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x/mint

Contents

Concepts

The Minting Mechanism

The minting mechanism was designed to:

  • allow for a flexible inflation rate determined by market demand targeting a particular bonded-stake ratio
  • effect a balance between market liquidity and staked supply

In order to best determine the appropriate market rate for inflation rewards, a moving change rate is used. The moving change rate mechanism ensures that if the % bonded is either over or under the goal %-bonded, the inflation rate will adjust to further incentivize or disincentivize being bonded, respectively. Setting the goal %-bonded at less than 100% encourages the network to maintain some non-staked tokens which should help provide some liquidity.

It can be broken down in the following way:

  • If the inflation rate is below the goal %-bonded the inflation rate will increase until a maximum value is reached
  • If the goal % bonded (67% in Cosmos-Hub) is maintained, then the inflation rate will stay constant
  • If the inflation rate is above the goal %-bonded the inflation rate will decrease until a minimum value is reached

State

Minter

The minter is a space for holding current inflation information.

  • Minter: 0x00 -> ProtocolBuffer(minter)
proto/cosmos/mint/v1beta1/mint.proto
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Params

The mint module stores it's params in state with the prefix of 0x01, it can be updated with governance or the address with authority.

  • Params: mint/params -> legacy_amino(params)
proto/cosmos/mint/v1beta1/mint.proto
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Begin-Block

Minting parameters are recalculated and inflation paid at the beginning of each block.

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 sdk.Dec) sdk.Dec

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 13% per year, however the annual inflation is capped as between 7% and 20%.

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

// increase the new annual inflation for this next cycle
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 sdk.Dec) (provisions sdk.Dec) {
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:

KeyTypeExample
MintDenomstring"uatom"
InflationRateChangestring (dec)"0.130000000000000000"
InflationMaxstring (dec)"0.200000000000000000"
InflationMinstring (dec)"0.070000000000000000"
GoalBondedstring (dec)"0.670000000000000000"
BlocksPerYearstring (uint64)"6311520"

Events

The minting module emits the following events:

BeginBlocker

TypeAttribute KeyAttribute Value
mintbonded_ratio{bondedRatio}
mintinflation{inflation}
mintannual_provisions{annualProvisions}
mintamount{amount}

Client

CLI

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

Query

The query commands allow users to query mint state.

simd query mint --help
annual-provisions

The annual-provisions command allow 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 allow 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 allow users to query the current minting parameters

simd query mint params [flags]

Example:

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

gRPC

A user can query the mint module using gRPC endpoints.

AnnualProvisions

The AnnualProvisions endpoint allow 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 allow 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 allow 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"
}
}

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"
}
}