Crypto glossary
Token inflation (emissions)
Token inflation is the rate at which a protocol issues new tokens to validators, stakers or users, which dilutes holders who do not receive them.
Token inflation, often called emissions, is the ongoing creation of new units after launch. Proof-of-stake networks mint tokens to pay validators and delegators, DeFi protocols distribute them as liquidity incentives, and games hand them out as rewards. It is usually quoted as an annual percentage of current supply.
Emissions are a deliberate tool: they bootstrap security and usage before fees can pay for them. The question for holders is who receives the new supply. If you stake and earn the issuance, your share of the network stays roughly constant; if you hold idle tokens, your slice shrinks each year, which is why staking yields partly reflect dilution rather than profit.
High inflation can create constant selling pressure when recipients are mercenary farmers who dump rewards. Many projects therefore lower emissions over time, tie them to burns or cap them. A token with several percent of annual issuance needs real demand growth just to keep its price steady.
Example
A proof-of-stake chain issues 7% new tokens a year; a holder who stakes earns roughly that rate, while one who leaves tokens idle in an exchange account sees their share of supply fall by about the same amount.