[Xangle Briefing] EOS inflation reduced from 5% to 1%...EOS finds appropriate inflation after 2 years of experience
https://xangle.io/project/EOS/disclosures/5e553b349c35b7e6ec29bf45
According to crypto disclosure platform Xangle, EOS’ governance voted on decreasing the inflation rate from 5% to 1%. Right after the voting passed, the governance again voted to burn 3.7% of EOS token’s total circulating volume. Such actions can be interpreted as EOS’ efforts to find the proper inflation rate to operate its network ecosystem.
So far EOS has been issuing coins at an annual inflation of 5%. Out of the 5%, 4% were kept in the EOSIO saving accounts, and the rest were distributed to blockchain managers (BPs) for network maintenance costs. Blockchain projects maintain their network by issuing additional coins, hence the inflation, and distributing them as rewards to project participants.
The 5% inflation rate, set by EOS founder Dan Larimer when the EOSIO platform was released, lasted for two years. Today’s decision was made due to the undecided use of the remaining 4% in EOS savings account. For the same reason, 4% of EOS tokens was burned last year.
Despite EOS’ inflation decrease and token burns, its impact on the market price is limited. This is because the 4% in EOSIO savings account was never distributed to the market, leaving the actual circulation untouched.
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