You do not need to account for inflation. But it helps if you are the only one that does. In every auction draft, the economy tanks at some point. In baseball auction terms, this happens when the finite number of auction dollars that each team has to spend is far below the total dollar value of remaining players to be drafted. It comes at a point when most teams are having to drop out of bidding because the bidding has exceeded what owners can actually afford with their remaining dollars. You do not want to be an owner who can be outbid on strong players that are being acquired at a low salary. The result is very good players with high upside end up being bought at very discounted prices.

For example, let's say Trevor Bauer could be had for $7 in an auction this year if his name was tossed out early. He could go for over $10 if tossed out for auction earlier in the draft since there will be a lot of money available and owners may be hoping he produces like a $20 player. But if you accounted for inflation, causing you to avoid overbidding for players early (like everyone else will), you will end up with a very deep, balanced team with an opportunity to scoop up multiple Trevor Bauers for around $3 because everyone else will have already lowered their max bids to a level where you can outbid them for every player who seems to be a good value.

So inflation will not be bad during the inaugural year. But since most players that will be protected (and will count toward the salary cap) will be salaried less than their projected value, subsequent years will experience higher inflated values earlier in the draft because the balance of available dollars will exceed the value of available players until the moment when the auction economy tips the scales when the opposite becomes true.