I can understand their unease at having CS = TS. Is there perhaps a reasonable way to instead limit the inclusion of staked coins in CS?
For example, counting 8-year, non-dissolving neurons as “circulating” seems inconsistent with the purpose of having staked ICP to begin with. Isn’t the non-liquid nature of these assets the very thing that gives them value to the IC ecosystem?
I understand this would go against current behaviors in the industry, but I would like to know what CMC thinks about this. Since they are the ones displaying this information as a market indicator, perhaps they can provide some guidance as to what they are trying to convey and where to place these limits.
Thank you for this topic @Kyle_Langham, I like the proposed change bacause:
it will be easy to see if DFINITY is selling ICP
might help a lot against FUD which uses such argument
the Circulating Supply stats on CMC will (hopefully) stop increasing every month by millions
the number which causes feeling of inflation will be more stable
Only other thing which I believe might be useful (on CMC) is to add some Liquid supply stats - which is (from my understanding) what is now reported as Circulating Supply.
If we want to have info on liquid supply perhaps a better place to show that would be the IC dashboard. Not sure we need to display all that data on CMC since it’s just supposed to be a place to benchmark, not do real analytics.
Only on the IC dashboard, it would be nice to show a bridge between liquid supply → circulating supply → total supply → total supply + staked maturity → total supply + total maturity (which includes maturity that is not staked).
Personally for me (I know ppl disagree), but I think liquid supply + maturity that is not staked is the truest measure of liquidity.
I think the dashboard has all of those figures except staked maturity. I’ve heard chatter of adding that metric in the future when the governance canister is updated to report out staked maturity figures.
Now that we see the community overwhelmingly supports this change we are discussing an implementation plan. I’ll report back out when we have a plan to move forward.
Just want to point out that although I do think there are market benefits to us adjusting our CS upward, there are reasons to accurately report the limit of our CS as well due to laws of supply and demand.
Ultimately I hope this discussion will inspire CMC to introduce new standards that will allow us to really compare our ecosystem and value to others. And I think we have nothing to fear.
As a follow up to NNS proposal 117360, DFINITY plans to update the Circulating Supply API within the next 24 hours per the new Circulating Supply definition. The change will be first reflected on the IC dashboard and then will propagate to coin aggregators on their subsequent data pulls (daily in most cases).
A Quick Recap
DFINITY recognized that the definition they chose for Circulating Supply (CS) at mainnet launch was (1) not aligned with ICP’s peers and (2) was overly complicated and confusing. After researching and discussing with major market leaders like Coin Market Cap, DFINITY recommended to the ICP community a change in the CS definition to define the metric as all tokens except the Foundation’s liquid tokens (Circulating Supply = [Total Supply] minus [Liquid Tokens Owned by the Foundation]). The new definition was recommended with the dual goals of (1) aligning to industry peers and (2) producing a simpler definition that is more understandable. The forum thread above captures the conversation around that discussion.
The high-level justifications for the chosen definition are:
ICP staked on the NNS is being used for the designed utility of the ICP token (governance participation) and therefore all tokens staked on the NNS should be included in the CS.
All staked tokens on the NNS are controlled by their owners (i.e., there are no escrow-like situations in which the token holder is not in control of actions taken to the token).
The industry tends to consider liquid tokens held by the foundations to be non-circulating.
After community discussion, DFINITY proposed to ratify the new definition with the NNS DAO through a motion proposal. That proposal was adopted with 99.5% of votes in favor. DFINITY is now ready to execute the proposal by updating the circulating supply APIs.
The net impact of this change in definition will be the inclusion of ~132M ICP into the circulating supply. ICP’s circulating supply to total supply ratio will be ~86%, which is in line with ICP’s peers.
If you have any questions, please reply to this post and I’ll address them. Thanks!
Edit 1: Updated new CS tokens figure and CS:TS ratio. Previous numbers had an error in the calculation.
@dfisher, I agree with displaying a reconciliation between the different totals on the dashboard as a type of continuity schedule. I have asked for that before as well.
Maturity should definitely be included in some total if the numbers are going to be comparable to shares in a company, since maturity represents a current claim on the overall value of the token economy. Maturity is equivalent to outstanding shares that have not yet been issued, similar to how fully diluted share counts work. Maturity tokens are the same as money already spent, shares already outstanding with third parties, or stock options currently exercisable, since they can no longer create any future benefit to the token economy. They can only benefit the owner of the maturity. By contrast, foundation tokens are arguably equivalent to treasury shares that were “issued” but are no yet “outstanding” as a claim on net assets, since all those tokens can still be spent later (e.g., on R&D resources, project bounties, marketing, etc.) to increase the value of the token economy.
As a result, the “circulating supply” number is basically irrelevant. To me, the market cap. of ICP must logically be the token price X total tokens with an external claim on the value of the token economy. In my view, that is equivalent to token price X (total token supply + all maturity - foundation tokens). If someone disagrees, please explain why.
The price of ICP was rising nicely until this proposal went into effect. Suddenly, ICP appeared in the TOP 30 of CoinMarketCap and the price does a pullback (people came to the conclusion that it was some manipulation of the real supply of tokens).
The entire crypto market has been moving in the same direction over the same timeframe. I’m not convinced the correlation proves causation between ICP price and CS definition change when the broader crypto market is seeing analogous performance.
