

What do you think about the market value and circulation of currency projects? Why is FDV important?
Jul 11, 2025 pm 07:54 PMUnderstanding the market value and circulation of a currency circle project is crucial to assessing its current scale and potential valuation. Market value is a common indicator for measuring the current total value of a cryptocurrency project, and it directly reflects the market's recognition and scale of the project. The circulation volume reveals how many tokens are already available for trading in the market.
Calculation and significance of market value and circulation
1. Market Cap is calculated relatively directly, which is equal to the market price of a single token multiplied by the total amount of tokens in circulation in the current market .
2. Circulating Supply refers to the number of tokens that can be traded and circulated freely in the market . This number is dynamically changed because tokens may be locked, destroyed, or released according to a preset schedule.
3. Market value provides an overall sense of scale for a project, which is often used to compare the relative sizes between different projects . A high market value usually means that a project already has a certain degree of market recognition and liquidity, but it may also indicate that its growth space is relatively limited.
4. Circulation is the basis for calculating market value, and its changes directly affect market value. Understanding the mechanisms of change in circulation (such as unlocking plans) is also important to predict potential market selling pressure.
Circulation and total supply
1. Total Supply refers to the total number of tokens that have been minted or existed in a cryptocurrency project minus the number of tokens that have been destroyed .
2. Max Supply refers to the total number of tokens that the cryptocurrency project will never exceed in design . Some projects do not have a maximum supply and can theoretically be infinitely cast.
3. The flow rate is usually less than or equal to the total supply and less than or equal to the maximum supply (if the maximum supply is set). The volume of circulation will change as the token is released, unlocked or destroyed .
4. Total supply and maximum supply provide information on the long-term potential or inflationary nature of the project token economics, helping to understand the scenario after all tokens finally enter circulation .
What is FDV?
1. The full name of FDV is Fully Diluted Valuation, which means complete dilution valuation .
2. The FDV is calculated by multiplying the current market price of a single token by the maximum supply of the item (if the maximum supply is set).
3. If the project does not set a maximum supply, the total supply or some theoretical upper limit is usually used for the estimate, but this is not as intuitive as the project with a clear maximum supply.
4. FDV represents the total market value of the project calculated based on the current market price after all tokens (including currently uncirculated tokens, such as team-holding, locked, unreleased, etc.) enters circulation .
The importance of FDV
1. FDV provides a more comprehensive perspective on long-term valuation . It takes into account all future tokens that may enter the market, thus helping to assess the potential market cap size of the project after it is fully released.
2. Comparing current market value with FDV can help you understand the potential supply dilution level in the future . If FDV is much higher than the current market value, it means that a large number of tokens will enter the market in the future, which may bring potential selling pressure or have a dilution effect on the price.
3. For early stage projects, the circulation volume is usually very small, while the FDV can be very high. In this case, high FDV relative to the current market value can indicate potential risks : that is, the current smaller market value may be due to the fact that most tokens have not been unlocked yet, and once a large number of tokens are unlocked into circulation, it may have a significant impact on the price unless the project fundamentals can support such a high fully diluted valuation.
4. Analyzing FDV helps compare projects with different token economic models on a more fair valuation basis , especially those with large differences in current circulation and total supply.
5. By observing the gap between FDV and current market value, we can see whether the market has fully considered future token release factors . The larger the gap, usually means the greater the impact of future supply releases on prices, and a careful study of the project's token unlocking schedule and vesting mechanism is required.
6. FDV is not a guarantee of the success of the project , it is just a valuation tool. The actual performance of a project ultimately depends on its technological development, community construction, market adoption and other factors.
The above is the detailed content of What do you think about the market value and circulation of currency projects? Why is FDV important?. For more information, please follow other related articles on the PHP Chinese website!

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