Osmosis ended OSMO inflation on October 25, 2026, when the on-chain proposal “End OSMO Inflationary Emissions” passed and the protocol’s mint module stopped issuing new tokens. The first daily epoch after passage minted zero OSMO. The change is a supply-side reset, not a price story: it decides where staking rewards come from and how much OSMO can enter circulation from here, which matters more than the single-day repricing that followed.
The mint module before the vote
Osmosis minted OSMO through a Cosmos SDK mint module that issued about 121,766 tokens each day. Only part of that ever reached the market. Eight percent, roughly 9,740 OSMO a day, went to staking rewards; 25 percent, roughly 30,440 OSMO a day, went to the developer vesting release; and the remaining 67 percent, roughly 81,580 OSMO a day, went to the community pool. That community-pool share was a soft burn: minted, then parked out of circulation. In practice only the staking and developer allocations, about 40,000 OSMO a day, entered the open market.
What the proposal actually changed
Proposal 1053 sets the mint module’s minting_rewards_distribution_start_epoch parameter to 100,000,000. At one epoch per day that value is never reached, so the module never mints again. It also sets distribution_proportions to 100 percent community pool, zeroing the staking, pool-incentive and developer shares. The epoch_provisions value is left unchanged on purpose, so a raw query still reports the old daily figure even though nothing is minted from it.
A lopsided vote, not a unilateral decision
The change went through Osmosis governance rather than being imposed by a team. The on-chain tally for proposal 1053 closed with 95,127,295 OSMO, or 91.07 percent, voting yes; 9,328,358 OSMO, or 8.93 percent, abstaining; and only 2,340 OSMO voting no alongside 1,151 OSMO voting veto. Voting ran from October 20 to October 25, 2026.
Staking yield is now entirely fee-funded
Removing issuance deletes the roughly two percentage points of staking APR it supplied. That amount is mostly, not fully, replaced: Proposal 1052 had already increased the taker-fee share to stakers by an estimated 1.7 percentage points of APR. Staking rewards now come entirely from taker fees and transaction fees, so the yield depends on trading activity rather than on newly created supply. There is no treasury printing press behind the number anymore.
Dilution stops and burns compound
Ending issuance removes about 40,000 OSMO a day from the market, or about 14.6 million OSMO a year. Against the 749.25 million tokens in circulation, that is just under 1.95 percent of supply per year that no longer dilutes holders, before counting burns. Because taker-fee and ProtoRev burns already outpaced the tokens entering circulation, Osmosis was net-deflationary on its own accounting; ending issuance means every burn now reduces supply in one direction only.
What remains open
About 51.9 million OSMO still sit in the developer vesting account. Those tokens were minted at genesis rather than issued, and releasing them now requires a separate governance vote, making them the only remaining source of new OSMO entering circulation. The real test is not the one-day price move that followed passage but the next several epochs, and whether fee-funded staking yield is enough to keep validators bonded and stakers committed.
Source: BlockchainReporter.