Monetary Expansion Rate

The reserve started at the genesis supply minus the initial circulating ada. Each epoch, the protocol moves ρ × remaining_reserve lovelaces into the reward pot, where it joins the transaction fees collected during that epoch. Because the reserve shrinks over time, this reserve-draw component declines geometrically: the network keeps issuing rewards, but at an ever smaller rate.

The treasury cut (τ) is taken from this reward pot before the rest is paid to stake pools and delegators.