Aren’t free deposits inflationary?

person holding white and red card

If verified users are receiving 10,000mdc monthly, won’t inflation rise?

No, because we are tightly controlling the money supply. As unused (e.g. unproductive) money gets removed from the supply at the rate of 12% yearly, this recovered money pays for the monthly deposits of verified users without inflating the money supply.

As your money grows, your unused deposits are also being charged. This means your account will grow automatically, but the growth will get slower and slower as your account size builds, until it reaches an equilibrium of 1,000,000mdc in your account in which the free deposits you receive match the unused money fee that is being removed.

  • If you keep your balance low (e.g., spend or invest your money more quickly), your deposits will remain closer to 10,000mdc monthly. If you let your balance grow too much, a larger portion of your unused balance will be charged a fee.

More

What can affect inflation?

Leave a Reply

Your email address will not be published.