cosmos-sdk/docs/spec/mint/begin_block.md

Begin-Block

Inflation occurs at the beginning of each block, however minting parameters are only calculated once per hour.

NextInflationRate

The target annual inflation rate is recalculated at the first block of each new hour. 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/hrsPerYr

	// 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

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