Can the Rewards Pool Ever Run Dry or How Does that Work?
In this Post from kounter-fit, a very valid question of someone who has not had access yet to the white paper, which is usually like 80% of new users.
So i decided to make it a post for future reference, i tried to simplify things i don't know if i managed to...
The reward pool is fed from a fixed inflation rate, it means that the blockchian "mints" coins at a fixed rate that is hardcoded and can be changed by consensus of the witness via a hardfork.
So the reward pool comes from a percentual (%) yearly emission of new WLS that will keep feeding the reward pool.
This percentage is usually reduced over the years as for example if initially we have 1000 coins minted and the inflation is 10% then each year 100 new coins will be minted, but as they compound meaning that next year the 10% inflation wil be over 1100 coins the same ten percent will mean 110 new coins, next year will be 10% of 1210 coins and so on...
Eventually the inflation rate is reduced because over about 8 years at 10% rate the amount f minted coins will be double the initial and the inflation feeding the reward pool will be 10% of 2000 coins so the more you mint coins the less they store their value...
It is basic monetary system management.
Quote:
Like most other cryptocurrencies I expect WLS also to have a fixed amount of tokens, right? Or is this an incorrect assumption?
Your premise is incorrect
BTC has a fixed amount that is minted by wasting electricity, here POS and POB proof of stake and proof of brain is what distributes that bottomless pit while mass adoption hapens and we are sure that there are always some rewards minted at a decent rate so everyone gets some and it still keeps value.
Here you have an answer in 269 words for you
Not my picture, just to pt some eye candy on the post
Cross posted from WhaleShares https://whaleshares.io/botman/@nnarvaez/la-calidad-de-mi-blog-esta-bajando-o-reflexiones-sobre-las-onopatopellas-y-la-fonetica
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