diff --git a/.pending/improvements/sdk/3752-Explanatory-doc b/.pending/improvements/sdk/3752-Explanatory-doc
new file mode 100644
index 000000000..1179bf065
--- /dev/null
+++ b/.pending/improvements/sdk/3752-Explanatory-doc
@@ -0,0 +1 @@
+\#3752 Explanatory docs for minting mechanism (`docs/spec/mint/01_concepts.md`) 
diff --git a/docs/spec/mint/01_concepts.md b/docs/spec/mint/01_concepts.md
new file mode 100644
index 000000000..14b2c6abd
--- /dev/null
+++ b/docs/spec/mint/01_concepts.md
@@ -0,0 +1,22 @@
+# Concepts
+
+## The Minting Mechanism
+
+The minting mechanism was designed to:
+ - allow for a flexible inflation rate determined by market demand targeting a particular bonded-stake ratio
+ - effect a balance between market liquidity and staked supply
+
+In order to best determine the appropriate market rate for inflation rewards, a
+moving change rate is used.  The moving change rate mechanism ensures that if
+the % bonded is either over or under the goal %-bonded, the inflation rate will
+adjust to further incentivize or disincentivize being bonded, respectively. Setting the goal
+%-bonded at less than 100% encourages the network to maintain some non-staked tokens
+which should help provide some liquidity.
+
+It can be broken down in the following way: 
+ - If the inflation rate is below the goal %-bonded the inflation rate will
+   increase until a maximum value is reached
+ - If the goal % bonded (67% in Cosmos-Hub) is maintained, then the inflation
+   rate will stay constant 
+ - If the inflation rate is above the goal %-bonded the inflation rate will
+   decrease until a minimum value is reached
diff --git a/docs/spec/mint/01_state.md b/docs/spec/mint/02_state.md
similarity index 100%
rename from docs/spec/mint/01_state.md
rename to docs/spec/mint/02_state.md
diff --git a/docs/spec/mint/02_begin_block.md b/docs/spec/mint/03_begin_block.md
similarity index 100%
rename from docs/spec/mint/02_begin_block.md
rename to docs/spec/mint/03_begin_block.md
diff --git a/x/mint/minter.go b/x/mint/minter.go
index 761d9d1e6..a28e8f447 100644
--- a/x/mint/minter.go
+++ b/x/mint/minter.go
@@ -61,8 +61,8 @@ func (m Minter) NextInflationRate(params Params, bondedRatio sdk.Dec) (
 		Mul(params.InflationRateChange)
 	inflationRateChange := inflationRateChangePerYear.Quo(sdk.NewDec(int64(params.BlocksPerYear)))
 
-	// increase the new annual inflation for this next cycle
-	inflation = m.Inflation.Add(inflationRateChange)
+	// adjust the new annual inflation for this next cycle
+	inflation = m.Inflation.Add(inflationRateChange) // note inflationRateChange may be negative
 	if inflation.GT(params.InflationMax) {
 		inflation = params.InflationMax
 	}