03 Apr 2025

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What Is FDV and Why It Matters to Crypto Investors

Fully Diluted Valuation (FDV) is a crucial metric for assessing the investment potential of crypto projects. This article explains how FDV is calculated and how it helps investors spot promising opportunities.

Fully Diluted Valuation (FDV) is a crucial metric for assessing the investment potential of crypto projects. This article explains how FDV is calculated and how it helps investors spot promising opportunities.

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What Is FDV and How Is It Different From Market Cap?

FDV represents the maximum potential market value of a crypto project, calculated based on the total supply of tokens, including those that have yet to be issued. 

It’s important to note that FDV is often a theoretical number. Only a small fraction of projects ever reach full circulation of their token supply, excluding burned tokens. This scenario is most common with NFT collections but even then comes with exceptions.

FDV is an essential metric for investors aiming to understand the true scale and long-term potential of a crypto project. While FDV and market capitalization are closely related, they are distinct metrics that provide unique insights into a project’s valuation.

Market capitalization is calculated by multiplying the number of tokens currently in circulation by the current price of a single token. As the token’s price rises, so does the market capitalization.

FDV, however, considers the project’s total potential valuation by multiplying the current token price by the maximum possible supply, including tokens that have not yet been issued. This provides a more comprehensive view of the project’s potential value if all tokens are eventually brought to market.

Differences Between FDV and Market Cap. Source: Reddit

What is FDV and why is it important for traders? – The Coinomist

Alt: Market capitalization shows real-time value, while FDV captures future potential that remains unseen in the market.  – The Coinomist

What Is FDV and Why It Matters to Crypto Investors – The Coinomist

In rare cases where all tokens are already in circulation, market capitalization and FDV are the same. However, many projects with relatively low market caps have substantial token unlocks scheduled in the future. In these instances, FDV and the token emission schedule are critical indicators that could significantly affect the asset’s future value.

How to Calculate FDV

The FDV formula is straightforward.

For example, if a token is priced at $10 and has a total maximum supply of 100 million tokens, its FDV would be $1 billion. This calculation accounts for all tokens, including those not yet in circulation, such as tokens locked in staking, reserved for future allocations (e.g., developer incentives), or designated for liquidity purposes.

For a clearer understanding of FDV, let’s break down two examples: Solana (SOL) and Axie Infinity (AXS).

Example 1: Solana (SOL)

At the time of writing:

  • Current price: $243.5
  • Circulating supply: 486.59 million SOL
  • Maximum supply: 592.67 million SOL

FDV Calculation for Solana:

FDV = $243.5 × 592,678,000 = $144,315,145,000 

While Solana’s market capitalization, based solely on its circulating supply, is $118.77 billion, its FDV reveals a potential valuation of $144.3 billion when or if all tokens are eventually issued and available in the market.

FDV Calculation for SOL. Source: coinmarketcap

What is FDV and why is it important for traders? – The Coinomist

Alt FDV Calculation for SOL – The Coinomist

What Is FDV and Why It Matters to Crypto Investors – The Coinomist

The $26 billion difference between Solana’s FDV and market cap suggests that the project is nearly “fully operational.” This indicates minimal risk of significant downward pressure on the token’s price from the release of locked tokens into circulation.

Example 2: Axie Infinity (AXS)

  • Current price: $5.75
  • Circulating supply: 157.95 million AXS
  • Maximum supply: 270 million AXS

FDV Calculation for Axie Infinity:

FDV = $5.75 × 270,000,000 = $1,552,500,000

In this example, Axie Infinity’s FDV is nearly twice its current market capitalization of $914.7 million. This disparity indicates the potential for increased downward pressure on the token’s price if a significant number of additional AXS tokens are released into circulation.

FDV Calculation for AXS. Source: coinmarketcap

What is FDV and why is it important for traders? – The Coinomist

Alt FDV Calculation for AXS – The Coinomist

What Is FDV and Why It Matters to Crypto Investors – The Coinomist

Why FDV Matters to Crypto Investors

FDV offers a more comprehensive understanding of a project’s true worth, which may not be immediately evident when looking only at its current market capitalization. Market cap is determined by the number of tokens in circulation multiplied by their current price, potentially giving an incomplete or misleading impression of the project’s overall value.

If a large portion of tokens has yet to be released, there is a risk of dilution: as the circulating supply increases, token prices often come under downward pressure. For instance, if early investors or the development team—who may hold a sizable share of tokens—begin selling large amounts, the token’s price could see a significant drop if market demand cannot match the new supply.

FDV also enables investors to compare projects with similar circulating supplies and technologies. Two projects may share the same market cap today but have vastly different FDVs, indicating potential risks or opportunities for investors.

FDV reveals important details about a project’s token issuance structure. Investors can examine how and when additional tokens will enter the market, anticipating how these events may impact price dynamics. 

Information about tokenomics is typically found in project documentation, on platforms like CoinGecko, via services like Etherscan, or within token smart contract descriptions.

Less than 25% of Solana’s total token supply is held by its core team. Source: haimanh.vn

What is FDV and why is it important for traders? – The Coinomist

Alt Solana tokenomics – The Coinomist

What Is FDV and Why It Matters to Crypto Investors – The Coinomist

FDV: A Red Flag for Overvalued Projects

A project is often deemed overvalued when its FDV far exceeds its current and anticipated utility or the real demand for its token. This typically happens under the following circumstances:

  1. Projects with large-scale token emissions planned for the future often see investors selling off tokens before major unlock events. These events are usually announced in advance via the project’s official social media channels and website.
  2. Excessive marketing and hype can create inflated expectations that are not supported by the project’s actual progress or results.

Example: Internet Computer (ICP)


Internet Computer, launched by the Dfinity Foundation in May 2021, serves as a cautionary tale. The project debuted amid massive hype, with its FDV reaching hundreds of billions of dollars.

However, a large portion of its tokens were locked, and the promised robust ecosystem had yet to materialize. As token unlocks began and the market realized that development was proceeding far slower than expected, the price of ICP tokens plummeted by 99%. The overvaluation stemmed from unrealistic expectations that weren’t matched by the project’s immediate utility.

Read more: What is Internet Computer (ICP)?

FDV isn’t just helpful for identifying overvalued projects—it can also highlight undervalued assets that may be worth investors’ attention.

A project is considered undervalued if its FDV appears low relative to its technical capabilities, growth prospects, and current utility. This often occurs in the following scenarios:

  1. The project is in its early phases, but its technology or solutions show significant long-term potential.
  2. The project is overlooked due to limited marketing efforts or a temporary lull in market attention.
  3. The project’s tokenomics are well-structured, with a large portion of tokens already in circulation.

Example: Polygon (MATIC)


During its early stages (2020–2021), Polygon’s FDV was relatively low, despite the project’s pivotal role in addressing Ethereum’s scalability issues. As Ethereum faced congestion and soaring gas fees, Polygon offered scalable solutions through its sidechains. Investors who identified its potential early profited significantly as MATIC gained traction in DeFi, NFTs, and other applications. The initial low FDV failed to account for the token’s eventual utility and widespread adoption.

However, the launch of Polygon 2.0 fell short of inflated expectations, and additional token emissions during this period put downward pressure on MATIC’s price. Despite this, early investors who recognized the project’s technical potential in 2021 managed to realize substantial returns before the price drop.

Price Dynamics of MATIC. Source: coingecko

What is FDV and why is it important for traders? – The Coinomist

Alt Decline in MATIC price following additional token emissions – The Coinomist

What Is FDV and Why It Matters to Crypto Investors – The Coinomist

As demonstrated, FDV is an essential metric for evaluating cryptocurrency projects, enabling investors to make more informed and strategic decisions. It offers a clear view of a token’s long-term potential, helps identify potential risks, and provides insight into future price pressures.

Neglecting FDV—especially for long-term investments—can lead to missed opportunities for unrealized profits or even the loss of initial capital.

The content on The Coinomist is for informational purposes only and should not be interpreted as financial advice. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or reliability of any content. Neither we accept liability for any errors or omissions in the information provided or for any financial losses incurred as a result of relying on this information. Actions based on this content are at your own risk. Always do your own research and consult a professional. See our Terms, Privacy Policy, and Disclaimers for more details.

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