I realized recently many people don't understand this and many (including myself) get confused by it and think in terms of "interest" instead of "inflation." Let's break it down a bit.
If you Google for "steem interest" or "steem interest rate" or "steem power interest rate", a post I wrote almost two years ago is still the top result.
It's more accurate to think of this as inflation because the STEEM blockchain is creating new currency all the time. That said, some people still like to think in terms of interest to answer the question "How much will I gain via interest if I hold this token?"
As Steemit, inc announced on November 18th, 2017 the STEEM blockchain inflation is now:
Inflate at 9.5% APR narrowing to 0.95% APR by 0.01% every 250,000 blocks (Roughly 0.5% per year).
Since that rate is decreasing all the time, let's go ahead and calculate what it is right now.
Steem Inflation Rate
current_inflation_rate = (978 - (head_block_number / 250000)) / 100
(from this excellent post by 
Using head_block_number from steemd.com as 22,230,359 we get:
current_inflation_rate = (978 - (22230359 / 250000)) / 100
978 - 88.921436 / 100 = 8.89078564%
So the total STEEM inflation right now is around 8.89%
The STEEM blockchain is creating new currency every block (every 3 seconds) and distributing it as follows:
- 10% to Witnesses
- 75% to authors and curators
- 15% to Steem Power holders
Again, this is from Steemit's blog post.
As I was recently thinking about this, I was a little confused because steemdb was showing different numbers than what I expected:
Speaking with 
So how much money can we make just by holding Steem Power anyway?
At first I thought it was as simple as saying "15% of the total inflation PERCENTAGE goes to Steem Power holders" (that would be 15% * 8.89% = ~1.33%), but that is not correct. It's 15% of the total amount of new token inflation at that time based on how many people hold liquid STEEM compared to Steem Power.
Huge shout out to 
As I mentioned at the end of this old post, I put together a PHP script to save the current Steem Power balance of an account to a text file every five minutes. I used that against 
Raw Data:
1525809471,2018-05-08T14:57:51-05:00,7714361.1336359
1525809680,2018-05-08T15:01:20-05:00,7714362.1056965
1525809988,2018-05-08T15:06:28-05:00,7714363.5358808
Total Steem Power:
7714363.5358808 - 7714361.1336359 = 2.4022449
2.4022449 SP X
------------ = ------------
517 seconds 86400 * 365
X = 146532.292391489361702 SP
7714361.1336359 + 146532.292391489361702 = 7860893.426027389361702
7860893.426027389361702
------------------------ = 1.018994741087837
7714361.1336359
1.899474%
So the actual rate we're seeing is 1.899% APR at this time (note, that will decrease over time).
So if you have 50,000 Steem Power as an example, you'll get ~949.7 SP a year or ~18.3 SP a week. This shows up automatically in your wallet without any transfers at all.
How does that happen?
I'm glad you asked. Now we get to nerd out a bit about how the STEEM blockchain works under the hood. You may have heard the term "VESTS" or "MVESTS" and scratched your head. The official developers documentation glossary describes VESTS as:
Vests is underlying token that STEEM is derived from, and are share in Steem Power
If you look at the global properties of the STEEM blockchain (steem_per_mvests which at the time of this post is:
"steem_per_mvests": 491.20620385283575615
That means that 1 million VESTS are equal to ~491 STEEM.
That's how you get more Steem Power in your wallet without any transaction taking place. If you have 1 million VESTS today, in one year, that conversation rate will change by ~1.899% so the same amount of VESTS will be worth more STEEM.
For example, next year the steem_per_mvests will be closer to ~500.
Back to our example above, if we have 50,000 Steem Power today, under the hood we really have 101,790,245.33448255 VESTS (or 101.790245 MVESTS) which we get by taking 50,000 and dividing by steem_per_mvests. Next year, if we did nothing else but hold our Steem Power, we'd still have the same amount of MVESTS, but the conversion rate would have changed. So we'd have 101,790,245.33448255 * 500.536538515759653 / 1,000,000 = 50,949.7 Steem Power.
I hope you found that interesting, and if you didn't previously know, now you do: Just by holding Steem Power, you can increase your STEEM holdings.
Okay, so now let's dig into the actual code that makes this happen and why we can't just say, "Hey, what's the current inflation rate of STEEM?" (~8.89%) and then say "Okay, so I heard 15% of that goes to Steem Power." The current inflation rate is based off the number of blocks and virtual steem, not actual VESTs.
Starting here with process_funds() in database.cpp and pulling in some variables we need:
"STEEM_BLOCKS_PER_YEAR": 10512000,
#define STEEM_BLOCKS_PER_YEAR (365*24*60*60/STEEM_BLOCK_INTERVAL)
/**
* At block 7,000,000 have a 9.5% instantaneous inflation rate, decreasing to 0.95% at a rate of 0.01%
* every 250k blocks. This narrowing will take approximately 20.5 years and will complete on block 220,750,000
*/
int64_t start_inflation_rate = int64_t( STEEM_INFLATION_RATE_START_PERCENT );
int64_t inflation_rate_adjustment = int64_t( head_block_num() / STEEM_INFLATION_NARROWING_PERIOD );
int64_t inflation_rate_floor = int64_t( STEEM_INFLATION_RATE_STOP_PERCENT );
int64_t current_inflation_rate = std::max( start_inflation_rate - inflation_rate_adjustment, inflation_rate_floor );
auto new_steem = ( props.virtual_supply.amount * current_inflation_rate ) / ( int64_t( STEEM_100_PERCENT ) * int64_t( STEEM_BLOCKS_PER_YEAR ) );
auto vesting_reward = ( new_steem * STEEM_VESTING_FUND_PERCENT ) / STEEM_100_PERCENT; /// 15% to vesting fund
To find the real inflation rate, we have to figure out how much new STEEM is created with each block (every 3 seconds). I used some values at the time I ran through this.
We'll need the virtual_supply number from the global properties which is the sum of all the STEEM plus all the SBD if it was converted to STEEM at the current price (note, this is based on the blockchain price of SBD which is $1 USD, not the market price of SBD).
virtual_supply = 271750869.726
The code above gives us the formula for finding how much new STEEM is created per block:
new_steem = (271750869.726 * .0889078564) / 10512000
new_steem = 2.298400618547785 (per block)
VEST Rewards:
2.298400618547785 * .15 = 0.344760092782168
From that we can get 0.34476 STEEM per block goes to VEST holders. Depending on what percentage of the total VESTS you hold, you'll get your share of that amount.
Back to the
There are a lot of variables going into all this including how much SBD there is which impacts the virtual supply and how many people are powered up or in liquid STEEM (fewer people powered up means your share of the VESTing rewards will go up).
Don't worry if you head hurt a little bit going through all that. It's confusing stuff, and it took me way too long to wrap my head around this (again). I work on posts like this to help explain complicated things in simple terms and so I can go back and find my old posts later to explain things to myself. :)
