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The annual provisions for inflation are calculated based on the total supply of
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TIA at the beginning of each year. To calculate how many TIA to issue per block,
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Celestia uses the block timestamp rather than the block height since the time
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between blocks can vary and cause actual issuance to be higher than the target.
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TIA inflation started at 8% annually.
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1. Initially, it was set to decrease by 10% every year until reaching a long-term issuance rate of 1.5%.
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2. With the v4 Lotus upgrade ([CIP-29](https://cips.celestia.org/cip-029.html)) in July 2025, the inflation rate dropped from ~7.2% to ~5.0% and was set to continue decreasing by 6.7% every year until it stabilized at 1.5%.
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3. With the v6 ([CIP-41](https://cips.celestia.org/cip-041.html#inflation-schedule-over-time)) upgrade in November 2025, the inflation rate again dropped to ~2.5% and will continue to decrease by 6.7% every year until it stabilizes at 1.5%.
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The diagram below illustrates both the initial inflation rates and those after the v6 upgrade.
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