A “Coin Day” is the holding of a coin without moving it for a day. For example, if I hold 1 KAS for seven days, I accumulate seven coin days. Coin Days are Destroyed when they are moved or spent. Therefore, when I move 1 KAS of seven Coin Days, seven Coin Days are destroyed at the moment of the transaction.

To calculate Coin Days Destroyed (CDD) we take the number of KAS coins moved at a particular on-chain time and multiply that value by the number of days since the KAS coins were last moved. A simple equation illustrating this calculation is the following: 

(The number of KAS coins) x (days since KAS coins last moved) = coin days destroyed (CDD)

In other words, the CDD principle gives extra weight to coins that havent been moved for a long period of time when one is calculating the spending velocity of KAS.  

For example,

• A UTXO for 100 KAS that has not moved for 100 days has accumulated 10,000 coin days.

• A UTXO for 100 KAS that has not moved for 1 day has accumulated 100 coin days.

• A UTXO for 0.1 KAS that has not moved for 100 days has also accumulated 10 coin days.

*** A UTXO (or Unspent Transaction Output), is an accounting structure used in Bitcoin and Kaspa to track when a unit of cryptocurrency was last moved, illustrating shifts in ownership over time. 

Why is it Important? 

The CDD chart helps users track ‘smart money.’ Long-term KAS holders and buyers are likely to have a better understanding of Kaspa’s price cycles versus new holders or buyers. These long-term KAS participants represent ‘smart money.’ 

How to Read the Chart

The CDD (the orange line) has historically moved in parallel with the market price (the white line). This is because long-term holders tend to move (or likely sell) their coins with significant price increases. When you notice a sharp increase in the CDD, be aware that the price is likely to fall thereafter. 

Want to Learn More?

The following charts provide a similar approach to valuing data: Value Days Destroyed (VDD) and Supply Adjusted Coins Days Destroyed.