Certainly now the projected interest rate is greater than the expected 5% and if people are not staking their holdings , even more as has already been shown.
Should POS rewards be adjusted to combat inflation...."that old chestnut".......
It is greater by design. Dopecoin POS3 has a static reward of 30 DOPE per block, which leads to ~5% total annual inflation, but these coins are being distributed only between actively staking nodes. As not all the issued coins participate in minting process, so the reward for each node can be much more than 5% of its balance.
A good explanation may be found in a Blackcoin discussion about POS3:
https://www.reddit.com/r/blackcoin/comments/3qoerc/pos_30_whitepaper/Pos 3.0 brings incitement for people to operate online nodes and be active in the staking process.
before 3.0: The best strategy was then to keep your node offline and then only bring it online rarely to get a huge stake payout. People with not many coins got a small stakes while people with lots of coins got large stakes.
after 3.0: You need to run an always online node if you want to get your 1% interest. People with not so many coins will get a much higher stake reward relative to people who have a lot of coins. If you have a lot of coins and stake all the time you will be granted your 1% interest. If you have a lot of coins and do not stake you will be granted 0% interest. If you have not that many coins and stake all the time you will be granted more than 1% especially in situations when not all issued coins participate in the stake process.
You can see the effect of Pos 3.0 in the transaction fee chart after the 6'th of october 2015, transaction fees are evenly distributed to all staked blocks.
https://bitinfocharts.com/comparison/transactionfees-blk.htmlWith Pos 3.0 you will be granted 1.5BLK for each staked block, the chance to stake increase if you have more coins. If you sum up the stake reward for a year you will find that the total stake reward for a year is 1% of the total amount of BLK in existance.
xranby is correct. More than 1%, because 1% reflects the overall expansion of the # of coins in circulation. But not everyone stakes, or does not do so full-time, therefore the stake-minted coins are shared among only a subset of the network: those who participate. Previously you could bank coinage while not staking, and then collect on it during brief periods of staking. That opportunity has been eliminated.
A decreasing reward rate may be considered, it is all open to discussion.
Thanks for helping me straighten out my wallet mess buddy! I have some questions about POS and POS3. I understand that the POS3 staking reward is constant and that it encourages more wallets to be open all the time and staking. Very cool. I'm still fuzzy on exactly how coins are staked and the blocks of coins that are used for staking. It was my understanding that in regular POS each time a block of coins is staked it's divided and that led to problems where wallets became badly fragmented right? Is it the same in POS3? Is there a need from time to time to send all your coins to a new address to make them one whole block again? Also, how is the number of coins that go out on a found block calculated? It seems random from what I've witnessed. Also, is it more efficient to divvy a large sum of coins over multiple wallet addresses to increase the chances of finding a block (this doesn't seem to be the case from what I've observed anecdotally).