# NFT/NXPC Exchange Rate

$$
NFT/NXPC\ Exchange\ Rate\_t = \frac{Number\ of\ NFTs\ in\ Item\ Pool\_t}{Total\ Supply\ of\ NXPC\_t}
$$

The ***NFT/NXPC Exchange Rateₜ*** represents the number of NFTs that can be exchanged for one NXPC token at a specific time, ***t***. Below are the variables used in this calculation.

* ***t***: This indicates a specific point in time
* ***Number of NFTs in Item Pool***<sub>***t***</sub>*:* This represents the total number of items available in **Item Pool** at time, ***t***.
* ***Total Supply of NXPC***<sub>***t***</sub>: This represents the the maximum supply cap (1B) minus the cumulative net amount of NXPC redeemed for NFTs at time ***t***. Cumulative net amount of NXPC redeemed for NFTs equals the cumulative amount of NXPC removed from circulation via **NXPC Fission** minus the amount that has re-entered circulation through **Item Fusion**. Note that this figure does not reflect burned NXPC tokens, so NXPC burn does not affect the ***NFT/NXPC Exchange Rateₜ***. *(For additional information on **Item Fusion**, please refer to Section* [Item Fusion](/tokenomics/nxpc/item-fusion.md)*)*

***

When users exchange NXPC for NFTs, both the numerator (***Number of NFTs in Item Poolₜ***) and the denominator (***Total Supply of NXPCₜ***) changes proportionally. Thus, the ***NFT/NXPC Exchange Rateₜ*** remains unchanged when NXPC are exchanged for NFTs.&#x20;

For example, suppose there are 100 NFTs in the **Item Pool** with a total NXPC supply of 10 at time ***t***, resulting in the ***NFT/NXPC Exchange Rateₜ*** of 10 (100 ÷ 10 = 10; meaning 1 NXPC can be exchanged for 10 NFTs). If a **set** contains 10 NFTs and a user conducts **NXPC Fission** for one **set** (redeeming 1 NXPC for 10 NFTs), the ***Number of NFTs in Item Pool***<sub>***t***</sub> decreases to 90 NFTs, and the ***Total Supply of NXPC***<sub>***t***</sub> reduces to 9 tokens, maintaining the ***NFT/NXPC Exchange Rateₜ*** of 10 (90 ÷ 9 = 10).

Reversing this scenario, when a user exchanges a collection of 10 NFTs back into 1 NXPC through **Item Fusion**, the ***NFT/NXPC Exchange Rateₜ*** remains unchanged. The ***Number of NFTs in Item Pool***<sub>***t***</sub> increases back to 100, and the ***Total Supply of NXPC***<sub>***t***</sub> returns to 10, keeping the ***NFT/NXPC Exchange Rateₜ*** at 10 (100 ÷ 10 = 10).

However, when new items are introduced to the **Item Pool**, the ***NFT/NXPC Exchange Rateₜ*** increases because only the numerator (***Number of NFTs in Item Poolₜ***) increases, while the denominator (***Total Supply of NXPCₜ***) remains unchanged. Continuing the previous example, if 100 new items are introduced to the **Item Pool**, the ***Number of NFTs in Item Pool***<sub>***t***</sub> rises to 200, and the ***Total Supply of NXPC***<sub>***t***</sub> remains at 10, changing the ***NFT/NXPC Exchange Rateₜ*** to 20 (200 ÷ 10 = 20). This allows users to exchange more NFTs for the same amount of NXPC in subsequent timeframe, causing the ***NFT/NXPC Exchange Rateₜ*** to increase progressively with each new item introduction.

{% hint style="info" %}
*NFTs exist only in natural number quantities. The amount of NXPC required to exchange for a collection containing a specific number of NFTs is calculated using the **NFT/NXPC Exchange Rateₜ**. For example, exchanging 250 NFTs would require 12.5 NXPC (250 NFTs ÷ **NFT/NXPC Exchange Rateₜ** 20).*
{% endhint %}

{% hint style="info" %}
*The protocol truncates the **NFT/NXPC Exchange Rateₜ** calculation to 18 decimal places. Due to this truncation, the actual exchange rate applied by the protocol might differ slightly from the theoretical rate calculated by the formula.*
{% endhint %}


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