# Fund Inflation Three (3) inflation parameters must be set during the creation of a DAO. These inflation parameters help reward members who make valuable contributions to their DAOs. The total inflation (summation of all 3) is calculated when the DAO sign-ups close and appended in arrears linearly over the life of the DAO. **Base Inflation:** Inflation awarded linear over the lifetime of the DAO to the council members. Inflation is updated via a function that is called when a new council is chosen. Can also be called at any time to update shares. **Bonus Inflation:** A pool of redeemable inflation shares that can be awarded to an array of individual members via a proposal. The pool increases linearly over the life of the DAO using the same function that is used for base inflation shares. If a proposal to end the DAO early is enacted, any future bonus inflation shares are burnt. **Operation Inflation:** Any time funds are added back to the returns vault from funding opportunities or during member commits, a percentage is split into the operations vault based on the operations inflation. A proposal made by council members can be enacted to pay for operational costs from the operations vault. *Example Scenario:* ***Setup*** *All parameters are set at 5%, totalling 15% inflation \~ 10% to members, 5% to operations* *DAO commitments: $100,000* * *Capital Vault: $95,000* * *Operations Vault: $5,000* *Initial Member Shares: 100,000* ***At DAO End*** *Total DAO return: $1,000,000* * *Total Returns Vault Inflow: $950,000* * *Total Operations Vault Inflow: $55,000* * *Capital Vault: $0 (Theoretically all used up on opportunities)* *Final Member Shares: 110,000 (Bonus and Base split across different members)* --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://aetos.gitbook.io/aetos.vc/features/fund-inflation.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.