Version: Next

`x/mint`

Concepts
State
- Minter
- Params
Minting Methods
Parameters
Events
- BeginBlocker
Client
- CLI
- gRPC
- REST

Concepts

The Minting Mechanism

The minting mechanism in the x/mint module has been redesigned to offer more flexibility. The InflationCalculationFn has been deprecated in favor of MintFn, that can be customized by the application developer. The MintFn function is passed to the NewAppModule function and is used to mint tokens on the configured epoch beginning. This change allows users to define their own minting logic and removes any assumptions on how tokens are minted.

Key features of the new minting mechanism:

Customizable Minting Function: The MintFn can be defined by the application to implement any desired minting logic.
Default Implementation: If no custom function is provided, a default minting function is used.
Epoch-based or Block-based Minting: The mechanism supports both epoch-based and block-based minting, depending on how the MintFn is implemented.
Flexible Inflation: The inflation rate can be adjusted based on various parameters, not just the bonded ratio.

The default minting function, if no custom one is provided, is implemented in the DefaultMintFn. This function is called during the BeginBlocker and is responsible for minting new tokens, implementation details can be found here.

Inflation

Inflation is a key concept in the x/mint module, responsible for the creation of new tokens over time. The inflation rate determines how quickly the total supply of tokens increases.

Key aspects of inflation in the x/mint module:

Dynamic Inflation: The inflation rate can change over time based on various factors, primarily the bonded ratio.
Bounded Inflation: The inflation rate is typically constrained between a minimum and maximum value to prevent extreme fluctuations.
Inflation Calculation: The specific method of calculating inflation can be customized using the MintFn, allowing for flexible monetary policies.

In the default implementation, inflation is calculated as follows:

Inflation = CurrentInflation + (1 - BondedRatio / GoalBonded) * (InflationRateChange / BlocksPerYear)

Provisions

Provisions are the number of tokens generated and distributed in each block. They are directly related to the inflation rate and the current total supply of tokens. The amount of provisions generated per block is calculated based on the annual provisions, which are determined by the inflation rate and the total supply of tokens.

Relation to Inflation

The inflation rate determines the percentage of the total supply of tokens that will be added as provisions over a year. These annual provisions are divided by the number of blocks in a year to obtain the provisions per block.

Usage per Block (default function)

Each block uses a fraction of the annual provisions, calculated as:

Provisions per block = Annual provisions / Number of blocks per year

These provisions are distributed to validators and delegators as rewards for their participation in the network.

Example

For example, if the total supply of tokens is 1,000,000 and the inflation rate is 10%, the annual provisions would be:

Annual provisions = 1,000,000 * 0.10 = 100,000 tokens

If there are 3,153,600 blocks per year (one block every 10 seconds), the provisions per block would be: Provisions per block = 100,000 / 3,153,600 ≈ 0.0317 tokens per block.

These provisions are then passed to the fee collector.

Bonding

Bonding refers to the process of staking tokens in the network, which plays a crucial role in the Proof of Stake consensus mechanism and affects the minting process.

Key aspects of bonding in relation to the x/mint module:

Bonded Ratio: This is the proportion of the total token supply that is currently staked (bonded) in the network.
Goal Bonded Ratio: A target percentage of tokens that should ideally be bonded, defined in the module parameters.
Inflation Adjustment: The bonded ratio is used to adjust the inflation rate, encouraging or discouraging bonding as needed to maintain network security and token liquidity.

State

Minter

The minter is a space for holding current inflation information and any other data related to minting (in the data field)

Minter: 0x00 -> ProtocolBuffer(minter)

x/mint/proto/cosmos/mint/v1beta1/mint.proto
loading...

See full example on GitHub

Params

The mint module stores its params in state with the prefix of 0x01, it can be updated with governance or the address with authority. Note: With the latest update, the addition of the MaxSupply parameter allows controlling the maximum supply of tokens minted by the module. A value of 0 indicates an unlimited supply.

Params: mint/params -> legacy_amino(params)

x/mint/proto/cosmos/mint/v1beta1/mint.proto
loading...

See full example on GitHub

Minting Methods

Epoch-based Minting

Epoch-based minting allows for tokens to be minted at specific intervals or epochs, rather than on every block. To implement epoch-based minting, the MintFn should be designed to mint tokens only when a specific epoch ID is received. The epoch ID and number are passed as parameters to the MintFn.

Block-based Minting

In addition to minting based on epoch, minting based on block is also possible. This is achieved through calling the MintFn in BeginBlock with an epochID and epochNumber of "block" and -1, respectively.

MintFn

The MintFn function is called at the beginning of each epoch and is responsible for minting tokens. The function signature is as follows:

type MintFn func(ctx context.Context, env appmodule.Environment, minter *Minter, epochId string, epochNumber int64) error

How this function mints tokens is defined by the app developers, meaning they can query state and perform any calculations they deem necessary. This implementation in SimApp contains examples of how to use QueryRouterService and the Minter's data.

danger

Note that BeginBlock will keep calling the MintFn for every block, so it is important to ensure that MintFn returns early if the epoch ID does not match the expected one.

Default configuration

If no MintFn is passed to the NewAppModule function, the minting logic defaults to block-based minting, corresponding to mintKeeper.DefaultMintFn(types.DefaultInflationCalculationFn).

The next diagram shows how the DefaultMintFn works:

Calculations

Inflation rate calculation

Inflation rate is calculated using an "inflation calculation function" that's passed to the NewAppModule function. If no function is passed, then the SDK's default inflation function will be used (NextInflationRate). In case a custom inflation calculation logic is needed, this can be achieved by defining and passing a function that matches InflationCalculationFn's signature.

type InflationCalculationFn func(ctx sdk.Context, minter Minter, params Params, bondedRatio math.LegacyDec) math.LegacyDec

NextInflationRate

The target annual inflation rate is recalculated each block. The inflation is also subject to a rate change (positive or negative) depending on the distance from the desired ratio (67%). The maximum rate change possible is defined to be 5% per year, however, the annual inflation is capped between 0% and 5%.

NextInflationRate(params Params, bondedRatio math.LegacyDec) (inflation math.LegacyDec) {
    inflationRateChangePerYear = (1 - bondedRatio/params.GoalBonded) * params.InflationRateChange
    inflationRateChange = inflationRateChangePerYear/blocksPerYr

    // increase the new annual inflation for this next block
    inflation += inflationRateChange
    if inflation > params.InflationMax {
        inflation = params.InflationMax
    }
    if inflation < params.InflationMin {
        inflation = params.InflationMin
    }

    return inflation
}

NextAnnualProvisions

Calculate the annual provisions based on current total supply and inflation rate. This parameter is calculated once per block.

NextAnnualProvisions(params Params, totalSupply math.LegacyDec) (provisions math.LegacyDec) {
    return Inflation * totalSupply
}

BlockProvision

Calculate the provisions generated for each block based on current annual provisions. The provisions are then minted by the mint module's ModuleMinterAccount and then transferred to the auth's FeeCollector ModuleAccount.

BlockProvision(params Params) sdk.Coin {
    provisionAmt = AnnualProvisions/ params.BlocksPerYear
    return sdk.NewCoin(params.MintDenom, provisionAmt.Truncate())

Parameters

The minting module contains the following parameters: Note: 0 indicates unlimited supply for MaxSupply param

Key	Type	Example
MintDenom	string	"uatom"
InflationRateChange	string (dec)	"0.130000000000000000"
InflationMax	string (dec)	"0.200000000000000000"
InflationMin	string (dec)	"0.070000000000000000"
GoalBonded	string (dec)	"0.670000000000000000"
BlocksPerYear	string (uint64)	"6311520"
MaxSupply	string (math.Int)	"0"

Events

The minting module emits the following events:

BeginBlocker

Type	Attribute Key	Attribute Value
mint	bonded_ratio	{bondedRatio}
mint	inflation	{inflation}
mint	annual_provisions	{annualProvisions}
mint	amount	{amount}

Client

CLI

A user can query and interact with the mint module using the CLI.

Query

The query commands allows users to query mint state.

simd query mint --help

annual-provisions

The annual-provisions command allows users to query the current minting annual provisions value

simd query mint annual-provisions [flags]

Example:

simd query mint annual-provisions

Example Output:

22268504368893.612100895088410693

inflation

The inflation command allows users to query the current minting inflation value

simd query mint inflation [flags]

Example:

simd query mint inflation

Example Output:

0.199200302563256955

params

The params command allows users to query the current minting parameters

simd query mint params [flags]

Example:

simd query mint params

Example Output:

blocks_per_year: "4360000"
goal_bonded: "0.670000000000000000"
inflation_max: "0.200000000000000000"
inflation_min: "0.070000000000000000"
inflation_rate_change: "0.130000000000000000"
mint_denom: stake
max_supply: "0"

Transactions

The tx commands allow users to interact with the mint module.

simd tx mint --help

update-params-proposal

The update-params-proposal command allows users to submit a proposal to update the mint module parameters (Note: the entire params must be provided).

simd tx mint update-params-proposal [flags]

Example:

simd tx mint update-params-proposal '{ "mint_denom": "stake" }'

gRPC

A user can query the mint module using gRPC endpoints.

AnnualProvisions

The AnnualProvisions endpoint allows users to query the current minting annual provisions value

/cosmos.mint.v1beta1.Query/AnnualProvisions

Example:

grpcurl -plaintext localhost:9090 cosmos.mint.v1beta1.Query/AnnualProvisions

Example Output:

{
  "annualProvisions": "1432452520532626265712995618"
}

Inflation

The Inflation endpoint allows users to query the current minting inflation value

/cosmos.mint.v1beta1.Query/Inflation

Example:

grpcurl -plaintext localhost:9090 cosmos.mint.v1beta1.Query/Inflation

Example Output:

{
  "inflation": "130197115720711261"
}

Params

The Params endpoint allows users to query the current minting parameters

/cosmos.mint.v1beta1.Query/Params

Example:

grpcurl -plaintext localhost:9090 cosmos.mint.v1beta1.Query/Params

Example Output:

{
  "params": {
    "mintDenom": "stake",
    "inflationRateChange": "130000000000000000",
    "inflationMax": "200000000000000000",
    "inflationMin": "70000000000000000",
    "goalBonded": "670000000000000000",
    "blocksPerYear": "6311520",
    "maxSupply": "0",
  }
}

REST

A user can query the mint module using REST endpoints.

annual-provisions

/cosmos/mint/v1beta1/annual_provisions

Example:

curl "localhost:1317/cosmos/mint/v1beta1/annual_provisions"

Example Output:

{
  "annualProvisions": "1432452520532626265712995618"
}

inflation

/cosmos/mint/v1beta1/inflation

Example:

curl "localhost:1317/cosmos/mint/v1beta1/inflation"

Example Output:

{
  "inflation": "130197115720711261"
}

params

/cosmos/mint/v1beta1/params

Example:

curl "localhost:1317/cosmos/mint/v1beta1/params"

Example Output:

{
  "params": {
    "mintDenom": "stake",
    "inflationRateChange": "130000000000000000",
    "inflationMax": "200000000000000000",
    "inflationMin": "70000000000000000",
    "goalBonded": "670000000000000000",
    "blocksPerYear": "6311520",
    "maxSupply": "0",
  }
}

x/mint

Contents​

Concepts​

The Minting Mechanism​

Inflation​

Provisions​

Relation to Inflation​

Usage per Block (default function)​

Example​

Bonding​

State​

Minter​

Params​

Minting Methods​

Epoch-based Minting​

Block-based Minting​

MintFn​

Default configuration​

Calculations​

Inflation rate calculation​

NextInflationRate​

NextAnnualProvisions​

BlockProvision​

Parameters​

Events​

BeginBlocker​

Client​

CLI​

Query​

annual-provisions​

inflation​

params​

Transactions​

update-params-proposal​

gRPC​

AnnualProvisions​

Inflation​

Params​

REST​

annual-provisions​

inflation​

params​

`x/mint`

Contents

Concepts

The Minting Mechanism

Inflation

Provisions

Relation to Inflation

Usage per Block (default function)

Example

Bonding

State

Minter

Params

Minting Methods

Epoch-based Minting

Block-based Minting

MintFn

Default configuration

Calculations

Inflation rate calculation

NextInflationRate

NextAnnualProvisions

BlockProvision

Parameters

Events

BeginBlocker

Client

CLI

Query

annual-provisions

inflation

params

Transactions

update-params-proposal

gRPC

AnnualProvisions

Inflation

Params

REST

annual-provisions

inflation

params