Market Cap vs Fully Diluted Valuation (FDV): The Altcoin Supply Inflation Trap
Learn how low-float, high-FDV tokenomics create massive sell pressure through scheduled venture capital and team token unlocks.
Identify token dilution risks by calculating the ratio between circulating supply and total token supply before investing in altcoins.
1. The FDV Trap Explained
Circulating Market Cap measures the current price multiplied by tokens actively trading on the market today. Fully Diluted Valuation (FDV) measures market cap assuming 100% of future tokens are unlocked.
When a protocol launches with only 5% of tokens in circulation and an FDV of $10 billion, hundreds of millions in token unlocks will flood the market over subsequent years.
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