The objective of this dashboard is to provide a general overview of the assumptions underlying prop. 848. Precisely, the main focus is related to the sell pressure generated by the rewards obtained from staking.

ATOM's inflation rate is not fixed but varies depending on the staking activity in the network. If the percentage of ATOM that is bonded (staked) is greater than 67%, the inflation rate decreases block-by-block to a minimum of 7% annually. Conversely, if the bond ratio falls below 67%, the inflation rate increases block-by-block up to a maximum of 20% per year. The inflationary mechanism serves as punishment for non-stakers (cfr. Cosmos Token Model). If holders choose not to stake their ATOM, they do not receive staking rewards and their holdings get diluted over time due to inflation. This is because the increased supply from inflation is only distributed to those participating in staking, effectively rewarding them for contributing to the network's security and penalizing those who do not stake.

Staking rewards are not automatically credited to a user's account; they must be claimed manually. To claim staking rewards, a user typically needs to send a transaction on the network with a specific message that indicates they want to withdraw their rewards. On the Cosmos Hub, this process emits a message with the tag "withdraw_rewards," which is a signal that can be easily found within the blockchain's data.

A message is emitted also when users unbond or bond their ATOM.

The panel on the left aggregates these informations. Precisely, it shows the monthly amounts of ATOM withdrawn from staking rewards, bonded and unbonded.

The panel on the left shows the count of unique addresses that withdrawn their staking rewards. This number is compared with the number of unique delegators in the same period.

If the withdrawer stakes new ATOM after the withdraw event - and within the same day - it is counted as a user that re-stake the accrued ATOM to secure the Cosmos Hub.

The upper panel illustrates that the quantity of ATOM withdrawn from staking rewards is minimal when compared to the volume of newly bonded ATOM, suggesting that sell pressure is unlikely to be caused by the issuance of new tokens. The predominant source of sell pressure is instead the significant amount of ATOM being unbonded, while the substantial staked volume is sufficient to offset the impact of newly created tokens.

Moreover, the lower panel indicates that approximately 50% of those who withdraw their staking rewards choose to reinvest them to preserve their overall stake power, which demonstrates a preference for participating in securing the Cosmos Hub.

These insights reveal that the inflationary dynamics of the system are not exacerbating sell pressure, which primarily arises from users opting to unbond their holdings.

To accurately include price considerations in the analysis, it's important to note that when a user requests to unbond their ATOM, it does not immediately become usable due to the unbonding period. This factor must be integrated into our analysis to explore the correlations between price and the corresponding staking activity.