If you are holding XLM you need to be aware of the idea of inflation within the Stellar protocol and subsequently how you can sign-up to an inflation pool to claim what is rightfully yours!

Inflation Mechanism

The Stellar distributed network has a built-in inflation mechanism. New lumens are added to the network at the rate of 1% each year which are distributed on a weekly basis, usually on Tuesdays (Check out the official developer documentation for a more technical details). However, the requirement to be able to claim is that the dividends are only paid out to accounts that hold at least .05% of all lumens in existence (at current circulating supply is ~4,328,914 XLM). So, inflation pools follow a similar concept to mining pools, you can dedicate the vote of the XLM you hold – 1:1 – to a communal pool to be eligible for the weekly payout (don’t worry, none of your lumens ever leave your wallet).

When you actually sign the transaction to join a pool, you will pay the usual 0.00001 XLM transaction fee, much like you do when you add a trust line for a Stellar token or generally when sending and receiving, good thing is that these fees are collected and distributed along with the weekly inflation. Even better, any unclaimed lumens are added back to the fee pool for distribution in the next round (week).

Let’s Sign-up!

Now there are a few different pools that you can potentially sign up to, however as you might have guessed, only one at a single time. For example, there is StellarPool, XLMPool, and my personal choice Lumenaut (not to be confused with Lumenauts – another great Stellar resource in its own right). The former charge a variable fee depending on the amount of stellar you hold, and a 10% flat rate respectively. The Reddit community came together to form Lumenaut and is committed to paying out 100% of the pay-out with no fees.

So, the method to actually signing up can be found in some of the wallets available such as Foxlet. They conveniently boil it down to a one-click interaction. Otherwise if you have your lumens on a Ledger or other hardware wallet like I do, you may need to use the Stellar Laboratory’s Transaction Builder – the Lumenaut site has a step-by-step guide to help you with this.

The popular decentralized exchange StellarX also makes the process easy for you. After you have funded your account and made a trade, your inflation destination will automatically be set to Lumenaut for you.

It may only be 1% return in the grand scheme of things but is a great tool for using transaction fees to help fund future transactions and keep the network turning over.

Now if you’re holding your XLM on a centralized exchange, you may want to read about what their stance on inflation is, if any at all. Probably now is the perfect opportunity to move them – perhaps to a hardware wallet (Ledger have just launched the Nano X for pre-order) or cold storage of some sort.

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