The fully diluted ratios, and when they are the more honest ones
Fully diluted valuation counts tokens that do not exist yet, which makes it either the most misleading number on a page or the only realistic one.
Fully diluted valuation multiplies the current price by every token that will ever exist rather than by the tokens trading today. Ratios built on it are systematically larger than their market-cap equivalents, sometimes by an order of magnitude. Whether that makes them worse or better depends entirely on how much of the supply is still locked and how soon it arrives.
The construction is price × maximum or total supply, and the ratios follow the same pattern as their market-cap counterparts.
The assumption inside the number
Fully diluted valuation assumes every future token is worth what a token is worth today. That is a strong assumption and usually a false one, because the act of issuing them changes the supply and, in most plausible worlds, the price at which the marginal unit clears. It is best read not as a prediction of market value but as a statement of scale: this is what the network would be valued at if the current price survived full issuance.
The number also depends on which supply figure is used. Where a hard maximum supply exists, the calculation is well defined and the cap is enforced by rules every node validates. Where issuance is perpetual, as it is for most proof-of-stake networks with no cap, there is no maximum and the honest answer is that a fully diluted figure does not exist. Sites that publish one for such assets have quietly substituted total supply, which counts tokens minted so far including locked ones. That is a different measurement with a different meaning, and the substitution is rarely disclosed.
When market cap is the misleading one
A token launched with a small float is the clearest case. If a few percent of the eventual supply trades and the rest sits behind a multi-year unlock schedule, the market cap describes a thin slice of the asset while the fee stream in the denominator is generated by the whole system. Every ratio built on that market cap will look far smaller than the same ratio built on the diluted figure, and the difference carries no information about the network itself.
Three conditions push the fully diluted version toward being the more honest one:
- A large share of supply is unissued or locked, visible in the issued and pending percentages on the supply pages.
- The unlocks are contractual and dated rather than discretionary, so arrival is a matter of calendar rather than of governance.
- Locked holders have already been allocated their tokens, meaning the economic claim exists even though the transferable balance does not.
The last point is the one most often missed. An insider allocation under vesting is not a future decision that might not happen. It is an existing claim that has not yet become liquid, in the same way that a company's unexercised options are part of its diluted share count and appear in its filings for exactly that reason.
When the diluted version is the misleading one
The mirror case is a network with slow perpetual issuance and no cap. Applying a total-supply figure produces a number that treats years of future issuance as though it were outstanding today, which overstates near-term claims and obscures the fact that most of those units will be issued to validators in exchange for securing the network rather than sold into the market on a schedule.
It is also misleading when the cap is nominal. Some maximum supplies sit so far in the future that the final tokens have no realistic bearing on the present, and some are changeable by governance, which makes the cap a current policy rather than a constraint. A cap that a vote can raise is not the same object as one enforced by consensus rules that every operator would have to adopt.
Reading the two together
The ratio between them does most of the work. FDV to market cap states how many times larger the fully diluted figure is, which is a direct measure of how much of the asset is not yet trading. Alongside it, dilution overhang describes the share of supply scheduled to arrive over a defined forward window, which is the part that matters on any human timescale. A tenfold gap that closes over twenty years and a twofold gap that closes over six months are different situations, and only the second measure distinguishes them.
| Situation | Market-cap ratio | Diluted ratio | Better read |
|---|---|---|---|
| Nearly all supply issued, hard cap | Close to the diluted version | Close to the market-cap version | Either; the gap is small |
| Small float, dated cliffs ahead | Understates scale | States scale | Diluted, with the unlock calendar beside it |
| Perpetual issuance, no cap | Defined | Not well defined | Market cap, with the inflation rate beside it |
| Cap exists but is governance-changeable | Defined | Conditional on a policy | Both, with the policy stated |
Dilution is not the same as inflation
Two distinct things are routinely merged. Dilution from unlocks moves existing allocations from locked to liquid without creating new units; total supply does not change, only the tradable share does. Issuance under an emission schedule creates units that did not previously exist. The annual inflation rate captures the second, and real inflation nets out burns to show whether supply is growing or shrinking on balance.
A holder is affected by both, through different channels. Unlocks change who can transact and when, which is a liquidity and overhang question and shows up in market depth rather than in supply totals. Issuance changes each unit's share of a fixed network, which is pure arithmetic. Neither is captured by a market-cap ratio on its own, and neither is captured by a diluted ratio on its own either.
The supply pages carry the issued, pending and overhang series for each asset, and the calendar shows dated unlock events where a schedule has been published.