As you probably know STEEM is an inflationary cryptocurrency. This means that, unlike Bitcoin, STEEM doesn't have a fixed supply. New STEEM is continually being created to reward authors, curators, witnesses and Steem Power holders. In order to calculate how much STEEM is added to the reward pool per day we must first understand how the inflation rate works. So let me explain...

# STEEM inflation

When Steem forked to version 0.16.0 in december 2016, an instantaneous 9.5% inflation rate was set at block 7,000,000. It started at 9.5%, but even the inflation rate itself is not fixed. It decreases at a rate of 0.01% every 250,000 blocks. This narrowing contineous until it reaches a floor inflation rate of 0.95%. This happens on block 220,750,000 and I hope we are all still alive by that time. It will take approximately 20.5 years.

#### Blocks? How does that work?

As you know, STEEM is a blockchain: A chain of blocks. Each block contains data. On the Bitcoin blockchain, for example, each 10 minutes a new block is added to the blockchain. This new block contains the latest Bitcoin transactions. The STEEM blockchain processes all data much faster than Bitcoin does. Instead of a 10 minute 'block time', STEEM has only a 3 second 'block time'. Every 3 seconds a new block is added to the chain which contains everything that happened on the network in that short period of time. Posts, comments, votes, transactions and so on and so forth.

## What is the current STEEM inflation rate?

Now that you understand what blocks are, let's calculate the current STEEM inflation. Here is the formula:

current_inflation_rate = (978 - (head_block_number / 250000)) / 100

*'head_block_number'* is the number of the latest block on the chain. You can find the current value of *'head_block_number'* on https://steemd.com. Let's fill in it.

current_inflation_rate = (978 - (13,387,926 / 250,000)) / 100 = 9.24

The current inflation rate is 9.24%. As said, this decreases at a rate of 0.01% every 250,000 blocks (every 8.68 days).

## How much STEEM is added to the reward pool per day?

Now that we know the inflation rate we can go back to our main question. Here is the formula to calculate the number of STEEM that is added to the reward pool each time a new block is produced (every 3 seconds):

new_steem = ( ( virtual_supply * current_inflation_rate ) / ( 10000 * BLOCKS_PER_YEAR ) ) * CONTENT_REWARD_PERCENT;

*virtual_supply*: The virtual supply is the supply of all STEEM + all SBD if all SBD would be converted to STEEM at the current price. Go to https://steemd.com again to find the current value.*current_inflation_rate*: The value we just calculated.*BLOCKS_PER_YEAR*: A fixed value of 10,512,000. 1 new block every 3 seconds, makes 10,512,000 new blocks annually*CONTENT_REWARD_PERCENT*: 75% goes to authors and curators. 15% goes to witnesses and 10% goes to SP holders.

new_steem = ( ( 252,970,254 * 924 ) / ( 10000 * 10,512,000 ) ) * 0.75 = 1.66769773613 STEEM;

So each time a new block has been produced, 1.668 STEEM is added to the reward pool.

- Every 3 seconds: 1.668 STEEM
- Every minute: 33.354 STEEM
- Every hour: 2,001.237 STEEM
- Every day: 48,029.695 STEEM

# Answer to our question:

About 48,029 fresh STEEM will be added to the reward pool today, but because it depends on multiple factors it might be slightly higher or lower tomorrow.

_{¯\___(ツ)____/¯ Don't miss out on my next post! Follow me @penguinpablo}

inoue (62)· last yearGood post!

randowhale (66)· last yearThis post received a 2.6% upvote from @randowhale thanks to @inoue! For more information, click here!

booster (65)· last yearThis comment has received a 1.04 % upvote from @booster thanks to: @inoue.

minnowbooster (71)· last year@inoue got you a $0.1 @minnowbooster upgoat, nice! (Image: pixabay.com)Want a boost? Click here to read more!

selfvotejustice (59)· last monthThank you for good info, @penguinpable.

Inflation rate was 9.5% 2016.12 hf16, decreasing down to 0.95% 20 years later.

Now around 8-9% ? +1.6 Steem every 3 sec block period, +48000 Steem aday, added to reward pool.

qasimwaqar (58)· last yearI have always found your posts very informative and useful.... thanks for your valuable sharings..

booster (65)· last yearThis comment has received a 0.12 % upvote from @booster thanks to: @qasimwaqar.

lighteye (65)· last yearThank you @penguinpablo, that was very useful information

cryptokraze (69)· last yearThis is real good data thag I came across and I do hope that on next hard fork things will be even better and all steemit will grow even more.

booster (65)· last yearThis comment has received a 0.05 % upvote from @booster thanks to: @cryptokraze.

crypto.girl (51)· last yearI'm confused. If the inflation will decrease from 9.5% to 0.95% and there will be much more users and posts published to that time, people will earn almost nothing, right?

penguinpablo (73)· last yearThe supply of STEEM grows exponential instead of linear. For example:

Besides, the price of STEEM will be much higher 10 years from now :)

sorin.cristescu (66)· 3 months agoCan one sum this up as: "there's about 24 000 000 new STEEM being produced each year" ?

steamsteem (59)· last monthSteem inflation rate decrease roughly from 10% to 1% in 20 years,

but

roughly regardless of the inflation rate decrease, ?

Steem block genration reward is about 1.5 Steem every 3 sec.

about 50 k Steem everyday, 20 M Steem every year ?

while Current total is about 275 M Steem.

Interesting and important point.

pfa (61)· last yearThank you @penguinpablo for the information

kontora (49)· last yearOut of 48,029 the users with the most SteemPower have the biggest say how those STEEM are distributed - that's why earning and holding on to your STEEM and SteemPower is such a desired thing. Thanks again for sharing your blogs @penguinpablo

math-trail (59)· last yearVery good, thank you for explaining the numbers behind the scene.

I'd like to include a link to your article in the next math-trail magazine - hope that's OK with you.

recent edition is here: Math-Trail Magazine N.4 - Best Recent Math Content on Steemit

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To follow curated math content follow @math-trail.

If you wish @math-trail to follow

youthen read this article.Click here for Mathematics forum on chainBB

levelfourtyseven (35)· last yearHoly mathmatics batman!! lol... I'm gonna need to read that a couple more times but well done sir. Thank you for explaining this in such a detailed way.

thomaskikansha (63)· last yearThanks for the information!

veganmoney (43)· last yearWow, that's a lot of new Steem added every day. Good for those who are constantly on the trending feed.

virtualcoin (43)· last yearThat is good information...finally someone spent more then 30 min writing something usefull on steemit. Thanks!

rycharde (59)· last yearGood article.

Just one thing, Bitcoin is also inflationary - current inflation rate is 3.91% per annum (http://www.bitcoinblockhalf.com/) - and will taper towards 0% in 2020. Bitcoin is called deflationary not because it has negative inflation but because its inflation rate is decreasing (yet positive). Steem's inflation rate is also programmed to decrease over time but (wisely) left to be constant just above zero.

Nobody really knows what the reaction will be to Bitcoin when there is nothing left to mine and the "miners"/processors are funded merely from transaction fees. Maybe that controlled experiment will be over and people will gratefully accept the new centralbankcoin.

gamerveda (49)· last yearSolid point on BTC also being inflationary, albeit decreasing at a very quick pace. The transition process for Bitcoin from mining fees to transactions fees should be gradual and organic, not like simply hitting a junction where a moment of decision is required on the spot... that is if we can survive through the upcoming forks of course ;-)

moderninvestor (51)· last yearIm still a bit new here, only been here for exactly 7 days now... what exactly is the reward pool for?

is it something that is evenly divided amongst each steemit user after a certain period?

or is it somthing that is given out to certain people who create a certain amount of content?

thanks in advance for any answer :)

penguinpablo (73)· last yearThanks for your question. I actually should have explained that in my article as well ;)

The reward pool is a virtual pool that contains all STEEM available to be distributed as rewards. To put it short, the more STEEM in the pool, the higher the rewards.

lighteye (65)· last yearDo please edit your post with this added info. Thank you.

moderninvestor (51)· last yearOHHHHHH that makes sense !

and its no worries, your article was excellent, it was just something i was wondering about, thank you very much for the reply :)

susanli3769 (67)· last yearNot that I really care how this is calculated, it's still a very good info to have. thanks for sharing.

freiheit50 (69)· last yearAs always, you were bringing us very useful and experienced information. I only have to say: Chapeau!

gamerveda (49)· last yearWow another wonderful article full of gold! Thank you.

Now one question. After reading your previous article on how the rshare claims work and now seeing how much STEEM is added to the pool, what determines how much of the total available STEEM Pool is actually delivered as rewards per day? Clearly the entire Pool is not emptied on a daily basis so there must be some limit attached to this which allows the pool to be drained without being emptied entirely.

penguinpablo (73)· last yearGood question. In short: The reward pool itself.

The reward pool is used to calculate the value (number of rshares) that is added to a post when the post receives an upvote. The lower the reward pool, the lower the number of rshares that is added. So a lower reward pool eventually reduces the rewards being subtracted from the pool itself.

I hope you understand what I mean. It's quite complicated :S

richatvns (68)· 28 days agoeven a year old a great post!

robi (52)· last yearGreat post! Pretty much per day. Could you explain where the money comes from I'm still not sure about that? What I think is that it comes from ppl who buy STEEM and SBD with BTC.

penguinpablo (73)· last yearThanks :)

Your question is explained in the FAQ: https://steemit.com/faq.html#Where_does_the_value_come_from

robi (52)· last yearThank you!

colinbrazendale (66)· last yearVery clever maths. Thank you for sharing @penguinpablo. I am learning more and more about Steemit day by day. :)

monalishabiswas (44)· last yearGreat pist. Thank u for the information . Have a nice day

randowhale (66)· last yearThis post received a 4.5% upvote from @randowhale thanks to @penguinpablo! For more information, click here!

elbiasto (51)· last yearI m kind of new here and I didn t learn a lot about the Steem distribution ... I m just happy when I get some reward for my posts . In your post you wrote that 10% go to the holders of SP , I already have some Steempower (around 8) and i didn t see any rewards for that so far . So how and when are that 10% distributed ?

penguinpablo (73)· last yearIt is added to all accounts continuously, but there's no place were you can see those rewards. If you're not a big holder of SP it's a very small amount though.

elbiasto (51)· last yearis it added to Steem , Steemdollar or SteemPower balance ?

penguinpablo (73)· last yearTo your Steem Power balance.

It's a bit technical to explain. Actually, SP holders are holders of VESTS. Your SP is calculated by multiplying the amount of VESTS by 483.452 (Current value of 'steem_per_mvests' on steemd.com). By slightly increasing this value overtime all VESTS holders see their amount of SP increasing.

elbiasto (51)· last yearthank you , so I think with my low amount of SP I just didn t see the change.

murattatar (66)· last year48.000 STEEM created daily.. %10 SP holdings.. 4800 STEEM

so. the question is how much whole SP is there in the system?

If whole system has 100 Milion SP and I have 1 Million SP;

I will get 48 STEEM every day. Isnt it?

crachau (48)· last yearTo clarify, each day, some of it gets paid out to people simply holding SP?

penguinpablo (73)· last yearThe reward pool is only used to pay authors and curators. Besides, 10% of the annual inflation will be used as a form of dividend for holders of Steem Power.

crachau (48)· last yearIn the calculation, you said:

CONTENT_REWARD_PERCENT: 75% goes to authors and curators. 15% goes to witnesses and 10% goes to SP holders.

So does that get directly paid to SP holders, or put back in some sort of pool causing an inflationary effect?

penguinpablo (73)· last yearTechnically, SP holders are holders of VESTS. Your SP is calculated by multiplying the amount of VESTS by 483.452 (Current value of 'steem_per_mvests' on steemd.com). By slightly increasing this value overtime all VESTS holders see their amount of SP increasing.

crachau (48)· last yearInteresting... So steem_per_mvests is what increases, which increases the value of held VESTS... Thakn you so much for your insight!

daydreams4rock (62)· last yearso how is it that those with higher influence numbers earn more money ? is it only based on how much SP they have? i would like to see how to earn significant money besides finding a whale curation trial to follow me> anyway i don't mind too much about the money as long as my audience grows in time

penguinpablo (73)· last yearIt is actually the other way around. Users who earn more money are likely to have a higher reputation number and more SP. Having a higher reputation number doesn't automaticly make you earn more money. It depends more on 'building a following' like on other social networks.

daydreams4rock (62)· last yearthanks for your advice -- i am working on better blogs and hope to attract some higher worth votes, in time i hope to help a few less fortunate and newbies get through this minefield

jwolf (69)· last yearThanks for sharing. But if Steem coins are added just like that in pool the price could decrease drastically

markush (62)· last yearSo the 10% is why we receive interest? over our SP?

penguinpablo (73)· last yearYes, that's right.

weetreebonsai (54)· last yearResteemit to share for others to understand how this works! Thank You for sharing this!

katsics (43)· last yearThank you for your good explanation!

francisk (62)· last year@penguinpablo

It takes a little time, but when we follow through with your explanation. It can be understood. In our excitement of Steemit, we blindly have joined without understanding and knowing what all the excitement is about.

Well, I have learned this much. It takes time and work. No exceptions. And that is where the value comes in. Without good content value, it all comes to a screeching halt. My take at least.

And with your good information, which I will study and save your post.

It makes even more sense.

Thank you

Francis

hanshotfirst (75)· last yearThanks for taking the time to break this down so thoroughly.

payam.kianmehr (25)· last yearNice.

blueheaven (54)· last yearIf I follow all information properly then one day I will definitely a good future.

durhamprof (39)· last yearThat is amazing...Thank you for explaining that!

uruiamme (52)· last yearI've been wondering this for awhile. I don't remember seeing this in the Steemit FAQ. Liked the post, great explanation. Resteemed!

raybrockman (70)· last yearThanks for explaining, I am sure this queation has been asked by nearly every newbie.

lig007 (51)· last yearThanks for the post. Eventually I have to assume the sheer amount of steem would push the price down, but its actually gone up in the short term, which I was not expecting

gamerveda (49)· last yearActually, the price shouldn't drop simply because of the inflationary rate. That would assume a static environment. The userbase is growing faster than STEEM can inflate, hence demand for STEEM is also increasing. As a result it'll push the price upwards. Additionally payouts in USD should ideally stabilize to a certain acceptable level forcing the value of STEEM to appreciate to maintain that level as the amount of STEEM payouts declines with the rise of users making claims on it for authoring and curating. All theoretical but it's typically what we see in economies like this.

teamhumble (70)· last yearswimming in a virtual pool of crypto, i'm visualizing robots driven by ai recharging in data pools. maybe that cookie i had with the dutch label on it was not what it seems. . ..

yetaras (72)· last yearThanks for the interesting and informative article. It clarified many things for me!

saved4newlife (51)· last yearOk wow. This was very interesting. I never understood the difference in block chain and how slow Bitcoin was to steem. I'm not saying I grasp all the figures and can't for the life of me understand how you do but wow. That's overwhelming. I'm still trying to understand all of this being a new user but it sure is interesting and very fascinating how all this works. Thanks for the informative post!

beyondthecrypto (61)· last yeari've never been good at math but you nailed it :)

learned something new today Thanks @penguinpablo

murda-ra (56)· last year@penguinpablo

Once again you've nailed it with explanation that is hard to be found, especially in a single post :)

Many thanks for this and for SteemNow.com

Cheers

Luci

gigafart (57)· last yearThe amount of BTC is set to double in August xD

onlymanamana (12)· last yearmanamana

fproductions (66)· last yearkam.ila (62)· last yeargreat explanation! it is important that we all understand what is the main purpose of Steemit!

Thank You for that !

@kam.ila

joshvel (60)· last yearWhat a great information, thanks...upvoted and followed you. I will resteem it also.

angelshare (45)· last yearIt is awesome I never thought for a single post so many things are happening in background. Really superior and awesome technology.

sa6231 (45)· last yearInformative post like it. upvoted

rahmathidayat097 (57)· last yearhy @penguinpablo there is good post, im following you..

p0o (60)· last yearThank you great post.

zimway (35)· last yearWell elaborated... Thank you for taking out your time to do this @penguinpablo. I have upvoted, followed and resteem

cheesebaby (25)· last yearThanks for the helpful explanation. Just one question - why 978? I guess 9.78% was the original inflation rate? If so, why not 9.5% at the time of the fork as you say in Dec 2016?

penguinpablo (73)· last yearThat's right. It was set to 9.78% to make it exactly 9.5% at block 7,000,000.

(978 - (7000000 / 250000)) / 100 = 9.5%

cheesebaby (25)· last yearAh, thanks!

milenamilak (60)· last yearGreat article!

flipstar (68)· last yearI will propaply have to read that 3 or 40 times more to fully understand this

igster (61)· last yearGood information. Wasn't aware of how low the inflation will be in the end.

trevorlyman (54)· last yearThanks! This was one of those pieces of info I've been looking for. :)

mtgmisfit (48)· last yearHey @lumlum85, this is the post I was telling you about. Thoughts?

ana-maria (63)· last yearGreat explanation, @penguinpablo! 👍 - I like it!

I would never have the nerve to find all these out even less to calculate it by myself, but I like to know the result of those equations! 😉😊

timitwist (45)· last yearThat's really interesting, thanks for sharing this with us. 👍

qwasert (48)· last yearHow does the price of Steem rise in value if we keep "Printing" Money? Kinda funny but a serious question. The way I see it, if 10 steem is worth $10 and we make 10 more steem doesn't the value still equal $10, so each steem is now worth half as much? If this is a total noob question, just ignore me.

amirl (63)· last yearGreat info. Deep understanding. Resteemed.

robertchr (51)· last yearGreat that Steem is faster than BTC, but what isn't faster than BTC?.. Not buying anymore BTC until the fees go down, just buying XRP and Steem. But if xrp doesn't do something soon . it will be all steem for me!

tayken (50)· last yearI really appreciate explanatory posts like this and I look forward to seeing more of your content in the future! I just followed you, and I hope you'll do the same so we can connect and continue to evolve and learn from each other! Remember, be yourself, because nobody can do it better -- Full #Steem ahead :)

Follow me @tayken

Much ❤

alexthemagician (56)· last yearThanks for explaining what is thought to be really complicated and difficult to understand so beautifully. Now I know steemit has a 3 second block and everyone is fighting for the daily rewards pool of 48,029 steem ;)

arthursen (47)· last yearNice.

livewell (49)· last yearAwesome, thanks for this info! I am new to the platform and I was just wondering about that earlier today after seeing how much some of the trending posts make. So what happens in 20.5 years when there is no more new Steem being created?

penguinpablo (73)· last yearAfter 20.5 years there is still an inflation rate of 0.95%. The supply will be much larger by that time, so that's still a lot of new STEEM every day.

livewell (49)· last yearAwesome, thanks for your reply =)

authentic (33)· last yearPablo, you are The Don.

:)

blockchainbros (45)· last yearSomeone give us some ideas

monkeygentle (52)· last yearWow! I think I have a long way to go before I understand this stuff but I'm really appreciating posts like this - sharing the knowledge!

david777111 (55)· last yearOk, I have to calculate for inflation too. Thanks.

arthurzee (38)· last yearBrilliant, love these tutorial like posts about steemit, great to share with the new comers. Well done @penguinpablo!

screenname (66)· last yearThis post has been ranked within the top 10 most undervalued posts in the second half of Jul 04. We estimate that this post is undervalued by $51.01 as compared to a scenario in which every voter had an equal say.

See the full rankings and details in The Daily Tribune: Jul 04 - Part II. You can also read about some of our methodology, data analysis and technical details in our initial post.

If you are the author and would prefer not to receive these comments, simply reply "Stop" to this comment.

lazarescu.irinel (61)· last yearThanks for info and Succes!

ashlyncurvey (56)· last yearThanks for sharing @penguinpablo

cryptopizza (40)· last yearpenguinpablo, Thanks for the great information.

andybets (62)· last yearThanks, that's very informative.

I understand that the reward pool is split so a certain amount goes to comments, and wondered if you knew what the percentage is? or maybe it's not a fixed percentage? Would this kind of information be available anywhere, I feel like I might be missing some documentation somewhere?

penguinpablo (73)· last yearThe reward pool is being distributed to authors and curators. There's no split between posts and comments.

https://steemit.com/faq.html#How_is_the_reward_pool_split_between_authors_and_curators

andybets (62)· last yearThank you. I'm not sure where I got that idea from then, perhaps it was discussed but not implemented.

penguinpablo (73)· last yearYes, the idea of a separate comment reward pool was discussed a few months ago, but it was never implemented.

andybets (62)· last yearRight. It's probably just as well IMO. It's hard enough for most users to properly understand what their votes mean already ;) Thanks again.

rest100 (70)· last yearVery helpful and insightful post resteemed up voted an followed

murrayruggiero6 (25)· last yearGreat read learned a lot about Steem!

me-tarzan (77)· last yearpenguinpablo If I understand this correctly Steem is no longer mined but created automatically through inflation directly into the Steemit account Please let me know if this is correct and thank you for your time

penguinpablo (73)· last yearYes, there's no mining, but new STEEM is added to the reward pool every 3 seconds. The reward pool is used to pay the authors and curators of the network.

Blogging is the new mining :)

quantumanomaly (60)· last yearThanks for breaking this down. I appreciate the simple and straightforward look!

kiddarko (67)· last yearNice post. Great info and easy to understand

aeico (57)· 10 months agoHi, I just came across this post and found it interesting. I have a question tho, if a whale decides to have another account, couldnt he just reward himself indefinitely with Steem/SP from the reward pool?

ironshield (61)· 10 months agoSo steemit is sort of like the Federal Reserve, they can print as much STEEM as they want, just so long as it's distributed according to agreed upon rules, via upvotes and such. @ironshield

yairdd (67)· 10 months agoHey! Can I translate this post to Hebrew and post it on @hebrewguides? it's an account dedicated to the new Hebrew speaking Steemit users. and it will really help :)

furryruby (26)· 7 months agoDo you know how the progress , the new STEEM is created and distributed to reward pool, vesting fund and witness, is recorded in the blockchain?

sorin.cristescu (66)· 3 months agoDiscovering this little gem one year later ... On steemd I don't see virtual supply but I do see "current supply" which looks pretty close. Although, if I use it then the actual numbers do not quite fit. Then again, we are in HF 19 so the configuration has certainly changed

10% of the steem created goes to block producers (witnesses). That would be 0.253 SP now per block yet the Top 20 get 0.204 SP instead - probably this has changed in one of the HFs after 16. For block producers outside Top 20 the reward is bigger, at 1.02 SP

15% goes to holders of SP - I don't see an easy way to check that

1.903 steem would then go into the reward pool with each block (if the parameters haven't changed)

pxoc (25)· 2 months agoRead it one year late and I've got a remark/question on the last formula:

Why did you put in 924 and not 9.24 (calculated inflation rate according to your formula) for current_inflation_rate?

robinjohnston (47)· last yearThank you so much for explaining this so clearly. I had no idea about any of this.

isteemit (64)· last yearThis is a brilliant explanation. Your posts are answering the questions that I was seeking a few months back. If only I had found it back then, would have saved me a lot of time :P

Thank you for the post. I'm sure it'll be helpful to many more people to understand the calculations better.