# \[PROPOSAL\] Set Max Inflation at 10% **URL:** \ **Category:** Hub Proposals\ **Created:** [October 21, 2023, 8:44pm UTC](https://forum.cosmos.network/t/proposal-set-max-inflation-at-10/11841 "2023-10-21T20:44:02Z")\ **Posts on this page:** 1\ **Showing post:** 315
**Author:** ![Govmos](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/govmos/32/5806_2.png) [@Govmos](https://forum.cosmos.network/u/Govmos)\ **Post date:** [August 14, 2024, 1:10pm UTC](https://forum.cosmos.network/t/proposal-set-max-inflation-at-10/11841/315 "2024-08-14T13:10:53Z")
> [@vixcontango](#): > > The reason for the 3 week bonding period is because attackers can build an alternative chain and it requires consensus between validators to prevent the alternative chain. For that a 3 week period is provided to build social consensus. Once you introduce timestamping, you can eliminate the “long range” attack because it is clear from the timestamps which is the real chain and thus the bonding period can be reduced dramatically This is indeed a viable solution on the pipeline. This can effectively help reducing the bonding period on the Cosmos Hub, as well as other chains using Babylon’s aggregated time-stamping service. At least now we are discussing potential improvement on rational terms. > [@vixcontango](#): > > why is the bonding goal 67% (or 2/3rds)? Plenty of chains have much lower bonding ratio and haven’t been attacked successfully. At present, Cosmos Hub can have 50% bonding ratio and an attack on it can’t happen This governance parameter can be subject to adjustment based on community consensus, should we identify a need for change. If reducing inflation is a priority, modifying this parameter may yield the desired outcomes. Contrarily, `inflationMax` serves as a safety measure to guarantee staking maintains an appropriate incentive over liquid forms. The importance of incentivizing staking within the Hub stems from its role as a shared security consensus. Consequently, the denominated asset’s staking is crucial for the hub to prioritize security over liquid form utilization as money. The primary function of ATOM is to ensure security. The `GoalBonded` is set at 67% to adjust or maintain inflation as we move above or below this threshold. While the parameter may appear arbitrary, it’s been carefully balanced. We would advise against altering this parameter, given its current equilibrium. The challenge lies in the delayed adoption of liquid staking. > [@vixcontango](#): > > Finally, liquid staking is a hedge fund product. Retail doesn’t want liquid staking because it makes their funds insecure. So then stATOM is really a hedge fund product and let me tell you - hedge funds don’t care about ATOM given that its price is going to zero. Regrettably, the information provided is purely speculative and, with our background in traditional finance, we must emphasize that these statements do not align with our understanding. > [@vixcontango](#): > > The argument that ATOM is overpaying for security with 10% is made by hedge funds. The assertion of overpayment for security is incorrect. We’ve consulted with @effortcapital regarding this misconception. We’ve analyzed the security revenue mechanism as part of our PSS economic modeling ([ICS 2.0 Economics : Partial Set Security (PSS) Financial Model](https://forum.cosmos.network/t/ics-2-0-economics-partial-set-security-pss-financial-model/13956)). This is a complex system involving multiple parameters. The true cost of security should be determined by inflation in combination with the minimum validator fee, which establishes a base revenue for validators and discourages dumping practices. In essence, the validator fee represents the cost to secure the network, as validators are the only entities with operational costs. Stakers, however, receive new tokens as an incentive to stake, rather than hold, as previously described. This constitutes an incentive mechanism, not a revenue source for stakers, which is why stakers often compound their rewards. --- _[View the full topic](https://forum.cosmos.network/t/proposal-set-max-inflation-at-10/11841)._