Market Cap vs FDV: Two Valuations Of One Token

Market cap is price multiplied by circulating supply. Fully diluted valuation is price multiplied by total supply. That is the entire difference, and it produces two numbers that can differ by ten times or more on the same token in the same second. The gap is not an error. It is the market being asked to price supply that has not arrived yet, and how you read it depends on knowing where the supply is.

The two formulas, stated plainly

Both multiplications use the same price. That is worth stating because it means the two figures never disagree about the market; they only disagree about how much of the token exists for pricing purposes. Everything else in this page follows from that single observation.

Total supply is the easier half. An SPL mint account stores supply as an integer in base units alongside a decimals field, so a mint showing 1,000,000,000,000,000 base units with six decimals holds one billion tokens. There is no ambiguity and no provider discretion. If two dashboards disagree on total supply, one of them is reading stale state or looking at a different mint.

Circulating supply is a judgement, not a field

There is no circulating supply field anywhere on chain. No program stores it, no account exposes it, and no standard defines it. What exists is a policy, applied by a data provider, that deducts certain balances from total supply because it judges them to be unavailable to the market.

Typical deductions include team and advisor allocations, tokens sitting in vesting or lockup programs, treasury or foundation holdings, and sometimes tokens sent to a burn address. Each deduction is a claim about the future behaviour of whoever controls that balance. Some claims are strong, such as a balance held by an on-chain vesting program with a published unlock schedule. Others are weak, such as an unlabelled wallet that a project has described in a blog post as a treasury.

This is why market cap, despite being the most prominently displayed figure on almost every token page, is the softest number in the supply family. It inherits a provider policy and then multiplies it by a price. FDV inherits only the price, which makes it the more reproducible of the two even though it describes a hypothetical.

What the gap between them actually measures

Express the relationship as a ratio and it becomes a schedule rather than two numbers. If market cap is one fifth of FDV, then four fifths of the supply that can exist is not currently counted as tradeable. That supply has to be somewhere, and it has to arrive somehow, and the arrival is what the ratio is warning you about.

The warning is not automatically bad news. A ratio well below one is normal for a token with a long, published vesting schedule and is exactly what you would expect from a project distributing supply over years. What matters is whether you can find the schedule, whether the unlocks are dated, and whether the mechanism holding the supply is a program or a promise.

A ratio at or very near one carries different information. It says every unit that can exist is already out, which removes dilution risk entirely and shifts the whole question onto liquidity and distribution. Most tokens launched through bonding-curve launchpads sit here, which is why the FDV conversation matters far less on those tokens than the liquidity conversation does.

Side by side: which question each answers

Worked example: pricing a dilution schedule

The example is deliberately mechanical. Real markets do not hold market cap constant, and demand can absorb new supply. The point is that the ratio between the two valuations converts directly into a pressure schedule, and reading only the headline market cap hides that schedule completely.

The bonding-curve case: supply that is fully out

Tokens launched through bonding-curve launchpads generally mint their entire supply at creation. There is no vesting contract, no team tranche held in a program, and no unlock calendar. Circulating supply and total supply are the same number, market cap equals FDV, and the ratio is exactly one.

That is genuinely useful information, and it is also frequently over-read. What it removes is scheduled dilution. What it does not remove is concentration: supply can be fully released and still sit in a small number of accounts, which is a distribution problem rather than a supply problem. It also says nothing about whether the market cap can be realised, since that depends on pool depth rather than on the cap table.

The practical consequence is that on curve-launched tokens the supply family of metrics stops being where the risk is, and the distribution and liquidity families take over. Top holder concentration becomes the number to work on, and it needs address classification before it means anything.

The price input both figures share

Both valuations multiply by a price, and that price is almost always the last trade or a very short volume-weighted average across indexed pools. On a deep pair this is a reasonable proxy. On a thin one it can be produced by a small transaction, which means a multi-million dollar valuation can rest on a trade worth a few hundred dollars.

This is the mechanism behind valuations that look impossible relative to the liquidity backing them. Nothing has been faked. A price is a price. But the multiplication treats it as though it applied to every unit of supply simultaneously, when in reality selling even one percent of supply into a shallow pool would move the price substantially. The ratio that quantifies this is covered in the liquidity to market cap ratio.

It also explains why the price input is the natural target for anyone trying to move a valuation. Since price is set by the marginal trade, and since Solana volume automation can place trades continuously across several pools, a reference price can be sustained by activity that costs far less than the valuation it supports. Recognising this is not an accusation about any particular token; it is a structural fact about how a last-trade price interacts with a supply multiplier.

Where each figure is quoted, and by whom

The two valuations are not used in the same places, and knowing which one an audience has in front of it explains a surprising number of arguments. Screeners and ranking tables almost always sort by market cap, because a ranking built on FDV would place heavily vested tokens above established ones and would look obviously wrong to a general audience.

Launchpad and early-stage interfaces often surface only one figure and label it simply as the cap. On tokens where supply is fully released the choice is immaterial, since the two are identical. On tokens with vesting the choice is load-bearing, and the interface rarely tells you which convention it applied. That is the situation in which two people can argue about a token's size for an hour while looking at the same screen and reading different quantities.

Social discussion tends to reach for whichever figure supports the point being made, which is not usually dishonest so much as unexamined. A small market cap makes a token sound early. A large FDV makes the same token sound established. Both statements can be published about the same asset on the same day without either being false, which is a good reason to state which figure you are using every time you use one.

The practical habit is to write both numbers down together with the ratio, in that order, whenever you record anything about a token's size. It costs one extra line, it removes the ambiguity permanently, and it makes your own notes comparable across tokens with completely different supply designs. Any note that records a single valuation figure is a note whose meaning depends on remembering which convention you were using at the time, and that memory does not survive a week.

Four common misreadings

• Treating FDV as a price target. FDV is what the supply would be worth at today's price, not a forecast. Quoting it as a destination inverts the arithmetic entirely.
• Comparing market cap across tokens with different supply policies. If one provider excludes a treasury and another does not, the two market caps are not comparable, and neither is the ranking built from them.
• Reading a burn as value creation. A burn reduces total supply and therefore FDV. Unless the burned balance was counted as circulating, market cap is unchanged. The token did not become more valuable; a category moved.
• Assuming a low ratio is always a warning. A token distributing supply over three years with public, program-enforced unlocks has a low ratio by design. The warning sign is an undisclosed schedule, not a low number.

Rebuilding both numbers from the mint

You can reconstruct both valuations in a few minutes, and doing it once for a token you care about is more instructive than reading a hundred dashboard summaries. The procedure below assumes only a block explorer.

1. Open the mint account. Record the supply integer and the decimals field. Divide supply by ten to the power of decimals to get total supply in whole tokens.
2. Record the authorities. Note whether mint authority and freeze authority are set or revoked. A live mint authority means total supply is a current reading, not a fixed quantity.
3. List the largest token accounts. Most explorers expose a holders view for a mint. Take the top twenty balances and their owner addresses.
4. Classify each one. Mark pool accounts, program vaults, known exchange addresses and burn addresses. What remains unclassified is the set you must make a judgement about.
5. Decide your own circulating supply. Deduct only what you can justify with an on-chain reason. Write the deductions down, because that list is the part a dashboard never shows you.
6. Take a price and multiply twice. Once by total supply for FDV, once by your circulating figure for market cap. Compare both against the dashboard.
7. Record the disagreement. If your market cap differs from the published one, the difference is entirely explained by classification. That difference is the most useful thing you learned.

The exercise usually produces one of two outcomes. Either your figure lands close to the published one, in which case the provider's policy is roughly what you would have chosen and you can use their number with more confidence. Or it does not, in which case you now know the headline valuation depends on a judgement you disagree with, which is exactly the kind of finding a token scorecard exists to record.

Questions the desk gets asked