Market cap and FDV
Circulating market capitalization multiplies price by tokens currently circulating. Fully diluted valuation multiplies the same price by maximum or fully diluted supply. The gap highlights potential future supply, but FDV is neither fair value nor a forecast of future market capitalization.
The assumption in the formula
The formula assumes every not-yet-circulating token could trade at today's price. A large release can change the price because demand and liquidity do not remain fixed. When supply is uncapped or governance can alter issuance, even the denominator is not a permanent fact.
Low-float distortion
A small initial float can establish a price with limited trading and then project that price across the entire future supply, producing a large FDV. Looking only at circulating market cap creates the opposite blind spot by ignoring allocations to teams, investors, foundations, and incentives. Read both and calculate the circulating percentage.
Treat unlocks as a timeline
The actual unlock timeline is more useful than a static allocation chart. Record dates, amounts, recipients, linear or cliff releases, and any observed changes. An unlock does not guarantee a sale, but its size relative to normal trading volume frames a realistic liquidity question.
A numerical example
At a price of 10, with 10 million circulating tokens and 100 million maximum supply, circulating market cap is 100 million and FDV is 1 billion. A tenfold gap does not predict a decline, but it raises the burden of explaining how future demand could absorb future supply.
How to use FDV
Place FDV, circulating market cap, the next twelve months of unlocks, average volume, fees, and usage on one page. If supply figures differ across services, reconcile them with the contract and primary documentation. FDV works best as a scenario tool connecting dilution and liquidity, not as a price target.