Float Adjusted Capitalization

Float adjusted capitalization is a refinement of market capitalization weighting that only accounts for the shares or tokens that are freely available for public trading. It excludes restricted holdings, such as those held by project founders, early investors, or locked protocol treasuries, which are not accessible to the general market.

By focusing on the float, this methodology provides a more accurate picture of an asset's true market influence and prevents the distortion caused by large, illiquid holdings. This is a standard practice in traditional equity markets and is increasingly adopted in cryptocurrency to improve index accuracy.

It helps ensure that derivative products based on these indices are not overly influenced by assets that have low actual market availability. It creates a more realistic benchmark for market performance.