Market Cap Vs FDV Ratio

The market cap versus fully diluted valuation ratio is a comparative metric that highlights the degree of potential supply dilution facing an asset. A low ratio suggests that a significant portion of the total token supply has yet to be released, implying high potential sell pressure in the future.

A high ratio indicates that most tokens are already in circulation, suggesting lower future dilution risk. This ratio is used by analysts to compare the supply dynamics of different projects and to identify assets that might be overvalued when future emissions are considered.

It is a powerful tool for discerning the true economic structure of a project beyond its current price.