Definition. This chart shows the Vaulting Rate (🟢) — the rate at which users of the network vault their supply — alongside the 🟣 Nominal Inflation Rate. Instead of comparing network issuance to total supply, the Vaulting Rate compares the daily change of Vaulted Supply to total supply, measuring how quickly coins are being moved into dormancy relative to the size of the monetary base.

Technical. Both series are annualized, normalized by circulating supply, and smoothed with a 14-day rolling median:

• Nominal Inflation Rate = diff(Circulating Supply, 1d) x 365 / Circulating Supply (🟣)
• Vaulting Rate = diff(Vaulted Supply, 1d) x 365 / Circulating Supply (🟢)

where Vaulted Supply = (1 - Liveliness) x Circulating Supply. The series are plotted from 2011 onwards.

Interpretation. Two key takeaways emerge when observing the Vaulting Rate. First, for the most part, the vaulting rate of the network is larger than its inflation rate — which makes sense from first principles given Bitcoin's price appreciation since inception. Conversely, the vaulting rate drops below the inflation rate, and even below zero, during periods of exuberance at historical market tops, suggestive of the unusual rate of profit-taking and distribution by participants in the network. Second, just as Bitcoin's inflation rate drops over time, its vaulting rate drops as well — and seemingly proportionally so. Inflation drops given Bitcoin's ever-decreasing new issuance due to the deflationary nature programmed into the asset's monetary policy; the vaulting rate drops, we believe, because over time fewer coins are being permanently lost.

Notes. This chart was developed within the Cointime Economics framework for Bitcoin, a joint venture between Glassnode and ARK Invest. Full details are available in two formats: an overview primer (Version I, published via ARK) and a comprehensive guide for specialists (Version II, published via Glassnode). Built from Circulating Supply and Liveliness. See also the Cointime-adjusted Inflation Rate and the supply regions in Active and Vaulted Supply.