Real vs. Nominal Inflation

Controlled Inflation and Protocol Sustainability

Due to the fact that 60% of annualized inflation is issued as oREST, exercising these perpetual options actually results in treasury revenue at a rate of 75% of REST current market price, per oREST redeemed. The profit (revenue minus operating costs and treasury reserve) is used to return value to token holders through buyback and burn initiatives, reducing total supply growth.

If the REST supply grows by 24.09% in the first year (something possible only if 100% of oREST were redeemed) then 45% of that inflation in dollar terms would be matched by treasury growth. With this capital being used to buyback assets from the market, "real" inflation (inflation net of buybacks) would be 13.45%, without any adverse impacts on end user APR.