What Is FDV (Fully Diluted Valuation)?
Also known as: Fully Diluted Valuation, Fully Diluted Market Cap, Fully Diluted Market Capitalization
In short
FDV (fully diluted valuation) is a metric calculated by multiplying a cryptocurrency's current price by its total token supply that can ever be issued, showing the theoretical market value if the entire supply were in circulation.
While market cap takes only the circulating supply into account, FDV also includes all tokens that are still locked, allocated to the team and investors, or to be minted in the future. For example, if a token with a maximum supply of 1 billion has 100 million in circulation and its price is $2, its market cap is $200 million and its FDV is $2 billion.
A large gap between the two values indicates that a significant amount of new supply may enter the market in the future. For this reason, token unlocks and vesting schedules are examined together with FDV. The possibility that unlocks create selling pressure for low-float tokens is a frequently debated topic in the market.
FDV has its limits too. For projects with no maximum supply, or whose supply changes through inflation or a burn mechanism, the calculation can give different results depending on the assumed supply figure. In addition, FDV assumes that the entire supply would be valued at today's price; it is not a price forecast but a theoretical indicator used to compare projects.
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