What Is Fully Diluted Valuation (FDV) and Why Is It Used in Comps?
Fully Diluted Valuation (FDV) is the market capitalization calculated using the total supply of a token that will ever exist, including all unreleased tokens from vesting, staking rewards, and treasury allocations, multiplied by the current price. It is used in Comps to provide a true picture of the project's potential long-term valuation, mitigating the distortion caused by a low initial circulating supply.
Comparing FDV helps investors assess the potential dilution risk when comparing projects.
Glossar
Potential Dilution Risk
Dilution ⎊ This represents the reduction in the proportional ownership stake of existing token holders resulting from the issuance of new tokens into the circulating supply.
Market Capitalization
Valuation ⎊ This metric represents the total notional value of all circulating units of a cryptocurrency, calculated by multiplying the current spot price by the total supply outstanding, serving as the primary measure of an asset's overall economic scale within the market.
FDV
Valuation ⎊ Fully Diluted Valuation (FDV) represents the theoretical market capitalization of a cryptocurrency project if all tokens were currently in circulation.
Fully Diluted Valuation (FDV)
Valuation ⎊ Fully Diluted Valuation (FDV) represents the theoretical market capitalization of a cryptocurrency if all future tokens were currently in circulation.