Dilution
The fall in each holder's share of total supply that happens when new units are created and given to someone else.
The arithmetic is simple: if supply grows by a tenth and a holder receives none of the new units, that holder's share of supply falls by roughly a tenth. Sources of dilution include validator issuance, liquidity mining programs, unlocks of allocations set aside at launch, and new mints authorized by governance. The equity comparison is a company issuing new shares, but three protections common in equity markets are usually absent: pre-emption rights, a shareholder vote on the issuance, and audited disclosure of the resulting share count. Dilution describes ownership share and nothing else, which is why a diluted holder can still see a rising price and an undiluted one a falling price.
En pratique
A holder who does not stake on a proof-of-stake network is diluted over time by the issuance paid to those who do.
Le malentendu courant
Dilution is a change in ownership share, not automatically a change in price; the price effect depends on whether demand absorbs the new units.