Jae Kwon, founder of the Cosmos blockchain, said he’s against proposed changes that would introduce liquid staking to the system.
The introduction of liquid staking, which would allow holders of Comos’ ATOM token to use derivative tokens to earn rewards elsewhere, is unjustified, Kwon said in an interview with CoinDesk. Passing what’s known as Proposition 82 would create a dangerous precedent of minting a “scandalous” number of new tokens – ATOM2.0 – to a treasury that is controlled by select insiders.
“The extreme risks of this should be abundantly clear to everyone,” especially given the current contagion in crypto markets caused by the FTX/Alameda collapse, he said.
Cosmos released a white paper in September that proposed major expansions to the utility of the Cosmos Hub – the blockchain that sits at the center of the ecosystem. Voting on the contentious reforms ends Monday, with 2:1 in favor as of Friday.
Read more: New Cosmos White Paper Revamps Cosmos Hub, ATOM Token
“In an ecosystem with one of the most advanced systems of governance like Cosmos, changes affecting the development of the Cosmos Hub and placing its security and dependability at risk, as well as radical changes to its monetary policy, must be thoroughly examined from all angles and broken down into individual components to be assessed one by one – not grouped together in an omnibus white paper proposed by a centralized committee,” Kwon said in emailed comments.
The Cosmos Hub continues to display resilience and economic security because the ATOM tokens are bonded and not earning yield or absorbing losses in a high risk over-leveraged environment, he said.
“We need to ensure that such a harmful division of the Cosmos community does not happen again,” and the way to do this is by the creation of a constitution, he added.
Read more: Coinbase Says It’s Wary of Suggested Changes to ATOM’s Monetary Policy