Update Inflation Info (#6384)

* edits

* edits

* new figure

* feedback Jonas and Kian

docs/general/faq.md

@@ -212,12 +212,11 @@ ten billion) Plancks, meaning that the new DOT was valued at ten decimal places.
 
 ### What is the inflation rate of the DOT?
 
-The inflation rate is approximately 10% per year.
+The inflation rate is approximately 120,000,000 DOT per year.
 
-A portion of the inflation is rewarded to validators for performing their duties, while another
-portion may go directly to the treasury. The exact percentage that goes into both varies and is
-based on the amount of DOT that are staked. Please see the article on
-[inflation](../learn/learn-staking.md/#inflation) for more information.
+The 85% of inflation is rewarded to validators for performing their duties, while the 15% goes to
+the treasury. Please see the article on [inflation](../learn/learn-staking.md/#inflation) for more
+information.
 
 ### Why can't crowdloaned DOT be staked?
 

docs/general/web3-and-polkadot.md

@@ -170,8 +170,7 @@ and work together to improve it.
 
 But from where are those incentives coming from? Polkadot's native token
 [DOT is inflationary](../learn/learn-inflation.md). Inflation is used to pay validators for running
-nodes and reward nominators for providing the necessary stake to secure the network. Depending on
-the staking rate, part of the inflation is diverted to the treasury.
+nodes and reward nominators for providing the necessary stake to secure the network.
 
 ### Governance and Treasury
 

docs/learn/learn-agile-coretime.md

@@ -127,6 +127,7 @@ Coretime is managed through the
 which is deployed on the Coretime Chain. In theory, the Polkadot relay chain can support around a
 hundred cores seamlessly and can support over a few hundred cores through optimizations. Preliminary
 tests ran successfully with 80 cores with 12-second block times.
+[**Coretime revenue sales are burned**](https://app.regionx.tech/?network=polkadot).
 
 ### Coretime Sales
 

docs/learn/learn-inflation.md

@@ -1,104 +1,41 @@
 ---
 id: learn-inflation
-title: Token Inflation
-sidebar_label: Token Inflation
-description: Explanation of Token's Inflation in the Polkadot Ecosystem.
-keywords: [token, DOT, KSM, inflation]
+title: DOT Inflation Model
+sidebar_label: DOT Inflation
+description: Explanation of DOT's Inflation.
+keywords: [token, DOT, inflation]
 slug: ../learn-inflation
 ---
 
 import MessageBox from "../../components/MessageBox"; import "../../components/MessageBox.css";
 
-<MessageBox message="[A simpler inflation model modifiable by OpenGov and a reduction in DOT inflation are currently being discussed.](https://forum.polkadot.network/t/proposal-for-adjusting-polkadots-inflation-system-reducing-issuance-and-complexity/9157)" />
+<MessageBox message="[In November 2024, Polkadot transitioned from a model that led to exponential growth in the token supply (but with a constant inflation rate) to one with linear growth (with a decreasing inflation rate).](https://forum.polkadot.network/t/proposal-for-adjusting-polkadots-inflation-system-reducing-issuance-and-complexity/9157) The constant inflation rate model is still in use for [Kusama](./learn-kusama-inflation)." />
 
-DOT (and KSM) is an inflationary token. Inflation is
-[set to be 10% annually](https://github.com/paritytech/polkadot-sdk/blob/756ccc35e93d1a78e3c71a0e67ae4da5f1d09f69/runtime/polkadot/src/lib.rs#L576)
-on Polkadot (same on Kusama, see
-[here](https://github.com/paritytech/polkadot-sdk/blob/756ccc35e93d1a78e3c71a0e67ae4da5f1d09f69/runtime/kusama/src/lib.rs#L535)).
-Depending on the supply staked and the ideal staking rate (more about this below), part of the
-inflation is distributed to the stakers and part to the
-[treasury](./learn-polkadot-opengov-treasury.md).
-
-:::info
-
-DOT went through [redenomination](./archive/learn-redenomination.md) in 2020 that saw the DOT token
-supply increase by 100 times.
-
-The current token supply can be seen [here](../general/chain-state-values.md#total-issuance).
-
-:::
+DOT is an inflationary token, with
+[**fixed annual expansion of the token supply of 120,000,000 DOT**](https://github.com/polkadot-fellows/runtimes/pull/471),
+of which 15% goes to the [treasury](./learn-polkadot-opengov-treasury.md) and 85% to
+[stakers](./learn-staking.md).
 
 It is essential to understand that the primary objective of inflation is to incentivize network
 participants through
 [Nominated Proof of Stake (NPoS)](./learn-consensus.md#nominated-proof-of-stake) and to grow the
-network through funding the on-chain treasury. There is an opportunity cost of keeping the number of
-tokens idle with the current inflation model as the tokens get diluted over time. Economics and game
-theory suggest that setting an ideal inflation rate is essential for incentivizing the network
-participants as well as the growth of the network, and any deviation from it can have adverse
-effects. Reducing the inflation rate could limit growth, while increasing the inflation rate could
-break the incentive model of the token. Hence, **token inflation rate is not a forever fixed value,
-and inflation can be updated in the future through
-[on-chain governance](./learn-polkadot-opengov.md)** based on thorough tokenomics research.
-
-## Inflation Model
-
-The chart below shows the inflation model of the network. Depending on the number of staked tokens,
-the distribution of the inflation to validators and nominators versus the treasury will change
-dynamically to provide incentives to participate (or not participate) in staking.
-
-There is a [dynamic _ideal staking rate_](#ideal-staking-rate) (in the figure set to 0.6 or 60%)
-that the network tries to maintain. The inflation model will incentivize network participants to
-stake when the _current staking rate_ < _ideal staking rate_ and disincentivize staking when
-_current staking rate_ > _ideal staking rate_. The goal is to have the staking rate meet the ideal
-staking rate. The current staking rate would be the total amount staked in the current era over the
-total token supply, where the total amount staked is the stake of all validators and nominators on
-the network. The ideal staking rate accounts for having sufficient backing of tokens to prevent the
-possible compromise of security while keeping the native token liquid.
-
-![staking](../assets/rewards-inflation.png)
-
-<p style={{textAlign:"center"}}>Source: <a href="https://research.web3.foundation/Polkadot/overview/token-economics">Research - Web3 Foundation</a></p>
-
-- **x-axis**: Proportion of staked tokens
-- **y-axis**: Annualized percentage (inflation and staking rewards, see below)
-- **Blue line**: Annual inflation rate diverted to NPoS, i.e., the total amount of tokens minted to
-  pay validators and nominators. For instance, 0.1 corresponds to 10% of token inflation diverted to
-  stakers. Since annual token inflation is 10%, all inflation is used to pay validators and
-  nominators, and 0% of token inflation is diverted to the treasury.
-- **Green line**: Annual rewards rate for stakers. For instance, 0.2 corresponds to 20% of annual
-  returns on the staked tokens. You can determine the current annual staking rewards rate by looking
-  at the top bar of the staking overview on
-  [the Polkadot Staking Dashboard](https://staking.polkadot.cloud/#/overview).
-
-Assuming that the ideal staking rate is 60%, all of the inflation would go to the validators and
-nominators if 60% of all tokens are staked. Any deviation from the 60% - positive or negative -
-sends the proportional remainder to the treasury. Deviations from the ideal staking rate are
-referred to as _staking inefficiencies_. Thus, the treasury does not receive an inflow of funds from
-inflation when the system staking rate equals the ideal staking rate. See
-[this page](./learn-polkadot-opengov-treasury.md) for more information about treasury inflow
-sources.
-
-For those who are interested in knowing more about the design of the inflation model for the
-network, please see [here](https://research.web3.foundation/Polkadot/overview/token-economics).
+network through funding the on-chain treasury. The token inflation rate can be updated through
+[on-chain governance](./learn-polkadot-opengov.md) based on thorough tokenomics research.
 
-## Ideal Staking Rate
+Below is a 25-year prediction of DOT gross annual inflation (red line) and DOT total issuance (blue
+line), assuming the current fixed inflation rate.
 
-The ideal staking rate can vary between 45% to 75% based on the number of parachains that occupied a
-core (this excludes the system parachains), based on the implementation
-[here](https://github.com/paritytech/polkadot-sdk/blob/cd901764a52edc04a6d22bea3a526def593ab2a7/polkadot/runtime/common/src/impls.rs#L80).
+![inflation](../assets/dot-inflation.png)
 
-Briefly, the ideal staking rate can be calculated as follows:
+Net DOT inflation depends on [treasury burns](./learn-polkadot-opengov-treasury.md) and
+[coretime sales](./learn-agile-coretime.md#agile-coretime-implementation) and thus cannot be
+predicted. Net inflation can be defined as follows:
 
-`0.75 - auction_proportion`
+```
 
-where `auction_proportion` is obtained by computing `min(auctioned_slots, 60) / 300`. The
-`auctioned_slots` are all the auctioned slots (or cores) without the cores for system parachains.
+Net Inflation = Gross fixed inflation - burned supply (treasury + coretime sales)
 
-Assuming there are 50 filled cores, of which five are dedicated to
-[system parachains](./learn-system-chains.md), there are 45 auctioned cores. The
-`auction_proportion` is thus `45 / 300 = 0.15`. The ideal staking rate is `0.75 - 0.15 = 0.6`.
+```
 
-If the amount of tokens staked goes below 60%, then staking rewards for nominators increase,
-incentivizing them to stake more tokens on the network. On the contrary, staking rewards drop if
-staked tokens exceed the ideal staking rate. This results from the change in the percentage of
-staking rewards that go to the Treasury.
+Where `Gross fixed inflation` is the annual inflation of 120M DOT and the `burned supply` is the
+annual burn supply due to treasury burns and coretime sale burns.

docs/learn/learn-kusama-inflation.md

@@ -0,0 +1,97 @@
+---
+id: learn-kusama-inflation
+title: Kusama Inflation Model
+sidebar_label: KSM Inflation
+description: Explanation of KSM's Inflation Model.
+keywords: [token, KSM, inflation]
+slug: ../learn-kusama-inflation
+---
+
+import MessageBox from "../../components/MessageBox"; import "../../components/MessageBox.css";
+
+<MessageBox message="[Learn about Polkadot's native token DOT inflation](./learn-inflation)." />
+
+KSM is an inflationary token. Inflation is set to be 10% annually. Depending on the supply staked
+and the ideal staking rate (more about this below), part of the inflation is distributed to the
+stakers and part to the [treasury](./learn-polkadot-opengov-treasury.md).
+
+:::info
+
+The current KSM token supply can be seen [here](./../general/chain-state-values.md#total-issuance).
+
+:::
+
+It is essential to understand that the primary objective of inflation is to incentivize network
+participants through
+[Nominated Proof of Stake (NPoS)](./learn-consensus.md#nominated-proof-of-stake) and to grow the
+network through funding the on-chain treasury. There is an opportunity cost of keeping the number of
+tokens idle with the current inflation model as the tokens get diluted over time. Economics and game
+theory suggest that setting an ideal inflation rate is essential for incentivizing the network
+participants as well as the growth of the network, and any deviation from it can have adverse
+effects. Reducing the inflation rate could limit growth, while increasing the inflation rate could
+break the incentive model of the token. Hence, **token inflation rate is not a forever fixed value,
+and inflation can be updated in the future through
+[on-chain governance](./learn-polkadot-opengov.md)** based on thorough tokenomics research.
+
+## Kusama Inflation Model
+
+The chart below shows the inflation model of the network. Depending on the number of staked tokens,
+the distribution of the inflation to validators and nominators versus the treasury will change
+dynamically to provide incentives to participate (or not participate) in staking.
+
+There is a [dynamic _ideal staking rate_](#ideal-staking-rate) (in the figure set to 0.6 or 60%)
+that the network tries to maintain. The inflation model will incentivize network participants to
+stake when the _current staking rate_ < _ideal staking rate_ and disincentivize staking when
+_current staking rate_ > _ideal staking rate_. The goal is to have the staking rate meet the ideal
+staking rate. The current staking rate would be the total amount staked in the current era over the
+total token supply, where the total amount staked is the stake of all validators and nominators on
+the network. The ideal staking rate accounts for having sufficient backing of tokens to prevent the
+possible compromise of security while keeping the native token liquid.
+
+![staking](./../assets/rewards-inflation.png)
+
+<p style={{textAlign:"center"}}>Source: <a href="https://research.web3.foundation/Polkadot/overview/token-economics">Research - Web3 Foundation</a></p>
+
+- **x-axis**: Proportion of staked tokens
+- **y-axis**: Annualized percentage (inflation and staking rewards, see below)
+- **Blue line**: Annual inflation rate diverted to NPoS, i.e., the total amount of tokens minted to
+  pay validators and nominators. For instance, 0.1 corresponds to 10% of token inflation diverted to
+  stakers. Since annual token inflation is 10%, all inflation is used to pay validators and
+  nominators, and 0% of token inflation is diverted to the treasury.
+- **Green line**: Annual rewards rate for stakers. For instance, 0.2 corresponds to 20% of annual
+  returns on the staked tokens. You can determine the current annual staking rewards rate by looking
+  at the top bar of the staking overview on
+  [the Polkadot Staking Dashboard](https://staking.polkadot.cloud/#/overview).
+
+Assuming that the ideal staking rate is 60%, all of the inflation would go to the validators and
+nominators if 60% of all tokens are staked. Any deviation from the 60% - positive or negative -
+sends the proportional remainder to the treasury. Deviations from the ideal staking rate are
+referred to as _staking inefficiencies_. Thus, the treasury does not receive an inflow of funds from
+inflation when the system staking rate equals the ideal staking rate. See
+[this page](./learn-polkadot-opengov-treasury.md) for more information about treasury inflow
+sources.
+
+For those who are interested in knowing more about the design of the inflation model for the
+network, please see [here](https://research.web3.foundation/Polkadot/overview/token-economics).
+
+## Ideal Staking Rate
+
+The ideal staking rate can vary between 45% to 75% based on the number of parachains that occupied a
+core (this excludes the system parachains), based on the implementation
+[here](https://github.com/paritytech/polkadot-sdk/blob/cd901764a52edc04a6d22bea3a526def593ab2a7/polkadot/runtime/common/src/impls.rs#L80).
+
+Briefly, the ideal staking rate can be calculated as follows:
+
+`0.75 - auction_proportion`
+
+where `auction_proportion` is obtained by computing `min(auctioned_slots, 60) / 300`. The
+`auctioned_slots` are all the auctioned slots (or cores) without the cores for system parachains.
+
+Assuming there are 50 filled cores, of which five are dedicated to
+[system parachains](./learn-system-chains.md), there are 45 auctioned cores. The
+`auction_proportion` is thus `45 / 300 = 0.15`. The ideal staking rate is `0.75 - 0.15 = 0.6`.
+
+If the amount of tokens staked goes below 60%, then staking rewards for nominators increase,
+incentivizing them to stake more tokens on the network. On the contrary, staking rewards drop if
+staked tokens exceed the ideal staking rate. This results from the change in the percentage of
+staking rewards that go to the Treasury.

docs/learn/learn-polkadot-opengov-treasury.md

@@ -27,12 +27,7 @@ mechanisms:
 
 - **Transaction fees:** 80% of the transaction fees of every submitted extrinsic is diverted to the
   Treasury, while 20% is given to the block producers.
-- **Staking inefficiencies:** the network knows an exogenously determined parameter called ideal
-  staking rate. The APY for stakers (nominators & validators) decreases whenever the actual staking
-  rate is not equal to the ideal staking rate. To keep inflation constant at 10%, the system does
-  not creates less tokens, rather some share of the overall reward for stakers is diverted to the
-  Treasury (more information
-  [here](https://research.web3.foundation/Polkadot/overview/token-economics)).
+- **Inflation:** 15% of DOT annual inflation is directed to the Treasury.
 - **Slashes:** whenever validators and nominators are [slashed](./learn-offenses.md), a share of the
   slashed tokens are diverted to Treasury. They are typically rare and unpredictable events.
 - **Transfers:** everyone can send funds to the Treasury directly. This is a rare event and
@@ -41,8 +36,8 @@ mechanisms:
 The outflow is determined by the following mechanisms:
 
 - **Burned tokens:** at the end of each spend period,
-  [a fraction](../general/chain-state-values.md#treasury-burn-factor) of the available funds are
-  burned.
+  **[a fraction](../general/chain-state-values.md#treasury-burn-factor) of the available funds are
+  burned**.
 - **Treasury proposals & Bounties:** they make up the largest share of outflow tokens to the
   community and need to be approved by governance. Then, payouts occur at the end of a
   [spend period](../general/glossary.md#spend-period).

docs/learn/learn-staking.md

@@ -452,21 +452,8 @@ automatically check if you qualify. For more information, visit the
 - Can choose [multiple validators](../general/chain-state-values.md#maximum-votes-per-nominator)
   which can help to decentralize the network through the sophisticated
   [NPoS system](learn-consensus.md/#nominated-proof-of-stake)
-- 10% inflation/year of the tokens is primarily intended for staking rewards.
-
-When the system staking rate matches with the ideal staking rate, the entire inflation of the
-network is given away as the staking rewards.
-
-The ideal staking rate is a dynamic value - as the number of active parachains influences the
-available liquidity that is available to secure the network.
-
-Any divergence from the ideal staking rate will result in the distribution of a proportion of the
-newly minted tokens through inflation to go to the treasury. Keep in mind that when the system's
-staking rate is lower than the ideal staking rate, the annual nominal return rate will be higher,
-encouraging more users to use their tokens for staking. On the contrary, when the system staking
-rate is higher than the ideal staking rate, the annual nominal return will be less, encouraging some
-users to withdraw. For in-depth understanding, check the
-[inflation](learn-staking-advanced.md#inflation) section on the Wiki.
+- 85% of inflation/year of the tokens is primarily intended for staking rewards. Check the
+  [inflation](learn-staking-advanced.md#inflation) section on the Wiki for more information.
 
 ### Cons of Staking
 

docs/maintain/maintain-guides-validator-payout.md

@@ -184,12 +184,10 @@ This includes the stake of the validator itself plus any stake bonded by nominat
 :::info
 
 Validators set their preference as a percentage of the block reward, _not_ an absolute number of
-DOT. Polkadot's block reward is
-[based on the _total_ amount at stake](../learn/learn-inflation.md#ideal-staking-rate). The
-commission is set as the amount taken by the validator; that is, 0% commission means that the
-validator does not receive any proportion of the rewards besides that owed to it from self-stake,
-and 100% commission means that the validator operator gets all rewards and gives none to its
-nominators.
+DOT. Polkadot's block reward is based on the _total_ amount at stake. The commission is set as the
+amount taken by the validator; that is, 0% commission means that the validator does not receive any
+proportion of the rewards besides that owed to it from self-stake, and 100% commission means that
+the validator operator gets all rewards and gives none to its nominators.
 
 :::
 

polkadot-wiki/sidebars.js

@@ -1001,6 +1001,7 @@ module.exports = {
         "general/kusama/kusama-adversarial-cheatsheet",
         "maintain/kusama/maintain-guides-society-kusama",
         "maintain/kusama/maintain-guides-how-to-validate-kusama",
+        "learn/learn-kusama-inflation",
       ],
     },
   ],