Inflation Dilution
In most PoS networks, new blocks create new tokens, which are paid out to validators and delegators and are referred to as block rewards. These block rewards increase the token supply of the network, hence, they have an inflationary character. A network's inflation rate describes the annualized growth rate of the total current supply at any point in time.
Token holders who do not participate in staking see their funds getting diluted over time by the inflation rate of the respective network. Delegators can secure themselves from getting diluted by staking their tokens.
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Inflation Dilution
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Protocol Mechanics
For better classification, differentiation and comparability of different Blockchain networks, we identified different Protocol Mechanics.
Staking Mechanics
Staking Mechanics refer to the token economics, which is a new branch of the economy that explains the structure of a particular ecosystem in the blockchain sphere. It describes the study, design, and implementation of economic systems built on blockchain technology. Each platform and blockchain application is developed under its own token-economics model.
Proof-of-Stake blockchains not only differ in terms of their 'Protocol Mechanics', but also in terms of certain staking-related parameters, e.g. their reward or inflation rate as well as certain actions that are required by delegators.
