EOS likely to drop inflation rate from 5% to 1%

EOS is considering dropping its current 5 percent inflation rate all the way down to 1 percent in order to avoid unnecessary funds being accumulated in the network's savings account.

The Ethereum competitor asked its users to decide whether or not the protocol should decrease the annual rate of inflation for its native EOS cryptocurrency.

Posted on EOS Authority, the official proposal seeks to change the current EOS annual rate of inflation from 5 percent to 1 percent.

Inflation is a common occurrence in crypto economics, even Bitcoin has tapering inflation with its block rewards, but few protocols have a fixed rate.

According to EOS, out of its 5 percent inflation, 1 percent is distributed to block producers for running and securing the network.

The other 4 percent of the annual inflation rate is accumulated in the EOS saving account.

The consensus seems heavily inclined towards dropping inflation rate with vote results showing nearly 100 percent of votes in favor of revising the inflation rate.

Until a purpose for all of those tokens is determined, EOS decided to limit the funds that flow into the account by reducing the inflation rate.

After the poll expires, the top 21 block producers will reduce the continuous rate of inflation through a 15/21 multisig, EOS explained.

The official proposal said that the 1 percent inflation rate going to block producers will remain unchanged and that the danger of the savings account becoming an attack vector on the network will be lessened.