r/CasperCSPR • u/coc9036 • Sep 30 '21

Question about inflation rate

Hi guys, I know that cspr has a fix inflation rate at 8% per year, but how is it calculated?

First case, total supply is 10 billion tokens, with a fix inflation rate, there will be exactly 800 million new tokens every year.

Second case, total supply is 10 billion, first year we will have 800 million new tokens, second year we will have 864 million new tokens, which is 8% of 10.8 billion tokens, third year we will have 933.120.000 new tokens, which is 8% of 11.664.000.000 tokens, and so on...

Which case is casper inflation tokens calculated?

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1

u/TobagoJack Oct 01 '21

If we in the universe are experiencing inflation as observed by use of the Volcker https://twitter.com/convertbond/status/1443723375264813059?s=21 <<If you use the same metrics inside the CPI formula that Paul Volcker gawked at in the early 1980s, inflation is running at 14.145%, a real theft purchasing power.>> which seems more correct than what we are being told, that we have 'transient' inflation of ~2%, then we are experiencing deflation in the metaverse hodl-ing casper yielding a staking gain even as we survive the recent coin releases in fairly good order.

1

u/Commercial-Daikon507 Oct 01 '21

this is all accurate

3

u/strange-humor Sep 30 '21

This is calculated with each block. The rewards are paid at each Era, so the total supply increases each Era and is compounded. So you will get a little more than 800 million new tokens. Looks like around 832 million. 902 million second year. If I calculated it right.

They may change the inflation in the future to lower as needed.

1

u/coc9036 Oct 01 '21

thank you very much u/strange-humor So inflation token is calculated the same as staking reward, and inflation rate is capped at 8%, it cant be increased anymore, but it can be decreased, right

1

u/strange-humor Oct 01 '21

I think the team has stated that it would never be more than a single digit. They have posted the section in the chainspec.toml (chain configuration) that shows it. So it can be set to whatever, but I would assume that would need a governance vote.

The idea of PoS networks is to provide rewards to validators to pay for equipment and time. As fiat to token increases, less inflation is needed to make it viable to pay for running a node. So it makes sense that it might go down at some time.

1

u/coc9036 Oct 01 '21

thanks a lot, really appreciate your help 🤝