The most simple explaination I can give you is: everyday there is new steem being created in the network, which is distributed to authors and curators. You might wonder how can steem (money) just appear out of thin air, and it doesn't.
The supply of steem increases everyday which effectively makes 1 steem less worth. Quoting some parts of a post made by @warjar
- New STEEM tokens are created every year, and this have a diminishing effect on the STEEM tokens value.
How the steem is distributed
- Inflate at 9.5% APR narrowing to 0.95% APR by 0.01% every 250,000 blocks (Roughly 0.5% per year).
- Witnesses receive 10% of inflation
- 75% of inflation goes to authors and curators
- 15% of inflation is allocated to Steem Power
A better explanation than my own.
You are too kind sir :P