fdv vs market cap

What Is Fully Diluted Valuation (FDV)?

Fully Diluted Valuation (FDV) estimates the total potential value of a crypto project if all tokens were released and available on the market. FDV is calculated by multiplying the current token price by the maximum or eventual total supply of tokens. This metric gauges a project's long-term scale and potential, unlike traditional market capitalization, which only considers tokens currently in circulation. FDV is especially relevant for newly launched or low-circulation tokens, as it highlights future supply risks that may impact price.

Why Is Understanding FDV Important?

Knowing FDV helps investors assess whether a project's valuation is being "front-loaded" and anticipate potential price pressure from future token unlocks. In the crypto market, many new tokens launch with a small percentage of their total supply circulating (often just 5%-15%), making their market cap appear modest while FDV could be much higher. As locked tokens are gradually released—typically monthly or quarterly—the increased supply can dilute prices. Comparing FDV with market cap before investing can help identify projects with high FDV but low circulating supply, signaling possible sell pressure ahead.

For participants in Launchpad events, staking, mining, or secondary market trading, FDV is a critical metric for timing and sector selection. For example, two projects in the same sector may have similar prices, but one with a much higher FDV suggests more aggressive growth expectations—and higher risk.

How Does FDV Work?

FDV is typically calculated as "price × total supply or max supply," whereas market cap is "price × circulating supply."

For example: If a token has a max supply of 100 million, 10 million in circulation, and a price of $1, then the market cap is about $10 million, while FDV is about $100 million. The difference represents the future supply of 90 million tokens yet to be unlocked.

Token unlocks (also called vesting) refer to the release schedule for tokens held by teams, investors, or ecosystem funds. These are gradually made available for trading according to a preset timeline. If unlocks coincide with price rallies, the market may absorb the new supply; during weak periods, mass unlocks can drive prices down. You can think of this like staggered shipments: larger batches and weaker demand mean more downward price pressure.

Pay close attention to the distinction between "total supply" and "max supply." Some projects burn or mint tokens, changing total supply, while inflationary tokens may increase supply continuously per protocol. Always consult the project's whitepaper, official announcements, and actual on-chain data for accurate FDV calculations.

Where Is FDV Most Evident in Crypto?

FDV is prominently displayed on new token listing pages, project info sections, data platforms' valuation columns, and in token unlock calendar discussions.

On Gate's new listings or spot trading pages, project info typically shows "total supply, circulating supply, FDV, and market cap." For example, an AI token launching on Gate might show 10% circulating supply, a price of $0.5, and a max supply of 1 billion tokens—yielding a market cap of $50 million and an FDV of $500 million. Users assess this data to determine position size and timing, especially if substantial unlocks are scheduled monthly.

In Launchpad/Startup scenarios, projects announce initial circulation rates and vesting plans. While participation limits may seem small and prices low, an FDV well above sector averages signals high market expectations—and risk. If ecosystem growth is slow or unlocks are rapid post-launch, price pressure increases.

In DeFi mining, reward tokens are often distributed from non-circulating supplies, steadily increasing total supply. A high FDV warrants careful consideration of whether future token value may be diluted.

Futures trading is also impacted by FDV and unlock schedules. As major unlocks approach, market sentiment turns cautious, funding rates and price volatility rise, and short-term strategies should factor in event-driven risk.

How Can You Mitigate FDV-Related Risks?

1. Check Supply and Unlock Schedules: Review project whitepapers and official releases for details on "total/max supply," "circulating percentage," and "unlock timing." Cross-reference this with Gate's project info or data platforms like TokenUnlocks to confirm timelines and amounts.
2. Benchmark Against Sector Leaders: Compare your target project's FDV to top projects in the same category. If FDV is notably higher and fundamentals aren't validated, reduce your position size or wait for a better entry point.
3. Consider Events and Liquidity: Avoid high leverage during periods of major unlocks or when circulating supply is still low after listing. If you do participate, consider scaling in gradually, setting stop-losses, and using liquid order zones.
4. Review Token Utility and Buyback/Burn Plans: Tokens with clear use cases—such as staking, fee discounts, or network security collateral—and genuine revenue-driven buyback/burn mechanisms are less vulnerable to supply-side pressure. Weak utility combined with high FDV poses greater risks.
5. Monitor Dynamically: Every month, review progress on unlocks, ecosystem adoption, and price performance together. If unlocks exceed expectations or ecosystem development stalls, adjust your holdings promptly.

What Are Recent FDV Trends and Notable Data?

In 2025, new tokens generally follow a "low circulation, high FDV" pricing model—especially in AI, restaking, and L2 sectors. Listings and data platforms show most projects debut with only 5%-20% of their supply circulating, with dense unlock schedules in the first 6-12 months post-listing.

During Q3-Q4 2025, attention to "unlock events" surged: project page visits and "unlock reminder" subscriptions increased on data platforms as investors prioritized supply-side information. Compared to 2024, discussions shifted from pure price focus to an integrated view including price, supply dynamics, and FDV.

On secondary markets throughout late 2025, newly listed tokens with FDVs far above sector averages experienced higher volatility during unlock windows—unless strong fundamentals provided support. Projects with higher circulating percentages and smoother unlock schedules saw more stable price action.

Key data sources include exchange project info pages, CoinGecko's supply/FDV columns, and TokenUnlocks' quarterly unlock calendars/statistics for 2025. Always check data update timestamps and calculation methods when using these resources.

How Does FDV Differ From Market Cap?

The main difference lies in their scope: market cap reflects the current value based on circulating tokens only; FDV accounts for all tokens that will ever exist—even those still locked.

Using a numerical example: Price at $1; 10 million circulating; 100 million max supply. Market cap equals $10 million ("current scale"), while FDV equals $100 million ("potential scale after full release"). If 5 million tokens are unlocked monthly over a year—raising circulation to 70 million—the absence of new demand would likely put downward pressure on price.

It's similar to company stocks: market cap is "publicly traded shares × share price," whereas FDV is "total shares (including options/restricted stock) × share price." Crypto token unlocks often happen faster than equity vesting schedules—making FDV an immediate factor in short- to mid-term pricing.

Key Terms

• Fully Diluted Valuation (FDV): The estimated market cap if all tokens were issued; calculated as total token supply times current price.
• Market Cap: The value derived from multiplying circulating token count by current price; represents actual market value.
• Circulating Supply: The number of tokens currently available for trading; excludes locked or unissued tokens.
• Token Release Schedule: The timetable and rules for gradual unlocking and distribution of tokens set by the project team.
• Tokenomics: The study of designing token allocation, distribution models, incentive mechanisms, etc.
• Dilution Risk: The risk that significant future token releases may drive down price.

FAQ

I see a project with a $100 million market cap and $1 billion FDV. Why such a big difference?

Market cap only counts currently circulating tokens; FDV includes all future unlocked tokens at today's price. In short: market cap shows real-time scale; FDV shows theoretical scale if all tokens were circulating. A wide gap means many tokens remain locked—future unlocks could increase supply and lower prices.

Why do some projects have especially large gaps between FDV and market cap? What does this mean?

Big differences often indicate lengthy vesting periods or substantial uncirculated holdings by teams/investors. This can signal strong long-term planning—or hidden risk from pending sell pressure. Always review the token release schedule to understand how much will be unlocked over the next 6-12 months.

Should I focus more on market cap or FDV before investing? Which matters most?

Both are important but serve different purposes. Market cap reflects current real-world interest; FDV helps forecast long-term inflation risk from unlocks. Examine both together: if FDV/market cap exceeds 5x, be wary of future inflation pressure.

Does a low FDV mean a project is undervalued and worth buying?

Not necessarily. Low FDV may mean most tokens are already circulating (which is positive), or simply that the project lacks traction (a negative). Don't rely solely on FDV—consider fundamentals, community strength, and real-world utility as well.

How can beginners quickly judge if a project's FDV is reasonable?

Benchmark against leading projects in the same category on Gate or other platforms to set reference levels for FDV/market cap ratios. Also review token unlock schedules—if large amounts will be released in the next six months, proceed cautiously. As a rule of thumb: mature projects tend to have an FDV/market cap ratio between 1.5x–3x; ratios above 10x warrant extra caution.

References & Further Reading

• https://www.coingecko.com/learn/what-is-fully-diluted-valuation-fdv-in-crypto
• https://coinledger.io/learn/what-is-fdv-crypto