# xNIT → $NIT

**xNIT** are governed by two key formulas: the pricing formula (P) and the exchange rate formula (ER).

### Pricing Formula

The pricing formula determines the relative value of **xNIT** to **NIT** in the reward contract.

$$P =  \begin{cases}  \dfrac{xnt}{nt} & \text{if } nt > xnt \ 1 & \text{otherwise} \end{cases}$$

<figure><img src="https://1590734653-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FUz9H2yEvvJUXv6c07FqW%2Fuploads%2F0H2hn6Kkz21j6GtNigAx%2FPricing%20Formula%20FTL%20re.svg?alt=media&#x26;token=9fe0ba85-cfc8-48a4-bfe6-667892ca73f0" alt="" width="511"><figcaption></figcaption></figure>

**where:**

* $$xnt$$ = Total amount of **xNIT** in circulation.
* $$nt$$ = NIT in the reward contract.
* 1 = ceiling price

### Exchange Rate Formula

The exchange rate formula calculates how many Nitro Tokens can be claimed for burning a given amount of xNIT $$(∆xnt)$$

$$ER = \min\left(\dfrac{xnt-∆xnt }{nt }, 1\right)$$

<figure><img src="https://1590734653-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FUz9H2yEvvJUXv6c07FqW%2Fuploads%2FA8OM2cmvUq7ycolL67iI%2FExchange%20Rate%20Formula%20FTL%20re.svg?alt=media&#x26;token=51ddbaef-1af1-4d5d-b4b9-a8059256d444" alt="" width="511"><figcaption></figcaption></figure>

**where:**

* $$Δxnt$$ = **xNIT** to be burned.
* $$xnt$$ = Total amount of **xNIT** in circulation.
* $$nt$$ = Total **NIT** in the reward contract
* 1 = ceiling price

### Examples

**Given Values:**

* Nitro Tokens in the reward contract (nt): 4,000,000
* xNIT in circulation (xnt): 2,000,000
* xNIT to be burnt (∆xnt): 500,000

**Pricing Calculation:**

* $$P = \left(\frac{2,000,000}{4,000,000}\right)$$  = 0.5

**Exchange Rate Calculation:**

* $$ER = \min\left(\frac{2,000,000-500,000}{4,000,000},1\right)$$ = 0.375

**Amount to Claim:**

The number of Nitro Tokens $$(∆nt)$$ claimable for burning $$(∆xnt)$$ xNIT is given by:

&#x20;$$Δnt=ER×Δxnt$$

* $$∆nt$$ = $$0.375\times500,000$$ = 187,500

The user claims **187,500 NIT** for burning **500,000 xNIT**