Cosmos Hub ATOM Token and the commonly misunderstood staking tokens — Part Three

The ATOM token

  • The ATOM token is NOT used for all staking / transactions across the entire Cosmos Ecosystem. It is specific to only the Cosmos Hub. The Cosmos hub is one of many hubs / zones within the Cosmos Ecosystem. There are other hubs live today such as IRIS (which has its own token IRIS) and Sentinel due to launch later this month (which has its own token SENT). Each Zone will also have its own token to incentivise validators to secure their zone.
  • Transactions fees paid for the Cosmos Hub Do Not have to be paid using ATOM, a wide selection of different tokens will be able to be used to pay transaction fees such as BTC, ETH etc. The incentive for staking is that you will receive a proportion of these fees in the various currencies depending on the number of ATOMs staked.
  • It is NOT a currency, nor your normal token that you invest in and just HODL on your ledger. It is a staking token used to secure the Cosmos Hub. ATOM is hyper inflationary (which rewards those that stake the token to provide security to the Cosmos Hub and punishes those that don’t stake via decrease in value per ATOM via inflation.
  • The Top 100 Validators which stake the most atoms are selected for validating / creating new transactions

Staking Tokens

Basic Example of how this works

21 Day unbonding period

Slashing

How to choose which Validator to delegate to?

Calculating the values for Cosmos

Current Total Supply:

{
"not_bonded_tokens": "71341288426570",
"bonded_tokens": "170079253911157"
}

Circulating Supply:

How to work out Profit from Staking

Calculate effective reward rate in ATOMs

Calculate effective profit in FIAT terms

Calculate effective profit in BTC terms

Sources for research / Useful Links

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DLT Enthusiast and Writer. Interoperability is key for DLT to achieve its true potential. Avalanche $AVAX, Injective Protocol $INJ and Quant $QNT

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