# 5.2 Token Inflation

The final formula represented as above is resulted by inserting the coefficient decided at the 1st GC General Meeting on April 8, 2022, to the formula defined in section 3.3. According to this formula, GC decided to start inflation from 4Q 2022. BORA’s generation calculated according to the formula, there will be a new supply of 3.00 BORAs per block generation period in the first year of implementation. From then on, the speed of BORA generation will decrease by 25% every year over a period of 12 years. In other words, the generation speed will be 3.00 BORA/block in the first year, 2.25 BORA/block in the second year, and grow 25% slower every year. From the 13th year, a certain amount of BORAs per annum will be generated for the operation the GC node and rewarding BORA ecosystem activities, and the supply that remains unspent at the end of each year will go into permanent lock-up.

To recap, the inflation of BORA 2.0 is a D-inflation structure with a 25% decrease rate, and after Year 12, it converges to the minimum supply to sustain the BORA ecosystem.

Based on such principles, running calculations on the inflation rate, the CAGR (Compound Annual Growth Rate) of inflation for the first 15 years is estimated at 1.80% with an annual average inflation rate of 1.76%. Compared to other competitors that record an annual average inflation rate between 3.00% and 4.00%, this is relatively low as below.

Considering alongside the automated permanent lock-up, it is evident that the BORA puts greater focus on maximising the profit of BORA ecosystem participants.

Last modified 7mo ago