cosmos-sdk/x/mint/spec/03_begin_block.md

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# Begin-Block

Minting parameters are recalculated and inflation
paid at the beginning of each block.

## NextInflationRate

The target annual inflation rate is recalculated each block.
The inflation is also subject to a rate change (positive or negative)
depending on the distance from the desired ratio (67%). The maximum rate change
possible is defined to be 13% per year, however the annual inflation is capped
as between 7% and 20%.

```
NextInflationRate(params Params, bondedRatio sdk.Dec) (inflation sdk.Dec) {
	inflationRateChangePerYear = (1 - bondedRatio/params.GoalBonded) * params.InflationRateChange
	inflationRateChange = inflationRateChangePerYear/blocksPerYr

	// increase the new annual inflation for this next cycle
	inflation += inflationRateChange
	if inflation > params.InflationMax {
		inflation = params.InflationMax
	}
	if inflation < params.InflationMin {
		inflation = params.InflationMin
	}

	return inflation
}
```

## NextAnnualProvisions

Calculate the annual provisions based on current total supply and inflation
rate. This parameter is calculated once per block. 

```
NextAnnualProvisions(params Params, totalSupply sdk.Dec) (provisions sdk.Dec) {
	return Inflation * totalSupply
```

## BlockProvision

Calculate the provisions generated for each block based on current annual provisions. The provisions are then minted by the `mint` module's `ModuleMinterAccount` and then transferred to the `auth`'s `FeeCollector` `ModuleAccount`.

```
BlockProvision(params Params) sdk.Coin {
	provisionAmt = AnnualProvisions/ params.BlocksPerYear
	return sdk.NewCoin(params.MintDenom, provisionAmt.Truncate())
```