Understanding Fully Diluted Valuation (FDV) in Cryptocurrency Markets
Fully Diluted Valuation (FDV) measures a cryptocurrency project’s total potential market capitalization if all tokens were in circulation. Unlike market cap, which reflects current supply, FDV accounts for future token releases—offering investors a clearer picture of long-term valuation risks and opportunities.
High FDV relative to market cap often signals impending inflation pressure as locked tokens enter circulation. This metric proves particularly useful when comparing DeFi protocols, gaming tokens, or LAYER 1 blockchains with differing emission schedules.
A hypothetical token priced at $1 with 100 million circulating supply and 1 billion max supply WOULD show a $100 million market cap but a $1 billion FDV—revealing potential 10x dilution risk that raw market data obscures.
