what is fdv in crypto
What Does Fully Diluted Valuation (FDV) Mean?
FDV, or Fully Diluted Valuation, represents the estimated total market value of a crypto project if all tokens were unlocked and in circulation.
The calculation for FDV is: “current token price × total supply.” Total supply refers to the maximum number of tokens the project plans to issue, including those not yet in circulation. Circulating supply, on the other hand, is the amount of tokens currently available for trading in the market. These two numbers are not the same.
For example: If a token’s price is $2 and the total supply is 1 billion tokens, the FDV would be $2 billion. If only 5% of tokens (50 million) are currently circulating, the circulating market cap is “price × circulating supply” = $100 million. This means FDV can be very high, while the actual tradable volume remains relatively small.
Why Should You Understand FDV?
FDV directly impacts your assessment of price, risk, and project scale.
Many new tokens have a low circulating supply but a high FDV. Focusing solely on FDV may make a project seem like a “giant,” but in the short term, price is more influenced by circulating supply and token unlock schedules. Understanding FDV helps you distinguish between a project’s “long-term potential size” and its “current real scale.”
FDV is also useful for comparing projects within the same sector. For instance, two Layer 2 or AI tokens might have similar prices, but if their total supplies differ, their FDVs can be vastly different. By combining user data and revenue figures with FDV, you can more objectively evaluate whether a token is over- or under-valued.
How Does FDV Work?
FDV is determined by both token price and total supply, but real-world implications depend on token unlock schedules.
Total supply is rarely released all at once. Tokens allocated to teams, investors, or ecosystem funds are typically locked and released gradually over time—a process known as vesting or time-based unlocking. As new tokens enter circulation, available supply increases; if demand stays constant, this can put downward pressure on price.
To recap: FDV = price × total supply. While price fluctuates daily and total supply remains relatively fixed, the circulating supply changes over time. As circulating supply rises, investors pay close attention to shifts in supply and demand around token unlock events. Therefore, when assessing FDV, it’s crucial to monitor both the project’s unlock schedule and its circulating ratio.
Another example: Price is $2, total supply is 1 billion tokens, FDV is $2 billion. If 1% of tokens are unlocked each month, after six months, an additional 6% will be circulating. If these newly unlocked tokens are mostly sold, price could drop to $1.6–$1.8, bringing FDV down to $1.6–$1.8 billion. This shows how price and circulation dynamics are closely linked.
Where Does FDV Matter Most in Crypto?
FDV is most significant during new token launches, Launchpad events, and DeFi incentive programs.
On exchange launchpads or new listings, projects disclose both total and circulating supply—sometimes along with unlock schedules. Investors often compare the launch FDV against similar projects to judge if the initial valuation is reasonable. For example, on Gate, reviewing details like “total supply” and “circulating supply,” along with official announcements about token releases, gives a more complete picture of FDV and potential future sell pressure.
During Launchpad events or early-stage offerings, FDV determines the project’s “full valuation” at purchase time. If initial circulating supply is low, even a modest price increase can drive FDV sharply higher—this doesn’t always reflect improved fundamentals but rather price sensitivity due to limited liquidity.
In DeFi yield farming and ecosystem incentives, projects distribute tokens as rewards. If FDV is high and tokens are released quickly, constant influx of new tokens can dilute returns for liquidity providers—even if annualized yields appear high on paper. Real returns may be eroded by falling prices, so both risks and rewards must be considered.
How Can You Reduce FDV-Related Risks?
Break down key information before trading to better manage risk.
Step 1: Check the circulating ratio. Divide current circulating supply by total supply. The lower the ratio, the more tokens remain to be released—and the greater potential for short-term sell pressure.
Step 2: Review the unlock calendar. Pay close attention to project announcements and third-party calendars detailing upcoming unlock amounts and dates. Avoid trading heavily right before or after major unlock events when volatility is highest.
Step 3: Benchmark against peers. Compare FDV alongside user metrics, revenue, fees, TVL (total value locked), and other operational data from similar projects to judge if valuation is relatively high or low.
Step 4: Use staged trading. Spread your trades across different times—especially before major unlocks or events—to avoid concentrating exposure at a single moment.
Step 5: Set risk controls. Use limit orders and stop-losses; manage your position size appropriately. On Gate, you can set price alerts to react quickly to sudden market moves.
Step 6: Focus on utility and buybacks. If a token has real-world use cases, genuine fee generation, or robust buyback/burn mechanisms, long-term supply-demand is healthier and high FDV may pose less risk.
What Are Recent Trends or Data Points About FDV?
Over the past six months—and projected into 2025—new tokens are commonly launched with “low circulating supply and high FDV.”
According to public data from aggregators like CoinGecko and TokenUnlocks (Q3–Q4 2025), initial circulating ratios for new tokens are often between 5% and 15%, with FDV-to-circulating market cap multiples frequently ranging from 10x to 30x. Unlock events are expected to remain dense through early 2026—especially in sectors like AI, gaming, and Layer 2 ecosystems—resulting in significant market volatility around large monthly token releases.
In terms of price action, throughout 2025 there have been repeated cases of “high FDV, low circulation” tokens experiencing rapid short-term gains followed by sharp corrections. This is usually due to early concentrated holdings and increased supply from unlocks outpacing demand growth. More stable projects typically show more reasonable valuations once they disclose transparent release schedules and actual revenue figures.
For investors, this means that as we head into early 2026, tracking “upcoming unlock schedules” and “alignment between FDV and operational metrics” should be top priorities—rather than just looking at listing prices or short-term price spikes.
What’s the Difference Between FDV and Circulating Market Cap?
One represents the “full potential,” while the other reflects the “current scale.”
FDV calculates a project’s total valuation by assuming all planned tokens are issued at today’s price. Circulating market cap only considers currently tradable tokens—giving a more accurate snapshot of real-time trading scale.
Using our earlier example: Price $2 × total supply of 1 billion = $2 billion FDV; if only 50 million are circulating, then market cap is $100 million—a 20x difference. In practice, short-term prices are more affected by circulating supply and unlock events; long-term valuation ceilings relate more to FDV. Considering both metrics helps you avoid misjudging a project’s actual scale and risk profile.
Related Terms
- Fully Diluted Valuation (FDV): The total market value if all possible tokens were in circulation.
- Circulating Supply: The number of tokens currently available for trading—used for calculating real-time market cap.
- Max Supply: The hard cap on total token issuance set by the project—determining future dilution potential.
- Token Unlock: The scheduled release of previously locked tokens into the market—which can increase selling pressure.
- Market Cap: The product of current circulating supply and token price—reflecting real-time project valuation.
FAQ
Why Is There Such a Big Gap Between FDV and Market Cap?
FDV (Fully Diluted Valuation) includes all tokens that could eventually enter circulation, while market cap only counts those already available for trading. A large gap means a significant portion of tokens remain locked up; this implies possible future selling pressure as more tokens are released—a key factor in assessing true project value.
Should I Use FDV or Market Cap When Evaluating a Project?
You should consider both metrics together. Market cap shows the current trading value; FDV indicates risk exposure once all tokens are unlocked. If FDV is much higher than market cap, there’s considerable room for future dilution and potential sell pressure. New investors should reference both data points—not rely on one alone.
How Can I Quickly Find a Token’s FDV?
You can check a project’s details page on major exchanges like Gate or visit data aggregators such as CoinMarketCap or CoinGecko—these platforms display both FDV and market cap with up-to-date information for easy cross-project comparison.
Are Projects With Very High FDVs Always Too Risky?
A high FDV isn’t inherently negative—the key factors are release schedule transparency and project fundamentals. Some large projects have high FDVs due to mature ecosystems or wide-ranging token utilities, making them relatively stable. However, if a high FDV far exceeds market cap without real use cases or utility, risks increase significantly. In-depth analysis of tokenomics is essential before making investment decisions.
Is It Normal for Newly Issued Tokens to Have Sky-High FDVs?
Yes—it’s common for new projects to set low initial prices but large total supplies, resulting in inflated FDVs at launch. This often masks underlying risks: subsequent token releases can trigger sharp sell-offs (“unlock dumps”). Always check token release schedules and favor projects with transparent vesting arrangements.
References & Further Reading
Related Articles
Gate Research: 2024 Cryptocurrency Market Review and 2025 Trend Forecast
Altseason 2025: Narrative Rotation and Capital Restructuring in an Atypical Bull Market
