What Is Fully Diluted Valuation?

The basic formula is current price multiplied by the assumed fully diluted supply. Data providers may use maximum supply, total supply, or another project-specific estimate, so the supply basis should be checked before comparing values.

FDV uses today's price for units that may not become available for years. That simplifying assumption makes the metric easy to compare but limits what it can predict.

Circulating market cap describes the estimated value of units currently circulating. FDV describes a hypothetical value using a larger supply assumption. The gap between them can signal that substantial issuance or unlocks remain.

A large gap is a prompt for further research, not proof that price must fall. Demand, adoption, token utility, burns, staking, and the pace of distribution can all change while supply expands.

Tokens may enter circulation through investor vesting, team allocations, ecosystem incentives, validator rewards, or protocol emissions. The timing and recipients matter as much as the headline amount.

A gradual distribution over many years creates a different market condition from a large near-term unlock. Public schedules can also change through governance or contract upgrades, so they should be treated as current plans rather than immutable promises unless enforced by unchangeable code.

FDV is most useful when combined with supply and liquidity context.

• Confirm which supply figure the provider uses.
• Compare circulating supply with total or maximum supply.
• Review the timing, purpose, and recipients of future distributions.
• Check trading liquidity rather than assuming every unit could trade at the displayed price.
• Avoid treating FDV as enterprise value or guaranteed future market cap.

Some assets have no fixed maximum supply, making fully diluted assumptions dependent on a chosen time horizon. Other projects may burn tokens or change issuance rules. Wrapped or bridged assets can also complicate supply accounting.

Because both price and supply assumptions can change, FDV should be described as a scenario metric. It adds perspective to current market cap but cannot replace analysis of token distribution, demand, governance, and liquidity.