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

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

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