Difference between revisions of "Total supply, circulating supply, and staked ICP"

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The amount of ICP staked is a changing number so most recent number can seen in the [https://dashboard.internetcomputer.org/neurons neurons dashboard].  
 
The amount of ICP staked is a changing number so most recent number can seen in the [https://dashboard.internetcomputer.org/neurons neurons dashboard].  
  
===At network Genesis===
+
===At network genesis===
  
As of May 10, 2021:
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May 10, 2021:
 
* Total supply: 469 Million
 
* Total supply: 469 Million
 
* Circulating supply: 123 million
 
* Circulating supply: 123 million

Revision as of 06:15, 25 February 2022

Understanding the supply of a token is important to many people in the crypto community.

The total supply of ICP is variable with both burning (deflationary) and minting (inflationary) mechanisms. The circulating supply of ICP is also affected by the unlocking of neurons from early contributors (seed round contributors are on multi-year vesting for example).

Background: Design Intent

The design intent of the tokenomics of the IC are to create a self-sustaining ecosystem that can balance the following constraints:

  • Developers pay very low storage and compute costs
  • Node providers are paid enough to incentivize them to be part of the network
  • NNS rewards are high enough to encourage staking (but not too high)

Since this is a dynamic system, it is up to the community who keep an eye on the system and adjust its levers accordingly.

Total supply and circulating supply

Total supply

Total supply is the sum of all the tokens in the system (whether they are locked/staked or not).

The total supply is a changing number so its most recent number can seen in the IC circulation dashboard.

Circulating supply

Circulating supply is the sum of all the tokens that have been counted as "circulating". This includes all tokens that have ever been liquid in the system (even if they were subsequently staked), so circulating supply includes some staked ICP.

The circulating supply is a changing number so its most recent number can seen in the IC circulation dashboard.

Staked ICP

Staked ICP supply is the sum of all the tokens that are locked in neurons.

The amount of ICP staked is a changing number so most recent number can seen in the neurons dashboard.

At network genesis

May 10, 2021:

  • Total supply: 469 Million
  • Circulating supply: 123 million

Current Status

As of February 23, 2022:

  • Total supply: 477 Million
  • Circulating supply: 207 million (43.3% of Total supply)
  • Staked ICP: 275 million (57.6% of Total supply)

Inflationary mechanisms

The NNS mints ICP tokens for two reasons:

  • NNS can mint ICP to pay for NNS rewards (e.g. Staking). As of February 2022, this is the 95-99% of current minting.
  • NNS can mint ICP to pay for node providers

Paying staking rewards

Voting rewards are paid by minting ICP, although this minting only happens at the moment rewards are spawned, maturity is merged, or the neuron is disbursed.

In the first year, the NNS allocates 10% of the total supply to generate voting rewards. Note the term "allocates" rather than "mints", because rewards are not minted until they are spawn, merged or the neuron is disbursed, so total supply is not automatically increased by rewards alone. This allocation rate drops quadratically until it reaches 5% by year 8. Like all parameters in the NNS, the minting rate can be changed via NNS proposals, but this is the current rate schedule.

The amount of ICP minted for NNS rewards can be seen in the "Total Rewards" chart.

See more in Staking,_voting_and_rewards.

Paying node providers

Node providers are paid for their nodes.

The amount of ICP minted for compute can be seen in the "Total Rewards" chart.

Deflationary mechanisms

There are three main cases for burning ICP:

  • Minting cycles to pay for compute and storage burns ICP to create cycles
  • Burning of transaction fees
  • Burning of the 1 ICP deposit for failed proposals; note that this only happens at disbursement or merging of neurons, so accumulated fees can persist for a while before finally contributing to deflation.

The amount of ICP burged since Genesis is listed in the "Total ICP Burned" chart in the IC circulation dashboard.

Paying for compute and storage

Dapp and smart contract developers pay for computation and storage costs with cycles. Cycles are acquired from the NNS by paying in ICP (which are burned).

To see the IC computation and storage costs as cycles, please see Computation and Storage Costs.

Transaction fees

Transferring ICP across accounts costs 0.0001 ICP.

Failed NNS proposals

It costs 1 ICP to submit a proposal. If the proposal is rejected, the 1 ICP is burned.

History of fundraising rounds

Because the IC took years of R&D (at Genesis, the DFINITY foundation was over 200 full time members), there have been three main rounds and one airdrop event.

For a breakdown of the different rounds and vesting schedules, see Messari's report "Introduction to ICP". The unlocking of neurons has been the largest contributing factor to circulating supply since Genesis so important to know the context.

1. Seed Round, Feb-2017: This round was advertised by a tweet and open to the public by downloading a web extension. Dfinity raised CHF3.9 million (US$3.9 million) from 370 participants, at a valuation of $16 million, or a price of $0.03 per token. It held a portion of these funds in ETH and BTC during the 2017 crypto bull run. According to the team, Dfinity at one point turned these earlier ETH and BTC allocations into $40 million worth of fiat.

2. Strategic Round, Jan-2018: Dfinity raised $20.54 million for 7.00% of the initial supply (the number has been revised from the previously cited 6.84%). This allocation will vest monthly over three years starting from mainnet launch (May 2021). Participants include Polychain Capital, Andreessen Horowitz, CoinFund, Multicoin Capital, and Greycroft Partners. This round marks the first token a16z invested in. Polychain and Dfinity later collaborated to create the “DFINITY Ecosystem Venture Fund” of an undisclosed size. The goal is to fund new projects that would grow the IC’s application ecosystem. The media reported that Dfinity raised a much larger amount of $61 million. It’s possible that this enlarged amount has either been revised or included funds for the Ecosystem Venture Fund.

3. Private Sale, Aug-2018: 110 participants contributed $97 million for 4.96% of the initial supply, sold at $4 per ICP token. This number has been revised from 4.75% previously reported. This allocation came with a monthly vesting schedule of one year from mainnet launch. Vesting will begin at the initial token distribution event on May 10, 2021. Participants in this round include Andreessen Horowitz, Polychain Capital, SV Angel, Aspect Ventures, Electric Capital, ZeroEx, Scalar Capital, and Multicoin Capital.

4. AirDrop, May-2018: $35 million worth of ICP tokens (formerly DFN), or 0.80% of the initial supply, was airdropped to early supporters by being part of their mailing list, forums, slack, and community. At this time, valuations reached $1.89 billion. Airdrop participants received the IOU version of their ICP tokens in September 2020. These tokens will become transferable on May 10, 2021.

Deflationary or inflationary?

Because the IC has both deflationary and inflationary mechanisms, it can be either depending on the right circumstances.