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Earning Free Interest on Your XLM (Lumens)

Submitter: Limitless

Category: Guides / Tutorials - Business / Finance

exhibition Date: 2018-02-13 04:38:32 MST

Last Update: 2018-02-13 07:01:54 MST

Views: 151

Score: 5.00 / 5.00
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URL: https://www.lumenauts.com/explainers/how-inflation-works

Submitter's Comment
What is inflation
The Stellar network has a build-in inflation mechanism which distributes new lumens at a rate of 1% per year. The new coins are added to the network weekly, so each week around 0.0191% of the total current amount of XLM is distributed on the network.
Who gets inflation

The inflation lumens are distributed using a voting mechanism. Any account that gets over 0.05% of the votes, gets a share of the new lumens. The number of votes you have is equal to your balance. So if you have 500XLM you have 500 votes. You can vote for any account you like, but remember, only accounts with more than 0.05% of the votes get their share. That means that an account needs at least 51.8 million votes to get inflation lumens.
Why use a pool

You cannot get a share of the inflation lumens if you posses less than 51.8 million XLM. But we can work together in a pool. If you vote for MoonPool or Lumenauts, they will get a part of the inflation lumens, and pay you back based on your number of votes. The payout is done automatically as soon as we got our share of the inflation lumens, and also your votes are recorded automatically.

How to vote
Voting is done by setting a certain option in your account, called the inflation destination. The value is the account ID you vote for. This account information is public on the network, and they periodically record all account IDs that vote for their pool, together with their balance. The balance is used to calculate the amount of lumens you get when an inflation operation is run on the network, and this amount will be paid to the corresponding account ID.


To join the Lumenaut Community Pool, vote for their inflation destination address:

GCCD6AJOYZCUAQLX32ZJF2MKFFAUJ53PVCFQI3RHWKL3V47QYE2BNAUT

You cannot earn inflation on an exchange (and you should not use exchanges as wallets). Use a Ledger Nano S or create a paper wallet to store your lumens first.

If you have 1,000 Lumens, weekly payout should be about 1,000*0.0019; with comes out to 1.91 lumens.
If you have 2,000 as your balance for the week, you should earn about 3.82 in a week just from setting an inflation address in your wallet.
A balance of 10,000 would earn you 19.1 lumens per week and increasing as the balance gets bigger.

Keywords: cryptocurrency guide stellar lumens gain weekly inflation payout

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