#### Topic: Using difficulty to estimate stake and value of fraenks

I was curious about the relationship between staking difficulty, actively staking assets and a possible relationship between the value of dalilcoin fraenks and litecoins, so I gathered statistics for 1000 recent blocks (606 - 1605).

The stake is calculated by taking the number of cants of the staking asset, adding 1 million times the number of litoshis burned, and then multiplying by the coinage factor of the asset. The relevant code is in block.ml

``Int64.add v (Int64.mul (min burned 100000000000L) 1000000L)``

Since there are 100000000000 cants in 1 fraenk, dividing by 1000000, we get 100000. It looks to me like this means burning 100000 litoshis (0.001 litecoins) corresponds to staking with 1 fraenk.

If the asset has been locked for staking, the coinage factor will be the maximum value of 1089. For each of the 1000 blocks dividing the stake by the difficulty gives a number that averages to about 1.039e12. If we assume no litoshis are being burned and the stake asset has maximum coin age factor, then this should mean the number of cants being staked is roughly

cants staked =~= Difficulty * 1.039e12 / 1089

To convert this to the number of fraenks being staked we divide by 100000000000 and get

fraenks staked =~= Difficulty * 10.39 / 1089

To be simple, we could roughly estimate the number of fraenks staked as being Difficulty / 100.

The current difficulty is close to 12000, meaning on average an asset that stakes should be roughly 120 fraenks (locked for staking).

Since the stake can be increased by burning litecoins, we can imagine someone staking with a very small amount of dalilcoin fraenks locked for staking. For simplicitly, just say the asset is 0 fraenks. This means if we would like an asset with 0 fraenks to stake like it had 120 fraenks, we could burn 0.12 litecoins. Since the block reward is 25 fraenks, we can think of this as spending 0.12 litecoins to get 25 fraenks, or 0.0048 litecoins per fraenk. In general, we could calculate:

Estimated value of 1 fraenk =~= (Difficulty * 10.39 * 0.001) / (1089 * 25) litecoins =~= Difficulty / 2620308

Of course, the only real way to know the value of fraenks is with a liquid market, but I still think it's interesting that it might be possible to use the difficulty to estimate the value (relative to litecoin) this way.