# The Steem Inflation RatesteemCreated with Sketch.

in #steemlast year

We all assume that the Steem inflation rate drops by 0.5% per year, but the rate of decline is actually a bit less than that. The FAQ underscores that:

Starting with the network's 16th hard fork in December 2016, Steem began creating new tokens at a yearly inflation rate of 9.5%. The inflation rate decreases at a rate of 0.01% every 250,000 blocks, or about 0.5% per year. The inflation will continue decreasing at this pace until the overall inflation rate reaches 0.95%. This will take about 20.5 years from the time hard fork 16 went into effect.

So by exactly 0.01% every 250,000 blocks, but only by about 0.5% per year.

The about 20.5 years from the FAQ suggests that the annual decease is actually closer to 0.417% but we’d have to crunch the numbers based on block creation to be more accurate.

1440 minutes in a day x 20 blocks created per minute equals 28,000 blocks per day.

Times 365 days equals 10,512,000 blocks per year.

Divided by 250,000 equals 42.048

So when converted to a percentage, the true value for the rate at which Steem inflation decreases is 0.42048% per year.

Except in leap years. 😅

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I admire your eye for details and always consider you a reliable source.

And... you are a nerd. :)

Said in a nice way.

I love it....delving into the numbers to get the facts as opposed to just going on what is posted without merit on here.

It is better the rate is slower....more investment into the platform that way.

I wonder how the printing of SBD changes the equation, if at all.

I believe SBD changes it as it creates the potential for more Steem to be issued in lieu of SBD being burned. However, it is difficult to calculated as the conversion only makes sense if SBD remains pegged to the \$1 valuation. However, there are some that assume that all the SBD is converted at the moment and that just adds to current supply and not future potential supply. The exercise will need to adjust the percentage of the rewards pool issued in SBD (which can also differ given payout options) and assume a ratio per SBD. At current rates, it may increase Steem inflation quite substantially.

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