We recently launched Anthem, our staking platform that seeks to improve the experience of participating in decentralized networks.
Anthem is a powerful tool that provides Cosmos ATOM stakers with financially relevant insights and allows them to manage their staking positions. Users can access historical data for any account on the Cosmos Hub, helping them to figure out how much that account earned while staking and how its balance developed over time.
Try it out yourself with any Cosmos account at https://anthem.chorus.one
Aside from providing historical data for individual users, Anthem’s data also allows us to gain insights into how the Cosmos Hub has developed since launch. This post will focus on analysing and visualizing the first year of staking on the Cosmos Hub.
The Cosmos Hub produced its first block more than a year ago, on March 13 2019 at 11pm UTC. Since then, there were three hard fork upgrades that introduced various changes to how the network operates, all coordinated and approved via the on-chain governance process.
Staking rewards on Cosmos are paid in ATOM tokens, which means the circulating token supply is constantly growing, a fact that some popular crypto data sites routinely ignore. In practice, the circulating supply has increased from 236.2m ATOM at launch to 253.5m ATOM at the time of writing (Apr 4, 2020). The following graph illustrates how total and staked token supply developed:
Looking at this graph, we can already tell that the percentage of supply that is at stake has been growing over time.
The Cosmos Hub has one of the most advanced live staking models. One feature is that changes in staking supply dynamically adjust the network’s issuance rate over time. The issuance rate (in Cosmos: inflation) trends downward up to a minimum of 7% when more than ⅔ of the total supply is staked (more details here). Since this threshold was first breached on the first of July 2019 the ratio never fell below the ⅔ threshold again, leading to the inflation parameter reaching the lower bound of 7% on February 25, 2020.
When charting the staking ratio over time, one can clearly pinpoint the moment when the threshold was first breached:
We see that a large amount of ATOM (almost 20m) was delegated around the 1st of July. This is the Tendermint team delegating their ATOM to a variety of validators (check it out yourself on Anthem).
The chart above also plots changes in the inflation rate and the resulting reward rate. The reward rate is the metric most relevant to stakers. It takes into account that staking rewards are only distributed to those staking. The reward rate signifies the annual growth in holdings that someone delegating their ATOM would expect (before accounting for validator commissions and differences in block times). We can see that at launch the reward rate was relatively high since a smaller portion of the supply was staking. Delegators taking on the risk to stake early were rewarded with a larger portion of the rewards. Then, as the amount of delegated ATOM grew, the reward rate quickly adjusted and has been staying between around 9–11% ever since.
Looking at the historical data, we can also see that the dynamic adjustment did not impact issuance much overall — annual inflation started out at 7%, peaked at 7.68% before the staking ratio threshold was breached, and went back down to 7%, where it stayed ever since.
One final interesting dimension to consider is how many accounts have been created on the chain and how many of those have active stake delegations.
Looking at this data, we can see that both overall accounts and those with an active delegation have been growing steadily. We can clearly see a jump and subsequent growth of accounts when ATOM transfers were first enabled with the launch of cosmoshub-2:
At the time of publishing there are around 16,000 staking accounts on the Cosmos Hub, or roughly 40% of the almost 40,000 accounts on the Cosmos Hub.
These are just a few observations from looking at on-chain data in one of the largest live Proof-of-Stake networks. We will follow up with further insights on networks we support in the future and will potentially add features to explore aggregate data within Anthem.
If you are interested in staking and this kind of data, please help us by taking one minute to answer three questions that will help us to improve the product:
Feel free to reach out to me, @FelixLts on Twitter or Telegram, if you’d like to get access to the raw data used in this analysis.
Support for other Proof-of-Stake networks is coming soon to Anthem — stay tuned for announcements by following us on Twitter or by subscribing to the Chorus One newsletter!
Originally published at https://blog.chorus.one on April 7, 2020.
