> For the complete documentation index, see [llms.txt](https://docs.blockxnet.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.blockxnet.com/protocol-developers/modules/inflation/concepts.md).

# Concepts

### Inflation <a href="#inflation" id="inflation"></a>

In a Proof of Stake (PoS) blockchain, inflation is used as a tool to incentivize participation in the network. Inflation creates and distributes new tokens to participants who can use their tokens to either interact with the protocol or stake their assets to earn rewards and vote for governance proposals.

Especially in an early stage of a network, where staking rewards are high and there are fewer possibilities to interact with the network, inflation can be used as the major tool to incentivize staking and thereby securing the network.

With more stakers, the network becomes increasibly stable and decentralized. It becomes *stable*, because assets are locked up instead of causing price changes through trading. And it becomes *decentralized,* because the power to vote for governance proposals is distributed amongst more people.

### BlockX Token Model <a href="#evmos-token-model" id="evmos-token-model"></a>

The BlockX Token Model outlines how the BlockX network is secured through a balanced incentivized interest from users, developers and validators. In this model, inflation plays a major role in sustaining this balance. With an initial supply of 1 billion and 20% tokens being issued through inflation each year.

We implement exponential inflation for staking rewards, usage incentives and community pool to support the token model.


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