Stellar Development Foundation proposes to disable inflation mechanism from its protocol

The Stellar Development Foundation (SDF), the non-profit organization that supports the development of the Stellar blockchain network, has proposed to disable the inflation mechanism from its protocol.

The foundation announced the proposal Monday, saying that it is “a good idea” as inflation is not benefiting projects building on the Stellar network. In the network’s inflation mechanism, new lumens (XLM) tokens are added to the network at the rate of 1% each year. Each week, the protocol distributes these tokens to any account that gets over 0.05% of the votes from other accounts in the network that hold a balance of at least 100 XLM.

“A few Stellar ecosystem projects receive enough votes to qualify for inflation, but the good people who vote for those projects are essentially opting out of inflation pools. They’re choosing to make a donation,” the foundation said.

It stressed that it is just a proposal and that Stellar validators will have to vote on it. The foundation has already disabled the inflation mechanism in its version 12 of the Stellar core network and asked validators to decide if they would accept the release. But it "encourages" validators to vote to accept it.