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  • Indicator Overview
  • How is it measured?
  • About
  • Coined By
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  1. Guides & Tutorials
  2. Metric Guides
  3. Dormancy

Supply-Adjusted Dormancy

Supply-Adjusted Dormancy accounts for the impact that coin day accumulation by the total supply has on the Average Coin Dormancy metric

PreviousAverage Coin DormancyNextLifespan

Last updated 4 months ago

Indicator Overview

Supply-Adjusted Dormancy accounts for the impact that coin day accumulation by the total supply has on the metric. As more coins are issued and more coin days are accumulated by the aggregate network, the lower bound of coin days destroyed and thus Dormancy will increase over time.

This results in a steadily rising 'floor value' and potential for higher 'peak values' of Dormancy which therefore requires additional consideration in analysis to accurately compare measurements from different points in time. Adjusting for supply aims to provide a more proportional and equivalent view of indicator values over the history of the market.

The rationale behind supply adjustment is as follows:

  • Early in a protocol's life, coin supply is small and so is the aggregate accumulated lifespan and thus the required adjustment is larger to scale up in line with more recent values.

  • Later in a protocol's life, coin supply is larger and so is the aggregate accumulated lifespan so the required adjustment is smaller relative to recent values.

In general, horizontal levels and values in supply adjusted metrics are likely to more consistent over time than those for the base metric. The trends, fractals and interpretation remain consistent between both the original metric and supply adjusted variants.

How is it measured?

Supply-Adjusted Dormancy simply divides Average Coin Dormancy by the circulating supply (total amount of coins issued).

About

Coined By

Further Resources

Supply-Adjusted Dormancy=DormancyTotal Supply=Dormancyvalue (of all UTXOs)\begin{align*} \textrm{Supply-Adjusted Dormancy} &= \frac{\textrm{Dormancy}}{\textrm{Total Supply}} \\[0.5em] &= \frac{ \textrm{Dormancy} }{ \textrm{value}~{\color{gray}{\textrm{(of all UTXOs)}}} } \end{align*}Supply-Adjusted Dormancy​=Total SupplyDormancy​=value (of all UTXOs)Dormancy​​

and (June 2019)

Reginald Smith and David Puell -

đź“–
View Supply-Adjusted Dormancy in Glassnode Studio
View Supply-Adjusted Dormancy in Glassnode API Docs
Reginald D. Smith
David Puell
Bitcoin Average Dormancy: New Views of a Classic On-Chain Metric
Average Coin Dormancy
Bitcoin: Supply-Adjusted Dormancy