Tokenomics: market cap, FDV, supply and unlocks
Read valuation and supply fields together, distinguish estimates from known quantities and avoid treating a low token price as evidence of cheapness.
Before this lesson
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Price is only one part of valuation
Market capitalization is commonly displayed price multiplied by circulating supply. A token priced at $0.10 with one billion circulating units has $100 million market cap. Another priced at $100 with one million circulating units has the same value under that calculation. The unit price alone cannot establish relative valuation or investment merit.
FDV needs an explicit supply definition
Fully diluted valuation often multiplies current price by maximum supply, or another total-supply definition when no reliable maximum exists. Check the provider convention. A token with an unlimited or changing supply does not have a simple immutable final dilution number. Do not silently replace an unknown maximum with zero or treat different providers as using identical definitions.
One example, two denominators
Hypothetical price $2, circulating supply 100 million and maximum supply one billion produce $200 million market cap and $2 billion FDV. The circulating share is 10%. This does not predict a future $2 billion market cap, assume all tokens can be sold at $2 or prove that the current circulating estimate is independently verified.
Unlocks are supply events, not guaranteed sales
An unlock can remove a transfer restriction on team, investor or other allocations. Eligibility to transfer does not mean every unlocked token enters circulating supply immediately or is sold on an exchange. Separate scheduled amounts, actual on-chain transfers, circulating-supply methodology and execution data. A schedule can change with governance or contract terms.
Liquidity is different from capitalization
Market cap is a multiplication, not cash available to exit. A thin order book can have limited executable depth even when displayed capitalization is large. Volume is not automatically independent liquidity: market coverage, quote units and methodology matter. The crypto converter and order-book material help illustrate execution costs without validating the underlying project.
Token utility and control
Read what the token actually does, who can change supply or fees, how allocations are controlled and whether reported revenue belongs to token holders. Governance participation is not automatically a legal claim on profits. Separate project claims from verified contract behavior and primary documentation. A category or exchange listing does not establish safety.
Compare consistent fields
In Markets and Project Radar, preserve source labels and missing-value states. Confirm contract address and network before comparing similarly named tokens. Record the supply timestamp, unit, valuation price and provider definition. A stale supply number combined with a fresh price can produce a precise-looking but inconsistent result. Unknown supply should remain unknown.
Practice a dilution scenario
Use the fictional values below to calculate market cap and FDV separately. Then change circulating supply while holding price fixed and explain what the arithmetic does, without claiming price would actually stay fixed. This exercise does not rank tokens, forecast returns or treat an unlock as a guaranteed trading event.
Practical scenario
Calculate market cap in millions of dollars using circulating supply, not maximum supply.
Market cap = price × circulating supply; FDV uses a separately defined supply.
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Knowledge check
At $2, 100 million circulating tokens and one billion maximum tokens, what is market cap?
- $200 million
- $2 billion
- $2 million
Show explanation
Market cap uses circulating supply: $2 × 100 million = $200 million. The $2 billion number uses maximum supply.
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Primary sources and scope
Educational scenarios are not execution guarantees, forecasts or personal recommendations. Check current product rules at their source.
Content revised: . Editorial responsibility: TradingHub. No independent professional certification is claimed.