**What is FDV and why is it important for your investments** 📊
See a token's beautiful pump of +300% and thinking about jumping on the train? Hold up. First, check the FDV — Fully Diluted Valuation. This is the market cap of the project as if all tokens were already in circulation.
FDV = current price × total supply of tokens (including locked ones). Many projects launch with only 5-10% of tokens in circulation, while the other 90-95% are locked up with the team, investors, and in reward pools.
Practical example: the token is priced at $1, with 10 million tokens circulating (market cap $10 million), but the total supply is 1 billion tokens. FDV = $1 billion! When the locked tokens start to unlock, the supply will increase a hundredfold.
Red zone: FDV over $1 billion for a young project — that's super pricey. Green zone: FDV close to market cap — less inflationary pressure.
Check this data on CoinGecko or CoinMarketCap under the "Tokenomics" tab. A high FDV doesn't mean "don't buy," but you need to understand the risks.
Remember: a pretty pump can come to a sudden halt when the market realizes the project's true valuation. 📉
What's the maximum FDV you consider reasonable for projects at different stages — up to $100M, $500M, or are you willing to risk it with $1B+?
#FDV #Tokenomics #CryptoEducation #DYOR #BinanceSquare
See a token's beautiful pump of +300% and thinking about jumping on the train? Hold up. First, check the FDV — Fully Diluted Valuation. This is the market cap of the project as if all tokens were already in circulation.
FDV = current price × total supply of tokens (including locked ones). Many projects launch with only 5-10% of tokens in circulation, while the other 90-95% are locked up with the team, investors, and in reward pools.
Practical example: the token is priced at $1, with 10 million tokens circulating (market cap $10 million), but the total supply is 1 billion tokens. FDV = $1 billion! When the locked tokens start to unlock, the supply will increase a hundredfold.
Red zone: FDV over $1 billion for a young project — that's super pricey. Green zone: FDV close to market cap — less inflationary pressure.
Check this data on CoinGecko or CoinMarketCap under the "Tokenomics" tab. A high FDV doesn't mean "don't buy," but you need to understand the risks.
Remember: a pretty pump can come to a sudden halt when the market realizes the project's true valuation. 📉
What's the maximum FDV you consider reasonable for projects at different stages — up to $100M, $500M, or are you willing to risk it with $1B+?
#FDV #Tokenomics #CryptoEducation #DYOR #BinanceSquare