Yea steem is inflationary. I'm not exactly sure what the interest rate is but they wanted to incentivise users to power up. Here is one article I found but it doesn't really answer the question. I think it might be like less than 1%
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I have a feeling that originally there was some crazy compound interest before one of the forks. if you were to check out i had bought steem and powered up (at a super high price in terms of satsoshis but not dollars) and maybe doubled my steem power through interest alone.