What everyone needs to know
A discount rate is a percentage configured on each funding cycle that determines by how much the subsequent cycle's weight (i.e. exchange rate) should decrease compared to the funding cycle for which the discount rate is set.
A discount rate is only applied if a new weight isn't explicitly set in an upcoming funding cycle reconfiguration.
A discount rate can be used to automatically decrease token issuance over time. Funding cycles with higher discountRates and/or shorter durations will have token issuance decrease faster than those with smaller discountRates and/or longer durations.
What you'll want to know if you're building
A discount rate can be specified in a funding cycle through the SNOWCntroller.launchProjectFor(...) or SNOWController.reconfigureFundingCyclesOf(...) transactions.