Hi,
I’m trying to figure out the inflation rate and having trouble as a mathematical novice. I am finding it hard because the actual starting number of coins appears to be 0 and then they are gradually released all the way up to 720 million. For example, when reading about another coin I might see that it stated with 1 billion coins issued (and in circulation - as in immediately distributed at the end of the ICO) to the users, and then for instance, a 5% inflation rate. This teaches me that the coin has a nice low inflation rate so that is a good thing.
However with Avalanch the 320 million coins that are unlocked are not distributed immediately but rather they are the inflation so I cannot understand what sums to do to find a fair comparison to the way mentioned above.
To make matters more complex, it makes sense in this ecosystem to compare inflation rates to bitcoin, and bitcoin is/was mined during its first year (Im interested in annual inflation rates for simplicity in understanding Avalanch for investment reasons). Bitcoin therefore grew from 0 to x number in year 1 just like Avalanch and those numbers appear to be very vaguely similar to me in terms of percentage of inflation. (e.g. by looking at the total hard capped number of coins and dividing by the number of coins released per year or just at the end of the first year and then dividing that number by the total number of coins ever to get a percentage per year. I calculate this for Avalanch to be 16% per year, yet it seems crazy to call it that given that the supply is going to increase by something like 40% from 76 million to 120 million during the rest of this year.
I don’t know which numbers to use, is it fair to say it is 16% per year (the hopeful option that doesn’t make any sense sadly but reflects a sensible - according to me who s terrible at maths - way to calculate bitcoins inflation rate or any other mined coin) or 40% by saying there will be 122 million at the end of the first year roughly, and we are up to 76 million released so far so 40% of 122 million is the difference between it and 76 million, or maybe that is backwards and I should call it:
122 million minus 76 million = 46 million which is 60.5% from the current supply levels to the end of year 1. This is very high!
Finally, your chart makes NO SENSE I have been trying to understand it for hours! Please make a simple explanation for maths dunses like myself to look at for business reasons. Look at this:
https://info.avax.network. The first chart which is called:
Chart #2. Schedule of Tokens Unlocking on Mainnet Launch Date
Has confused me for HOURS. We have 76 million tokens, yet we are only 3 months and a bit after main net launch, it says 3 months in we are maybe 13% (have to guess as there are not enough numbers on the side of the chart!) into the 360 million. 13% of 360 is 46.8 million, in which case why are we at 76 million tokens? The coin is inflation faster than the chart says! Furthermore why does the chart not include the staking inflation? Is this what I am missing here (in this final example - which is not the only issue, I don’t understand which is the best way to describe the inflation to understand the market dynamics either as illustrated).
My final attempt is that at the end of year 1 there is 34% inflation out of the 360 million. On top of that there is staking which is 7-12%, lets call it 10% for simplicity so the total is 44% actually. I have heard that the team plans to keep their coins during the first year (obviously, hopefully) and after 12 months the team has 5% inflation so this can be decided so we get 39% inflation out of 360 million (which I do not understand why it is relevant - if the coins are not released they are not effectively ‘on main net’ so its not relevant. The total is what matters. So 39% of 360 million is 140 million and we have 76 million so far so 64 million coins have to be released this year (somehow, despite only being 3 months in we are already over half way through the coin emission schedule, which doesn’t make sense important please explain why we are inflating much faster than the chart says!). Therefore the infantion percentage is very high indeed. I still can’t understand what it is due to the issues explained at the top (crap at maths sorry!).
What does 360 million have to do with anything anyway when it carries on inflating after that up to 720 million? The chart just stops after 48 months rather arbitrarily in my (rather confused opinion).
Please help me make sense of this so I have a ball park estimate of the inflation rate compared to bitcoin and any other ways that seem relevant to you from a business perspective. Is it high compared to other coins from your perspective? This is what I’m interested in.
Thank you! (sorry for the long post and any help much appreciated)
