Liveliness is a metric which provides insights into shifts in macro HODLing behaviour, helping to identify trends in long term holder accumulation or spending. It highlights periods where coin days are being destroyed at a rate faster than the global network is accumulating them. This chart presents four variants of Liveliness:

• 🟠 Liveliness as the unfiltered variant.

• 🟣 Entity-Adjusted Liveliness filtering out internal transfers, and thus reflecting economically meaningful activity.

• 🔵 Long-Term Holder Liveliness for coins within the LTH cohort.

• 🔴 Short-Term Holder Liveliness for coins within the STH cohort.

Every day the network will accumulate one coin day per unit of circulating supply. Simultaneously, some of those coin days will be spent and destroyed in transactions, resetting the moved coins lifespan to zero. Liveliness is calculated by taking the ratio of cumulative coin days destroyed to the cumulative sum of all coin days ever accumulated by the network.

Liveliness to vary between a value of 1 for a protocol where every coin is spent at once, and 0 for a protocol where no transaction has taken place. Analysis of metric values between the theoretical extremes of 1 and 0 can generally be considered within the following framework:

• Liveliness will decrease when a high proportion of coin supply is dormant (i.e. HODLing behaviour) and the global coin day accumulation outpaces coin days destroyed in on-chain activity.

• Liveliness will trend sideways where coin days destroyed are equal to the coin days accumulated by the circulating supply.

• Liveliness will increase when long term holders begin spending old coins that have accumulated large volumes of coin days that exceed the rate of global coin day accumulation.

For more information, please refer to Liveliness of Glassnode Academy.