Inflation dilution

Inflation dilution — the shrinkage of every holder’s proportional share of a crypto network as new coins are issued (largely to pay staking rewards). It’s the reason staking headlines mislead: a 7% reward funded by 6% issuance transfers wealth from unstaked to staked holders rather than creating income — the corporate-finance equivalent of paying yourself a raise in newly printed shares of your own company. Always subtract the network’s inflation rate from the nominal staking yield before comparing it to anything.

First used in: 2.5 · The speculative sleeve