I need help with cycle burn rate math - ICP deflation

So there’s some discussions about the cycle burn rate and making ICP deflationary. It was brought to my attention that BOB doing a 10x against ICP would make the entirety of ICP deflationary. However someone else said that even a 5x would do it. I don’t like this at all though, I need numbers and math. As of yesterday evening BOB is burning roughly 90% of all cycles on the IC. I can’t find anything about a direct math coeficient for cycles to icp. Also has anyone approximated the exact amount of ICP created per day, so that we can determine what the price of BOB would actually need to be in order for it to be fiscally logical for people to burn ICP at a rate higher than the inflation rate and thus make us deflationary?

If anything I simply need clarity on the relationship of ICP to cycles, but if you could solve that math, it would help in the marketing of BOB, and the inevitable deflation of ICP which would obviously make ICP itself moon and we all want that.

I can help with that, the rest I’ll leave to people that like to talk about tokenomics :slightly_smiling_face:

Here is a high-level page about cycles. Long story short: 1T cycles cost you 1 XDR, which is ~1.3 USD at the moment. Depending on the ICP price you get a varying amount of cycles for 1 ICP. The current conversion rate is visible here if you scroll down to the ‘Conversion Rate’ panel.

This article gives an overview on the overall mechanics of supply & demand; it also provides a projection analysis on the development of total supply of ICP.

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So does this mean that if ICP does a 5x up in value that the burn rate would go down 5x since it’s that much cheaper to get 1XDR?

In ICP terms yes but not dollar.

That’s really bad, that means that the higher the price of ICP, the slower the burn of ICP. It’s an interesting paradox!

Yes it’s a tradeoff. In return for that you get predicable prices for running an application, which has quite some value IMO

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