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What Is the Rationale for Using Fully Diluted Valuation (FDV) over Market Cap in Comps?

FDV accounts for future dilution and total potential size, providing a fairer, long-term comparison than the often-misleading Market Cap.
Greeks.Live17.11.25

What Is the Rationale for Using Fully Diluted Valuation (FDV) over Market Cap in Comps?

The rationale for using FDV over Market Cap (MC) in Comps is to ensure a fair, long-term comparison of projects by accounting for future token supply dilution. MC only reflects the current circulating supply, which can be artificially low for new projects with large unvested allocations.

FDV provides a more honest comparison of the total potential valuation, allowing investors to assess the dilution risk and compare projects on an equal footing regarding their ultimate size.

What Is the Relationship between Circulating Supply and Fully Diluted Valuation (FDV)?
How Does the Release of Vested Tokens Affect the Fully Diluted Valuation (FDV)?
What Is the Significance of the “Fully Diluted” MC/TVL Ratio?
Why Is the Market Capitalization of a Token Often a Misleading Metric for Valuation?

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