Fully Diluted Valuation

Fully Diluted Valuation (FDV) is a calculated metric that estimates the value of a cryptoasset if its entire potential supply were taken into account.

A simplified formula is:

FDV = Current Price × Max Supply

If an asset does not have a fixed maximum supply or uses a dynamic issuance model, FDV can depend on the methodology used to estimate future supply.

FDV vs. market capitalization

Market capitalization generally uses circulating supply, while FDV uses the full potential supply.

For example, if a token trades at $2, has 100 million units in circulation, and has a maximum supply of one billion, its market cap is $200 million while its FDV is $2 billion.

Why the difference matters

A large gap between market cap and FDV can indicate that a substantial portion of the token supply has not yet entered circulation. Future issuance or token unlocks can change available supply and the relative ownership share of existing holders.

FDV is not a forecast of future market capitalization. It is a calculated value based on the current price and assumed full supply.