Fully Diluted Valuation (FDV)
Basics
- From Coinsutra (27-3-2021):
"FDV can simply be defined as the Market Cap of the project once the maximum number of tokens have been issued by the development team. In other words, it is a method of computing the future market cap of a project."
"FDV is the price multiplied by the total amount of coins/tokens that will ever exist (for that asset). The market cap is always smaller than or equal to the FDV.
The FDV is larger because the term “market cap” counts only tokens that can be bought or sold currently, which omits certain locked tokens that are pending vesting or unlocks. These locked tokens are usually from a bunch of different categories – they can be team tokens and investor tokens and therefore relevant in the next few weeks to years, or they could be tokens in a mining schedule that will be emitted over the next 100 years.
Where market cap is a measure of public $ buying demand, FDV is not a measure of demand at all. Instead, it is a measure of supply. This is why the fully-diluted valuations get confusing. As demand increases for unlocked coins and the market cap increases, the FDV increases proportionally, even though demand for these locked coins does not necessarily increase. As a result, the FDV increases 1:1 with market cap even if those locked coins could perhaps have happy sellers at much lower prices."
