Prior to Protocol 12, Stellar had a built-in inflation mechanism conceived to allow account holders to collectively direct inflation-generated lumens toward projects built on Stellar.
As the network evolved and grew, it became increasingly clear that inflation wasn’t working as intended — account holders either didn’t set their inflation destination or joined inflation pools to claim the inflation themselves, and the operational costs associated with inflation payments continued to rise — and so a protocol change to disable inflation was proposed, implemented, voted on by validators, and ultimately adopted as part of a network upgrade.
The inflation operation is now deprecated.
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Last updated Nov. 24, 2020