Why this topic matters
Fully diluted valuation, or FDV, multiplies the current token price by a total or maximum supply assumption. It describes a reference size if all defined units were circulating, and it complements circulating market cap.
A practical review order
A high FDV with a small circulating supply calls for a review of future releases and their market effects. If maximum supply is undefined or burn and issuance rules are complex, comparisons become less reliable.
Common mistakes to avoid
Compare unlock schedules, team and investor holdings, foundation wallets, fee-based demand, and the project’s definition of circulating supply with official and on-chain data. Unlocks do not guarantee selling, but they can change incentives and available supply.
Key takeaway
FDV is not a forecast of future value. It is a framework for thinking about supply scenarios and how future supply may relate to real demand.
Key point 5
The first step in understanding this topic is to avoid treating a headline or a single number as a conclusion. The meaning of How to understand fully diluted valuation can change with market conditions, comparison standards, and the measurement period. Start by defining what the concept describes, then consider when it is useful and where its limits appear.