2.3.4 - Supply Inflation

How annual inflation works.

The total circulating supply of SWAPP inflates at a constant rate of 4% per year. At the end of every day of the Circulation Epoch, the contract calculates how many new SWAPP will need to be minted for that day in order to achieve that rate of inflation.

totalSwappSupply = circulatingSwapp + stakedSwapp dailyInflationRate = (1.04 ^ (1 / 365) – 1) dailyInflationRate =~ 0.0001074597820279

newSwappToday = totalSwappSupply × dailyInflationRate

These new daily inflation SWAPP are not immediately minted. Instead, they are earmarked for distribution to two parties: three quarters (3% inflation) to all active stake shares on that day, and one quarter (1% inflation) to all active, qualified Influencer shares that day. Each active stake is earmarked a fraction of this new SWAPP in proportion to the stake’s shares’ percentage of the total share pool that day. The same apportionment scheme is used for the SWAPP earmarked to qualified CM shares.

An example scenario:

On day X, suppose there are: 100,000,000 total circulating SWAPP 30,000,000 total staked SWAPP 10,000,000 total shares

The total new SWAPP that will be generated this day is then: newSwappDayX = (100,000,000 + 30,000,000) × 0.0001074597820279 newSwappDayX = 13,969.771663627 SWAPP

This new SWAPP is split into two amounts: three quarters for stake shares (i.e. 3% inflation) one quarter for CM shares (i.e. 1% inflation)

Now, suppose user A has an active stake that is 2,000,000 shares. On day X, this user’s stake then gets some SWAPP earmarked for it:

userANewSwappDayX = newSwappDayX × (3/4) × stakeShares / totalShares userANewSwappDayX = 13,969.771663627 × (3/4) × 2,000,000 / 10,000,000 userANewSwappDayX = 2,095.46574954405 SWAPP