Circulating Supply Metrics
Circulating Supply Metrics provide a real-time snapshot of the number of tokens that are publicly available and actively circulating in the market. Unlike total supply or max supply, which include locked, burned, or inaccessible tokens, the circulating supply is the primary denominator used to calculate market capitalization.
Accurate tracking of this metric is essential for assessing the liquidity of an asset and the potential impact of large sell orders on price. Changes in circulating supply, such as token unlocks from venture capital vesting schedules, can trigger significant volatility.
Market participants monitor these metrics closely to anticipate supply-side shocks and to ensure their valuation of the asset is based on the actual amount of tokens available for trading.