What Is Fully Diluted Valuation (FDV)?

In brief

FDV = current reference price × provider-defined fully diluted supply

CoinMarketCap currently defines FDV as price times max supply. CoinGecko’s educational methodology describes price times total supply and notes that max supply may be used in some contexts. Other dashboards may select a documented cap, total supply net of burns, or projected issuance.

That disagreement is not cosmetic. For a token with 100 million units issued today and an enforceable 1 billion cap, price × total supply is one tenth of price × max supply. Both products may appear under “fully diluted” labels unless the provider states its convention.

FDV is scenario arithmetic, not valuation certainty. Its price comes from the currently traded float, while its supply may include units that cannot trade yet or may never be issued.

Why calculate it?

Circulating market cap can hide a large gap between today’s public float and a token’s broader issuance plan. Suppose:

• price: $4;
• circulating supply: 25 million;
• provider-defined fully diluted supply: 250 million.

Circulating market cap is $100 million. FDV is $1 billion. The ten-to-one gap signals that the fully diluted multiplier is ten times the current circulating multiplier under those inputs.

It does not show that $900 million of new money must enter, that price will remain $4, or that 225 million tokens will be sold. It tells the reader to inspect the remaining supply, schedule, recipients, authorities, and market depth.

“Fully diluted supply” is not standardized

A provider may use:

• max supply net of burns it recognizes;
• current total supply including locked units;
• total supply plus scheduled future issuance;
• a protocol-specific projected terminal supply;
• no FDV at all when no defensible upper figure exists.

The choice should follow the asset’s rules. Bitcoin has a consensus schedule approaching slightly less than 21 million BTC, so a terminal-supply scenario is supportable. Ethereum has continuing validator issuance and variable EIP-1559 burn but no fixed maximum, so a Bitcoin-style “all ETH that can ever exist” input does not exist.

ERC-20’s totalSupply() does not solve this problem. The standard requires a function that reports current supply but does not define future mint authority, a cap, or fully diluted supply. Proxy upgrades, governance, migration contracts, and token-specific emission rules can all matter.

The hidden constant-price assumption

FDV takes a price formed by trades in the currently available market and applies it to a larger supply. This holds price constant while changing the quantity multiplier.

Real markets do not hold everything else constant:

• holders may anticipate an unlock before it occurs;
• recipients may hold, stake, transfer, or sell;
• buyers may change their demand;
• liquidity providers may add or remove depth;
• emissions may pay for useful activity or merely redistribute ownership;
• the protocol, governance, or issuer may change the schedule.

An unlock makes existing units transferable; it is not necessarily a mint. Either event can affect expectations, but neither mechanically sets the future price. Gleb Kurovskiy’s EPFL thesis provides independent evidence that token lockups and discrete unlock events are real supply-management features and documents an average price effect in its studied sample. That empirical result is not a universal forecast for every token or unlock.

Reading the FDV-to-market-cap gap

When the same provider and price are used:

FDV ÷ circulating market cap = fully diluted supply ÷ circulating supply

This identity follows from cancelling the common price. It is a supply-multiplier ratio, not a return forecast or a direct dilution percentage.

A large ratio can point to:

• unvested team or investor allocations;
• treasury units excluded from public float;
• future mining, staking, or incentive emissions;
• a large max supply relative to current issuance;
• incompatible or stale provider classifications.

A ratio near one can mean the provider’s fully diluted and circulating inputs are close. It does not prove that minting is impossible, ownership is dispersed, liquidity is deep, or insiders have no inventory. If the cap can change, today’s ratio can change too.

Unlocks, emissions, and dilution

These terms should not be collapsed:

Unlock: existing tokens become transferable. Total supply may stay unchanged, while a provider’s circulating figure may rise.

Emission or mint: new units are created under protocol or contract rules. Total supply rises.

Treasury distribution: existing units move from a treasury to recipients. It can change public float without changing total supply.

Dilution: a holder’s percentage of the relevant supply falls when additional units go to others. If a holder owns 1 of 100 units and 100 new units are issued to other accounts, the holder moves from 1% to 0.5%. FDV itself is not that percentage.

An FDV gap shows potential supply expansion under the chosen definitions. It does not identify which mechanism closes the gap.

Where FDV misleads

Unsupported maximum. A whitepaper number is weak if an admin can mint beyond it or migrate to a new contract.

Inconsistent labels. One provider’s max-supply FDV should not be compared directly with another provider’s total-supply FDV without recalculation.

Stale burns or migrations. A provider may continue using an obsolete cap after units are verifiably destroyed or contracts are replaced.

Double-counted supply. Future emissions must not be added again if already included in the max figure. Bridged representations should not be treated as independent native issuance without a documented reason.

Fragile reference price. A high price formed by a small float in a shallow market can create an enormous FDV even though a modest sale would move the price.

False enterprise analogy. Token FDV does not automatically equal equity value, enterprise value, protocol assets, TVL, or revenue. The token’s legal and economic rights must be examined separately.

A useful FDV audit

Before relying on an FDV:

1. Write down the provider’s exact formula.
2. Identify whether the multiplier is total, max, or projected supply.
3. Verify burns, mint authority, governance, proxies, and migrations.
4. Separate already-minted locked units from not-yet-issued emissions.
5. Read the dated vesting and emission schedule.
6. Identify who receives each allocation.
7. Compare the unlock size with actual market depth without assuming every unit will sell.
8. Recalculate alternative scenarios at different prices and supply definitions.

The result is most useful as a prompt for supply analysis. Calling it a “valuation” does not make its assumptions certain.