In November 2023, the Cosmos Hub community approved the controversial proposal 848, which lowered the maximum inflation rate of the native token ATOM from 20% to 10%. At the time, ATOM’s actual inflation rate was 14%.

The proposal was anticipated to fail, but a surge of last-minute votes and shifts in validator positions led to its passage with 41.1% of the vote, while 38.5% voted against it.

Following the proposal's approval, Cosmos co-founder Jae Kwon, who opposed the results, decided to fork the Cosmos Hub to create AtomOne. To decentralize decision-making regarding AtomOne's genesis, Kwon's company, All in Bits, is launching GovGen.

GovGen Explained:

GovGen, as described by Kwon, was created to gauge the sentiments of those dissenting against proposal 848. It is an independent, governance-only chain set to launch on February 27. Unlike the AtomOne Hub, GovGen is a fork of the Cosmos Hub with minor modifications aimed at decentralizing the genesis of the AtomOne chain, according to Onbloc, a company supporting AtomOne's infrastructure.

Holders of the GOVGEN token, a non-transferable staking token, can vote on proposals within the GovGen chain to determine AtomOne’s initial parameters and token distribution. These tokens will be given to ATOM holders who voted 'NO' or 'NO_WITH_VETO' on the proposal.

Participants in GovGen will be founding members of AtomOne, deciding its specifics before launch. Kwon emphasized using governance voting to shape blockchain development, potentially including splitting or forking proof-of-stake blockchains to maintain their constitutional integrity or introduce innovations. The GovGen chain will initially launch with 30 validators.

Reason for the Fork:

All in Bits argued that proposal 848 "places ATOM on the path to becoming a monetary token," which is a significant departure from its original design that has ensured ecosystem security. Kwon stated that the vote results showed a significant minority wishing to preserve the security features of the ATOM staking model.

All in Bits' blog post highlighted concerns that the proposal could "threaten" Cosmos' foundational principles. Therefore, dissenters believe a fork is necessary to protect the ecosystem’s security.

AtomOne is not intended to compete with Cosmos Hub but to enhance its security by offering a bridge, according to All in Bits.