Cosmos Hub Staking (ATOM)

The Cosmos Hub’s native token, ATOM, is used to stake, pay for transactions, and participate in on-chain governance.

Keplr: https://www.keplr.app/

Alternatively, you can create an ATOM Ledger Hardware wallet.

Initially, ATOM is staked to earn new issuance (“inflationary”) subsidies. It means that the supply of ATOM will increase, and stakers will capture the newly issued ATOM. Generally, you will earn around 10.5% annually on your staked ATOM, but that can change.

Stakers will also capture fees from network transactions, and as Cosmos Hub transaction volume increases, ATOM stakers will earn more than new issuance subsidies. The ATOM tokens also give stakers the right to vote on policy decisions on how the Cosmos Hub will operate and distribute treasury funds.

The main drivers of ATOM’s value could be more than transaction fees. ATOM holders should be able to somehow extract value related to the “assets under management” that the Cosmos Hub secures (via products like DeFi).

In a world of thousands of connected blockchains, credibility could be the scarcest resource, and the Hub aims to be the most credible. Owning staked ATOMs is ownership of the Cosmos Hub, giving ATOM stakers the entitle to set/change the rules of the Hub.

Staking is instant, while it takes 21 days to unstake once you initiate the unbonding process. During this time, you will not earn rewards. When the process is complete, you can transfer/trade your ATOM tokens.

Rewards on the Hub is automatically distributed in each block. Figment is never in control of your rewards. Rewards are liquid, which means you can withdraw your rewards to use at any time, but you will need to delegate them if you want to add them to your existing stake. Reward are not automatically staked.

Your potential rewards depend on validator performance. When your validator is down for over approximately 20 hours (i.e., “jailed”), you will not be earning staking rewards.

The new issuance (“inflation”) rate is around 9% of the total supply. When less than 67% of the supply is staked, the rate gradually increases to a maximum of 20%. When over 67% of supply is staked, the rate gradually decreases to a minimum of 7%. <br><br> Currently, the Cosmos Hub pays delegators roughly 7% rewards in ATOMs per year. The annual inflation rate changes depending on the percentage of the network tokens staked. When less than two-thirds of all tokens are staked, inflation gradually increases up to 20%. When over two-thirds of tokens are staked, the network inflation rate gradually decreases to 7%.

Figment has partnerships with many top-in-class custodians. For inquiries, please contact sales@figment.io. The Cosmos Hub protocol takes control of your ATOM tokens while you are staking. If you unbond your tokens, this process will take 21 days before the protocol returns your tokens to you. While your ATOM tokens are staked, you may participate in on-chain governance by voting on different proposals.