockchains”.
The whitepaper, published on Monday, set out Cosmos’ plan to reposition itself as platform for blockchains to grow a “resilient interchain economy”. It also revealed a new issuance model for its native ATOM cryptocurrency.
ATOM to USD
These upgrades are set to be integrated on 3 October. ATOM surged slightly after the whitepaper was revealed, but more recently its price has started to weaken.
Recent price action
After dropping with the crypto crash in May and June, ATOM has seen a steady rise. From its $5.59 low on 18 June, it climbed above $10 in July and peaked at $16.63 on 16 September and $16.92 on 17 September.
As the whitepaper was released during the Cosmoverse conference in Colombia, ATOM could only muster a high of $14.85 on 26 September, and closed at $13.90 the same day.
At the time of writing on 30 September, ATOM was trading at $12.99, down 9% in the past seven days, but up 9% over the past month.
Potential price drivers
There are a range of updates detailed in the whitepaper that Cosmos is hoping will positively impact ATOM’s price.
Previously, ATOM has been criticised for having inflationary tokenomics. Cosmos has proposed a new issuance model for ATOM to address this, which will gradually decrease the amount of tokens minted over time.
There are two phases for this new tokenomics set up. The transition period releases 10,000,000 ATOM in the the first month, which gradually decreases over the next 36 months.
Then there will be a steady state of 300,000 ATOM released every month afterwards. The whitepaper said:
There are also changes to the staking mechanism of ATOM. It allows investors to easily stake and unstake ATOM through the “liquid staking module”.
The whitepaper added: “A competitive marketplace for liquid staking provision will further improve the consumer experience, driving protocols to compete on several dimensions, including trust minimization and safety”
The interchain vision
Cosmos’ mission revolves on interoperability, by offering an ecosystem of networks and letting blockchains communicate with each other. But Cosmos has said “the needs of the interchain have evolved” and it must now “grow a resilient interchain economy”. It added:
The Cosmos Hub has designed the “interchain allocator” to achieve this. It’s a platform that lets users grow ATOM markets and facilitates interoperability. It is hoping the allocator will allow more economic power and greater capital efficiency on the network.
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