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How Does Staking Reward Issuance Contribute to Token Inflation?

Staking rewards are new tokens minted by the protocol and distributed to users who lock up their tokens to secure the network or participate in governance. Since these are newly created tokens, they increase the total circulating supply, directly contributing to token inflation.

The DAO treasury must balance the need for high staking incentives with the long-term risk of excessive inflation and dilution.

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