FDV

What is FDV?

FDV, or Fully Diluted Valuation, is a metric that represents the total market value of a cryptocurrency project if its entire maximum supply of tokens were currently in circulation. It provides a "future-looking" valuation compared to the current market cap.

How does FDV work?

FDV is calculated using a simple formula:

FDV = Current Market Price * Max Token Supply

If a project has 100 million tokens in circulation but a total max supply of 1 billion, and the current price is $1, the market cap is $100 million, while the FDV is $1 billion. This reveals how much "dilution" will occur as more tokens are released over time.

Why does FDV matter?

FDV is a critical risk metric for investors. A high FDV relative to a low current market cap suggests that a massive amount of new supply will enter the market in the future, which could put significant downward pressure on the token's price unless demand grows proportionally.

Key features of FDV

• Measures long-term valuation potential
• Highlights future dilution risk
• Based on maximum theoretical supply
• Independent of current circulating supply
• Vital for comparing projects with different vesting schedules

Examples of FDV

If a new DeFi token launches with only 5% of its supply available, its market cap might look small ($50 million), but its FDV could be massive ($1 billion).

Investors use this to determine if the project is actually "cheap" or just has very low initial supply.