We can visualize the Monero stock to flow as follows:

Date Stock Flow S2F Growth
Jan 15 2021 17,813,880 317,988 56 1.78%
May 2022* 18,132,306 157,680 115 0.87%
2122 33,900,306 157,680 215 0.46%

*May 2022 estimate via this spreadsheet, then added 100*157,680 to get 2122 value

So essentially we’re looking at a stock to flow of around 56 in Jan 2021, gradually increasing to 115 around May 2022 when the tail emission kicks.

Then as each year passes, and the total supply grows, the stock to flow will increase as the yearly flow stays static at 157,680 new XMR created.

Gradually going from 115 to 215 over the next hundred years.

Comparing Monero to Bitcoin and Gold

This image illustrates the different S2F from Jan 2021 to Jan 2032. As you can see, the S2F is higher for Monero from Jan 2021 to 2024. Then from 2024, the S2F of Monero is similar to Bitcoin, with Gold staying lower. Then after 2028, and beyond, the S2F of Monero stays relatively flat compared to Bitcoin, which increases dramatically.

About Stock to Flow (S2F)

The stock to flow ratio gives us an idea of what the existing “stock” of a coin is, versus the newly minted coins (“flow”) coming on to the market.

Stock to flow (S2F) = stock / flow

Why might the S2F of Monero be interesting?

The value of assets is derived from their supply versus their demand. To inflate the value of fiat currency, you can increase the money supply. Generally speaking, increasing the supply over time erodes the buying power of the currency.

When looking for a “safe” store of value, one of the metrics to understand is the stock to flow. If you come across an asset, like Gold, that has:

  • Relatively high stock to flow
  • High probability that the rate of supply will not change

This rules out the risk that the supply will be greatly inflated, making it a safer store of value.

Of course, the S2F metric on its own is worthless, but as a component needed in building a bigger picture, it’s useful.

Plan B, who’s a Dutch man, using a pseudonym, currently working at a large pension fund, did some interesting analysis on the stock to flow of Bitcoin (digitalik.net/btc/). There’s an interesting interview with him and Pomp, where he discusses the stock to flow model from 24m 10s.

Compared to Precious Metals

The table below shows the stock to flow ratios for precious metals:

Stock (tonnes) Flow (tonnes) S2F Growth
Gold 185,000 3,000 62 1.6%
Silver 550,000 25,000 22 4.5%
Palladium 244 215 1.1 88.1%
Platinum 86 229 0.4 266.7%

*Calculations courtesy of Plan B (source)

We can see that for gold, the stock to flow ratio is approximately 62. Which provides a nice frame of reference for when we look at the stock to flow ratio of Monero now, and in the future.

Compared to Bitcoin

Date Stock Flow S2F Block Reward
2020 Halving 18,375,000 328,500 56 6.25
Jan 15 2021 18,601,200 328,500 56 6.25
2024 Halving 19,687,500 164,250 120 3.125
2028 Halving 20,343,750 82,125 248 1.5625
2032 Halving 20,671,875 41,062 503 0.78125
2036 Halving 20,835,937 20,531 1015 0.390625
2040 Halving 20,917,968 10,265 2038 0.1953125
2044 Halving 20,958,984 5,132 4083 0.09765625
2120 Halving 20,835,937 0.0021024 9,988,584,457 0.000000040

So we can see that Bitcoin has a stock to flow of 56 until the next halving. That’s comparable to Monero currently (56), and to Gold (62).

At the next BTC halving it’s S2F increases to 120… making it comparable to Monero for the next 4 years (120 vs 115). However, after the 2028 halving Bitcoin’s S2F reaches a level (248) that Monero won’t reach for well over 100 years. Basically at that point, there is no catching up to Bitcoin’s S2F.

Comparing the BTC vs XMR block reward over time (source Reddit)

How to calculate Monero S2F?

At the time of writing (Jan 15, 2021), the stock to flow of Monero is:

Stock (17,813,880) / Flow (317,988) = 56

You can use bitinfocharts.com/monero/ to get the latest figures for total Monero in circulation, and the current block reward.

For example, in the above calculation, the block reward (every 2 minutes) is 1.21 XMR. So then you need to do:

1.21 x 30 x 24 hours x 365 days = 317,988 XMR

Which gets you the emission rate per year.

Between now and May 2022, the Monero block reward is going to decrease from 1.21 to 0.6, at which point it will stay at 0.6 XMR perpetually.

The only thing that would change the emission rate is if the developers agreed to change it in the code. Currently there are no talks of that.

Misc. Links

Monero Investor
This page explains some key metrics that investors would look at when evaluating the prospects of Monero.

Monero.supply
This page graphs the supply of XMR vs supply of BTC. It also compares the miner reward of each, over time.

Monero Inflation Calculator
This page graphs the annual inflation of Monero + allows you to model what would happen if x% of coins are lost each year.

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Posted by John Alexander

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