Circulating, total and fully diluted supply: why the three numbers disagree

Look up the same token on three sites and you may find three different supply figures, none of them wrong. They are measuring different things. Which one gets used decides the market capitalisation shown, and therefore the valuation the reader infers.

The three figures

Circulating supply counts units currently in public hands and available to trade. It excludes tokens that are locked, reserved, held by the issuing entity under commitment, or not yet created. It is the figure most commonly used to compute market capitalisation.

Total supply counts units that exist now, whether or not they can move. Locked and vesting tokens are included; tokens that have not been minted are not. Verifiably burned tokens are usually excluded.

Fully diluted supply counts every unit that will ever exist if the maximum is reached, including tokens not yet created. For a token with a fixed cap this is that cap. For one with no cap, the figure may be undefined, which is itself worth noticing.

Why the gaps exist

The distance between circulating and fully diluted supply is not noise. It is a schedule — a plan for issuing tokens over time to teams, investors, treasuries and incentive programmes.

A large gap means most of the eventual supply has not reached the market yet. Those tokens will arrive on a timetable that is usually published, and each arrival adds sellers without adding buyers. A small gap means most issuance has already happened and the schedule is largely behind rather than ahead.

Neither is inherently good or bad, but they describe very different situations, and a valuation quoted on circulating supply alone shows you only one of them.

What this does to market capitalisation

Market cap is supply multiplied by price, so the choice of supply figure scales the answer directly. An asset with a fifth of its eventual supply circulating has a fully diluted valuation five times its circulating market cap, for exactly the same price per unit.

Both numbers are true. The circulating figure describes what the market values today; the fully diluted figure describes what it would be worth at today’s price once every unit exists. Quoting one without the other is not dishonest, but reading one while thinking of the other produces a badly wrong picture.

Why unit price tells you almost nothing

This is where supply figures do their most useful work. A low price per unit is frequently read as an asset being “cheap” and having room to rise. Price per unit is simply market capitalisation divided by supply, so an asset with an enormous supply will have a low unit price at any valuation whatsoever.

Comparing two assets by unit price is comparing two numbers whose denominators differ by orders of magnitude. Our market cap what-if tool makes this concrete: it computes what a given valuation implies for unit price at the asset’s actual supply, and the results are usually a corrective.

What to check

For any asset where supply matters to your thinking, three things are worth establishing: which figure the site you are reading is using, what the gap is between circulating and fully diluted, and what the issuance schedule looks like over the period you care about.

All three are usually published. The first is often in a footnote, the second is arithmetic, and the third is in the project’s own documentation. A project that does not publish an issuance schedule has told you something about how much scrutiny it expects.

The honest caveat

Supply figures are self-reported more often than people assume, and definitions of “locked” vary. Tokens held by a foundation under a non-binding commitment are counted differently by different data providers. Treat the numbers as a well-informed convention rather than a measurement, and prefer sources that state which definition they used.

Reading an unlock schedule

The gap between circulating and fully diluted supply resolves over time according to a schedule, and that schedule usually has a shape worth reading rather than a steady drip.

Three features matter. The cliff is a date before which an allocation releases nothing and after which a large tranche unlocks at once. Vesting is the gradual release that typically follows. And the allocation tells you who receives each tranche: teams, early investors, a treasury, or ongoing incentive programmes.

Recipients behave differently, and that is the point of looking. An allocation vesting to an investor who bought at a fraction of the current price faces a different decision from a treasury funding development over years. Neither is sinister, but they are not interchangeable, and a schedule that concentrates several large cliffs in a short window describes a different supply environment from one that spreads issuance evenly.

Burns, buybacks and the other direction

Supply does not only increase. Some designs remove units permanently by sending them to an address nobody controls, sometimes automatically as a proportion of fees.

Two cautions apply. First, a burn reduces supply but says nothing on its own about demand, and a shrinking supply of something nobody wants is still worth nothing. Second, verify that burned tokens are actually excluded from the figures you are reading; the alternative is double-counting a reduction that has already been applied.

Buybacks are different again: units are purchased on the market and may be held rather than destroyed. Held tokens can return to circulation, which makes a buyback a weaker claim about supply than a verifiable burn.

Why the definitions are not standardised

There is no authority defining these terms, and data providers apply their own rules. The most common disagreement concerns tokens held by a foundation or treasury under a stated but non-binding commitment not to sell. Some providers exclude them from circulating supply on the basis of the commitment; others include them on the basis that nothing enforces it.

The result is that two sites can publish different circulating supplies for the same asset and both be applying a defensible rule. When a figure matters to your reasoning, check the provider’s stated methodology rather than assuming a shared definition — and prefer a source that publishes one at all.