Taproot Efficiency Ratio™
Ratio of P2TR supply share to P2TR output count share. When below 1, Taproot weighs less in held value than in output count. When above 1, the opposite. The two components have different bases. 7-day EMA smoothed.
What is it?
The Taproot Efficiency Ratio™ divides the P2TR supply share, as a percentage of total BTC held in P2TR outputs, by the P2TR output share, as a percentage of the sum of P2TR, P2WPKH, P2SH and P2PKH outputs. A ratio below 1 means the supply share is below the output share. A ratio above 1 means the opposite. The two components do not share the same basis: a stock of value on one side, a flow of counted outputs on the other. The 7-day EMA smooths daily variation.
How to read
A single line, read against 1.0. Above 1, the supply share exceeds the output share. Below, the output share exceeds the supply share. The absolute level depends on both components: a rise in output count lowers the ratio even if the supply share does not change.
Key zones
Ratio below 0.1: the output share dominates by a wide margin. From 0.1 to 0.5: low ratio. From 0.5 to 1.0: ratio close to balance. At or above 1.0: the supply share exceeds the output share. These bounds are reading references, not measured thresholds.
What to observe
The underlying trend is more informative than the absolute level. A ratio moving from 0.02 to 0.05 means the supply share has risen relative to the output share. A trough can come from an output-count spike or from a fall in the supply share. A rebound can come from the normalisation of either component.
Historical context
The ratio between value share and count share by script type is not a standard statistic. On-chain analyses often aggregate by time cohort or holder size. This metric isolates the comparison between value share and count share for a given script type.
Expert notes
Formula: 7-day EMA of the P2TR supply share divided by the 7-day EMA of the P2TR output share. The EMA is applied before division to avoid zero division on very low activity days. The 7-day step is a compromise: 3 days is too noisy, 30 days over-smooths rapid moves. A median filter would be more robust for academic analysis but less readable on a chart.
Common mistakes to avoid
A low ratio is not a negative judgment on Taproot. It indicates a value share below the count share, not a quality of use. The ratio does not measure the value of individual outputs, and a rise in output count is enough to lower it. Finally, a ratio above 1 does not prove superior adoption: it compares two proportions with different bases.
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/onchain/metrics/taproot-efficiency-ratio/data?timeframe=90d' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "taproot-efficiency-ratio",
"timeframe": "1y"
}Required tier: pro. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
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Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.