How Does the Inflation Rate of a Token Impact the Real Return from Staking Rewards?
The inflation rate of a token directly impacts the real return from staking rewards. If the nominal staking yield (the percentage of new tokens earned) is lower than the token's inflation rate (the rate at which new tokens are created), the staker's proportional ownership of the network and the purchasing power of their rewards will decrease.
The "real return" is the nominal yield minus the inflation rate. Investors must seek a yield that significantly exceeds the inflation rate to maintain or grow their economic share.
