Circulating Supply

Circulating supply is the total number of tokens that are publicly available and can be traded. It excludes tokens that are: - Locked in vesting schedules (team, investor allocations) - Reserved for future development - Burned (permanently removed) - Not yet mined or created

Why it matters: - Market cap calculation: Market Cap = Price × Circulating Supply - Dilution risk: if circulating supply is 20% of total supply, there's significant future dilution coming - Price pressure: tokens unlocking from vesting contracts add to circulating supply, creating sell pressure

Circulating vs. total vs. max supply: - Circulating supply: tokens available today - Total supply: all tokens that exist (including locked) - Max supply: maximum tokens that will ever exist (Bitcoin: 21M, Ethereum: no hard cap)

A large gap between circulating and max supply is a warning sign. For example, if a token has 1B circulating supply but 10B max supply, early investors are holding onto a promise that has a 90% dilution ahead.

Always compare circulating supply to total supply when evaluating a token. The Fully Diluted Valuation (FDV) = Price × Max Supply shows what the project is worth if all tokens were in circulation today.

According to Messari data (2024), the median altcoin had only 45% of its total supply in circulation at the time of listing, meaning the average investor faced over 50% potential supply dilution from future token unlocks — a critical factor often overlooked in valuation analysis.