Coin Days Destroyed is a measure of economic activity which gives more weight to coins which haven't been spent for a long time.

Coin Days Destroyed (CDD) is a measure of economic activity which gives more weight to coins which haven't been spent for a long time. It is considered an important alternative to looking at total transaction volumes, which may not accurately represent economic activity.

Every day a coin is not moved, it accumulates one "coin day". When a coin is eventually moved, the coin days it has accumulated are reset to zero, or "destroyed". The number of coin days destroyed in any given transaction is a function of the number of coins moved in the transaction and the time that those coins have remained dormant (unmoved).

CDD for a given UTXO is computed by multiplying its value and lifespan in days. The CDD metric constitutes the sum of these values for all spent outputs in the selected time range.

$\textrm{CDD} =
\textrm{value} \cdot \textrm{lifespan}~{\color{gray}[\textrm{days}]}~\textrm{\color{gray}(of all spent outputs)}$

â€‹Supply-Adjusted CDD accounts for the impact of time on the CDD metric. Because coin days are accrued over time, the total potential CDD increases over time. As such, adjusting for supply (an increase in the number of coins in circulation over time) in the denominator provides a more proportional view of dormancy over the history of a market.

â€‹Binary CDD describes whether Supply-Adjusted CDD on any given day was above or below the historical average. In general, it shows whether longer-term market participants are entering or exiting the market. This metric was developed by Hans Hauge and Ikigai.

Bitcoin Forum user ByteCoinâ€‹

April 2011

BitcoinTalk - Re: Bitcoin Transaction Volumeâ€‹

Hans Hauge - Introducing Binary Adjusted BDDâ€‹