#LUNC “inflation rate” comparison with other POS blockchains 🔥
Ethereum ( #ETH )
- Inflation Rate: Since the Merge in September 2022, Ethereum transitioned to PoS, significantly reducing its issuance. As of March 2025, Ethereum’s inflation rate is near zero or slightly deflationary, depending on network activity. Base issuance is about 0.5-1% annually (around 970,000 ETH minted yearly for a 120 million ETH supply), but this is offset by EIP-1559, which burns transaction fees. In 2024, burns often exceeded issuance, making ETH deflationary at times (e.g., -0.1% to -0.5% annualized during high activity).
- Staking Rewards: Validators earn 4-5% APR, funded partly by issuance and partly by fees. Unlike LUNC, Ethereum balances issuance and burns, aiming for stability rather than aggressive deflation.
- Comparison: Ethereum’s near-zero to negative inflation contrasts with LUNC’s steeper deflation, but both rely on burns to counteract issuance (Ethereum’s burns are activity-driven, LUNC’s are deliberate).
Cardano (#ADA)
- Inflation Rate: Cardano has a fixed maximum supply of 45 billion ADA, with about 36 billion in circulation by March 2025. Its inflation comes from a reserve pool that releases tokens at a declining rate. In 2024, the inflation rate was around 3-4% annually, dropping as the reserve depletes (projected to near 0% by 2030). This translates to roughly 1-1.5 billion ADA added yearly.
- Staking Rewards: Stakers earn ~4-5% APR, funded by this reserve and transaction fees. Cardano’s PoS (Ouroboros) incentivizes participation with predictable inflation, unlike LUNC’s burn-driven model.
- Comparison: Cardano’s positive but decreasing inflation (3-4%) is the opposite of LUNC’s -3.5%, reflecting a growth-oriented design versus LUNC’s supply-reduction focus.
Solana ( #SOL )
- Inflation Rate: Solana starts with a higher inflation rate that decreases over time. As of 2025, it’s likely around 5-6% annually (down from an initial 8% at launch in 2020), based on its schedule (1.5% long-term target). With a circulating supply of ~550 million SOL, this means 27-33 million SOL added yearly. Inflation rewards validators and stakers, with 90% of new issuance going to them.
- Staking Rewards: Staking yields are 5-7%, funded by this inflation plus fees. Solana’s PoS (with Proof-of-History) prioritizes high throughput, accepting higher initial inflation for growth.
- Comparison: Solana’s 5-6% inflation dwarfs LUNC’s -3.5% deflation. Solana inflates to scale, while LUNC deflates to recover value post-crash.
Cosmos ( #ATOM )
- Inflation Rate: Cosmos, also Tendermint-based like LUNC, has a dynamic inflation rate between 7-20%, adjusting based on staking participation. If 67% of ATOM is staked (the target), inflation is 7%; it rises to 20% if staking drops below that. As of 2025, with ~400 million ATOM in circulation and high staking (~60-70%), inflation is likely ~7-10%, or 28-40 million ATOM yearly.
- Staking Rewards: Stakers earn 8-15% APR, funded by this inflation. Cosmos incentivizes security through higher issuance when participation lags, unlike LUNC’s fixed deflation.
- Comparison: Cosmos’s 7-10% inflation is a sharp contrast to LUNC’s -3.5%, highlighting different priorities—Cosmos boosts staking, LUNC reduces supply.
Key Insights and Contrasts
- Deflation vs. Inflation: LUNC is unique among these PoS chains for its deflationary nature (-3.5%) due to burns, while others inflate supply (Ethereum: ~0%, Cardano: 3-4%, Solana: 5-6%, Cosmos: 7-10%). This stems from LUNC’s post-collapse recovery strategy versus the growth/security focus of others.
- Reward Funding:
LUNC’s staking rewards rely on fees and burn taxes, not new issuance, unlike Ethereum (issuance + fees), Cardano (reserve + fees), Solana (issuance + fees), and Cosmos (issuance). This makes LUNC’s model less predictable for stakers but aligns with its deflationary goal.