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Encyclopedia DeFi · Entry 150

Market cap versus fully diluted valuation

AI-assisted research · separate automated verificationCorrections

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Key facts

Key facts for Market cap versus fully diluted valuation
FactDetailSource
Supply basisCirculating and eventual supply can be substantially different.[1]
FDV definitionDefiLlama describes FDV using expected maximum supply multiplied by price.[1]
Token interfacetotalSupply alone does not define future minting limits or circulating supply.[2]
01

Hold the price constant to see the denominator effect

With 10 million circulating tokens at $2, circulating market cap is $20 million. Applying the same price to an assumed 100 million eventual tokens gives $200 million FDV.

The example assumes a price for the multiplication. It does not model how unlocking, demand or market depth might change that price.

02

Check whether maximum supply is actually constrained

A token interface reports current supply, but minting authority, emissions and governance determine what can happen later. Some tokens do not have a simple immutable maximum.

State which supply estimate a provider uses. A precise-looking FDV can conceal a changing or disputed denominator.

03

Valuation is not cash available to sellers

Neither metric measures proceeds obtainable from selling the full supply. A marginal quoted price and available market depth answer different questions.

Use unlock schedules, ownership concentration, token rights and liquidity alongside valuation ratios. A low unit price does not establish that a token is cheap.

Direct answers

Questions people ask

Does a high FDV-to-market-cap ratio predict a price crash?

No. It signals a supply-definition gap under the chosen assumptions, not a deterministic price outcome. Unlock timing, demand and actual token rights still matter.

Inspect the evidence

The answer and key facts have stable claim links. These records retain the scope and qualification when reused.

Circulating market capitalization values the defined circulating supply at an observed token price. Fully diluted valuation, or FDV, applies that price to an assumed eventual supply, often the expected maximum. FDV is a hypothetical multiplication, not a forecast that all tokens can be sold at today’s price.

Scope: DeFi · data through 2026-10-02. Verification: verified · 2026-10-02T18:15:18.493Z.

Link to this claim
Supply basis: Circulating and eventual supply can be substantially different.

Scope: DeFi · data through 2026-10-02. Verification: verified · 2026-10-02T18:15:18.493Z.

Link to this claim
FDV definition: DefiLlama describes FDV using expected maximum supply multiplied by price.

Scope: DeFi · data through 2026-10-02. Verification: verified · 2026-10-02T18:15:18.493Z.

Link to this claim
Token interface: totalSupply alone does not define future minting limits or circulating supply.

Scope: DeFi · data through 2026-10-02. Verification: verified · 2026-10-02T18:15:18.493Z.

Link to this claim
Revision history
  1. — First publication after primary-source research and independent automated verification.

Source register

Sources and references

Retrieval dates and locators are recorded individually.
  1. DefiLlama: How we calculate TVLDefiLlama

    Provider-specific valuation scope and TVL methodology.

    Locator: Total Value Locked · Retrieved: 2026-10-02T17:03:46.209ZOpen source
  2. ERC-20 Token StandardEthereum Improvement Proposals

    Token supply, displayed units and balance accounting.

    Locator: totalSupply; balanceOf; transfer; decimals; approve; allowance; transferFrom; Transfer · Version / scope: ERC-20 · Retrieved: 2026-10-02T17:03:45.826ZOpen source
  3. VestingWalletOpenZeppelin

    Vesting schedules, releasable balances and ownership transfer.

    Locator: VestingWallet; vestingSchedule; release · Version / scope: OpenZeppelin Contracts 5.x · Retrieved: 2026-10-02T17:03:46.020ZOpen source
How this article was made

Research and drafting use AI assistance. A separate automated review checks claims against primary sources; no external expert or named human review is implied. Publication, substantive editing, source retrieval and verification are recorded separately. This version was independently checked by an automated reviewer on 2 October 2026.

Editorial method and corrections

Degrees of Satoshi editorial project. “Market cap versus fully diluted valuation.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/market-cap-vs-fdv/