Newly emitted token only go to “participants” — those who are staking.

In your 1 billion new tokens scenario, either one of two things would happen. (Keep in mind they wouldn’t all be issued at once)…

1. More people see that there are 1 billion new tokens coming so they decide to stake in order to get their portion (thus increasing participation)
2. No one new decides to stake, so the 1 billion are delivered to currently staked participating users, thereby increasing their ownership (thus also increasing participation)