Fully diluted valuation, or FDV, multiplies a token’s current price by its maximum or total supply. Market capitalization multiplies the same price by circulating supply. Reading both numbers together shows how much of a token’s planned supply has not yet reached the market.
FDV is a snapshot, not a forecast. It assumes that every future token could trade at today’s price even though new supply may change that price. Its best use is to expose a question for further research: when will the remaining tokens arrive, and who receives them?
The two calculations
Suppose a token trades at $1, with 100 million units circulating and a total supply of one billion. Its market cap is $100 million. Its FDV is $1 billion. The ten-to-one gap indicates that nine-tenths of the stated total supply is outside the circulating figure.
That does not mean $900 million of selling will occur. Some tokens may be burned, held in a treasury, released slowly or never sold. It does mean today’s holders should inspect the issuance and vesting schedule before comparing the project with one whose supply is already distributed.
Use the ratio as a screening tool
Dividing FDV by market cap gives a quick supply multiple. A result near one means total supply and circulating supply are close. A result of two means the total-supply figure is about twice the current float. A larger multiple points to more potential dilution, but it does not reveal timing or recipient behavior.
Do not turn rough ratio bands into universal buy or sell rules. A proof-of-work asset can release new coins predictably over decades. A venture-backed token may have a large cliff next month. The same FDV multiple can describe very different pressure on the market.
Read the unlock calendar next
Unlock structure has at least three dimensions: amount, timing and recipient. Linear releases spread supply over a period. Cliffs release a block on a set date. Team and investor allocations may behave differently from ecosystem incentives or a treasury balance governed by a DAO.
DefiLlama’s unlock dashboard can help locate schedules, while the project’s own documentation and contracts should remain the final reference. Look for amendments, governance votes and ambiguous labels such as “ecosystem” that do not explain how funds can be spent.
Check the supply data
Market-data pages such as CoinGecko provide price, circulating supply, market cap and FDV estimates. Those figures can lag contract changes or use a project-reported circulating number. For an Ethereum token, Etherscan can show the contract, holders and token transfers, although interpreting locked and circulating supply still requires context.
Compare price and market cap over the same interval. If market cap rises much faster than price, circulating supply may have increased or the data provider may have revised its estimate. The discrepancy is a prompt to inspect transfers and unlock records, not proof that insiders sold.
Why price may struggle after unlocks
New supply creates potential sellers. Existing demand must absorb those tokens for the price to remain unchanged. If demand does not grow, price can fall even while the protocol adds users or the wider market rises. Expected unlocks may also affect behavior before the release date as traders position around the event.
The effect is not mechanical. Recipients can hold, stake, delegate or use tokens rather than sell them. A transparent, gradual schedule may already be reflected in price. Liquidity, exchange depth and market sentiment influence how much an unlock moves the market.
Common FDV mistakes
FDV is not a price target and should not be treated as cash invested in a project. It does not say what a buyer would pay to acquire every token, because attempting such a purchase would move the market. It also should not be compared across unrelated sectors without considering revenue, utility, governance and maturity.
Another mistake is checking the maximum-supply number while ignoring mechanisms that can change it. Governance may authorize emissions, burns may reduce supply, and some tokens have no fixed maximum. Use the definition applied by the data provider and verify it against protocol rules.
A repeatable review
Record current price, circulating supply, total or maximum supply, market cap and FDV from the same timestamp. Calculate the supply multiple. Then list the next major unlocks, recipients and release method. Check whether any administrator or governance process can alter issuance.
Finish by asking what demand could absorb the added float. Fees, staking requirements or governance rights may support demand, but none cancels dilution by definition. FDV becomes useful when it leads to this supply schedule analysis rather than standing alone as a headline number.
Sources & further reading
- Adapted from BlockchainReporter: What Is FDV in Crypto? Fully Diluted Valuation, and Why the Gap Should Worry You
- Supplementary unlock-data directory: DefiLlama Unlocks