FDV (Fully Diluted Valuation)

FDV is calculated by taking the maximum supply of a token — including tokens locked under investor vesting schedules, team allocations, treasury accounts or otherwise kept out of general circulation — and multiplying this by its current price. For example, if a token has a maximum supply of 100 million and a price of $2, its FDV is $200 million.

This is distinct from a token’s market cap, which uses only the token’s current circulating supply, disregarding any future issuance or locked tokens. The difference between the two metrics can therefore reveal important supply dynamics, reflecting the value of tokens not currently in circulation.

If the FDV is many times higher than the market cap, this can indicate that a large percentage of tokens are still due for future unlocks, indicating potential future selling pressure. If the FDV and market cap for a token with a fixed maximum supply are identical, then the token has achieved full dilution, with its entire maximum supply in circulation.

However, some cryptocurrencies such as ETH lack a fixed maximum supply; new tokens can continue to be issued for as long as the network is in operation. This can complicate FDV calculations, as there is no fixed maximum supply on which to base the calculation.

Investors should therefore consider FDV alongside market cap, tokenomics, vesting schedules and protocol minting mechanics rather than taking it in isolation.