Set it beside market capitalisation and the difference is obvious. Market cap uses <a href="/glossary/circulating-supply/">circulating supply</a>, the tokens actually available now. FDV uses the total that will exist once every scheduled unlock, team allocation, investor tranche and emission has been released. When most of the supply is still locked, the two figures can sit enormously far apart, and that gap is exactly the part of the story a headline number leaves out.
The reason FDV misleads is that it treats today's price as if it would survive a much larger supply. Prices come from the tokens available for trading, and when a locked allocation is released, new sellers enter a market that was priced without them. Assuming the price simply holds while supply multiplies is not a conservative assumption but an optimistic one. FDV is also easy to game, because a project can make its market cap look modest by releasing very little supply early while the dilution waits offstage.
Used properly, FDV is a comparison and a warning light rather than a valuation. A wide gap between market cap and FDV tells you that meaningful dilution is scheduled, and the useful next step is finding the unlock schedule: who holds the locked supply, when it releases and over how long. Where the figures come from matters too, since maximum supply can be undefined for a <a href="/glossary/token/">token</a> with open-ended issuance, so an FDV shown on a data site may rest on an assumption rather than a hard cap. Cross-check anything you see on <a href="/coins/">our coin pages</a> against the project's own documentation.
How to Evaluate a Crypto Project
Key takeaways
- FDV assumes today's price holds against tomorrow's much larger supply, which is the assumption most likely to break.
- A wide gap between market cap and FDV is a prompt to go and read the unlock schedule, not a verdict on value.
- Where a token has no hard maximum supply, any FDV figure you see rests on an estimate somebody chose to make.
Fully Diluted Valuation (FDV) — frequently asked questions
Should I look at market cap or FDV?
Both, and mainly the relationship between them. Market cap reflects the supply trading now, while FDV reflects the supply that will eventually exist. If the two are close, dilution is largely finished. If FDV is many times larger, a lot of tokens are still to be released, and knowing when they unlock tells you more than either number alone.
Does a high FDV mean a token is overvalued?
Not on its own, and it is not a signal to act on. FDV is arithmetic rather than analysis, and it says nothing about usage, revenue or whether a project delivers anything at all. Treat it as a reason to examine supply distribution and unlock timing, which is where the useful information lives. Nothing here is financial advice.
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