SIP-24: Terminal SNX Inflation


Simple Summary

This proposal will add a perpetual 2.5% APR annual inflation of SNX starting on September 6, 2023, the 235th week on the SNX inflation schedule.

This SIP is the formal spec successor of deltatiger's Draft SIP Proposal #36, specifically pertaining to terminal inflation.


  • Terminal inflation is an important mechanism to keep the SNX protocol stable in perpetuity
  • With the original inflation schedule, weekly inflation drops from 90.1K to 0 on March 13, 2024
  • With inflation smoothing as described in SIP-23, weekly inflation drops below 2.5% on August 30, 2023


Perpetual weekly inflation serves as a mechanism to keep the protocol stable for the long term


Adjust SupplySchedule.sol to account for the following changes:

  • Starting on August 30, 2023, the weekly issuance of SNX tokens will adjust to 2.5% on an annualized basis.
  • This final model, which is based on the origional proposed model, will stay in place until it is stopped or adjusted.

With Inflation Smoothing and 2.5% annual Terminal Inflation: image



Perpetual weekly inflation serves as a mechanism to avoid scenarios that would adversely impact the protocol like:

  • Minters packing up at the same time due to a lack of rewards
  • Synth supply shrinking
  • SNX unlocking to be sold down
  • SNX price dropping
  • sETH LPs getting their income halved and also now dropping in value
  • sETH LPs exiting by withdrawing and converting sETH to ETH
  • sETH getting smashed out of peg
  • Arb pool being unattractive as SNX drops relative to ETH

Test Cases

Standard test cases for Solidity contract compling and deploying onto Ethereum testnets before updating the contract on mainnet.


  • Update and deploy SupplySchedule.sol to Ropsten, Rinkby, and Kovan
  • Update and deploy changes to proxy contracts that reference SupplySchedule.sol on Ethereum testnets
  • Update and deploy SupplySchedule.sol to Ethereum mainnet
  • Update and deploy changes to Ethereum mainnet proxy contracts that reference SupplySchedule.sol

Compounding weekly effects on terminal inflation rate of 2.5% APR

As weekly supply is compounded weekly using a compound formula with a terminal rate of 2.5% APR, the effective rate of inflation compounded weekly over a year is 2.53% APY.


Copyright and related rights waived via CC0.