# Market cap versus fully diluted valuation

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.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions); [ERC-20 Token Standard](https://eips.ethereum.org/EIPS/eip-20)

Canonical: https://degreesofsatoshi.com/encyclopedia/market-cap-vs-fdv/
Published: 2026-10-02
Substantively modified: 2026-10-02
Independently verified by an automated reviewer: 2026-10-02T18:15:18.493Z
Data current through: 2026-10-02

AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied.

## Key facts

- **Supply basis:** Circulating and eventual supply can be substantially different. ([DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions))
- **FDV definition:** DefiLlama describes FDV using expected maximum supply multiplied by price. ([DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions))
- **Token interface:** totalSupply alone does not define future minting limits or circulating supply. ([ERC-20 Token Standard](https://eips.ethereum.org/EIPS/eip-20))

## 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.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions)

## 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.

Evidence: [ERC-20 Token Standard](https://eips.ethereum.org/EIPS/eip-20); [VestingWallet](https://docs.openzeppelin.com/contracts/5.x/api/finance)

## 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.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions)

## Questions

### 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.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions); [VestingWallet](https://docs.openzeppelin.com/contracts/5.x/api/finance)

## Claims and scope

### market-cap-vs-fdv-quick-answer

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: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### market-cap-vs-fdv-fact-supply-basis

Supply basis: Circulating and eventual supply can be substantially different.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### market-cap-vs-fdv-fact-fdv-definition

FDV definition: DefiLlama describes FDV using expected maximum supply multiplied by price.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### market-cap-vs-fdv-fact-token-interface

Token interface: totalSupply alone does not define future minting limits or circulating supply.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

## Sources

- [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions) — DefiLlama. Provider-specific valuation scope and TVL methodology. Locator: Total Value Locked. Retrieved: 2026-10-02T17:03:46.209Z.
- [ERC-20 Token Standard](https://eips.ethereum.org/EIPS/eip-20) — Ethereum Improvement Proposals. Token supply, displayed units and balance accounting. Locator: totalSupply; balanceOf; transfer; decimals; approve; allowance; transferFrom; Transfer. Retrieved: 2026-10-02T17:03:45.826Z.
- [VestingWallet](https://docs.openzeppelin.com/contracts/5.x/api/finance) — OpenZeppelin. Vesting schedules, releasable balances and ownership transfer. Locator: VestingWallet; vestingSchedule; release. Retrieved: 2026-10-02T17:03:46.020Z.

## Revision history

- 2026-10-02: First publication after primary-source research and independent automated verification.

## Cite this entry

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/