github.com/fibonacci-chain/fbc@v0.0.0-20231124064014-c7636198c1e9/libs/cosmos-sdk/x/mint/spec/01_concepts.md (about)

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     4  
     5  # Concepts
     6  
     7  ## The Minting Mechanism
     8  
     9  The minting mechanism was designed to:
    10   - allow for a flexible inflation rate determined by market demand targeting a particular bonded-stake ratio
    11   - effect a balance between market liquidity and staked supply
    12  
    13  In order to best determine the appropriate market rate for inflation rewards, a
    14  moving change rate is used.  The moving change rate mechanism ensures that if
    15  the % bonded is either over or under the goal %-bonded, the inflation rate will
    16  adjust to further incentivize or disincentivize being bonded, respectively. Setting the goal
    17  %-bonded at less than 100% encourages the network to maintain some non-staked tokens
    18  which should help provide some liquidity.
    19  
    20  It can be broken down in the following way: 
    21   - If the inflation rate is below the goal %-bonded the inflation rate will
    22     increase until a maximum value is reached
    23   - If the goal % bonded (67% in Cosmos-Hub) is maintained, then the inflation
    24     rate will stay constant 
    25   - If the inflation rate is above the goal %-bonded the inflation rate will
    26     decrease until a minimum value is reached