Unit 1 · Level 4 · Token design
The unlock iceberg
Market cap = price × the coins actually circulating today. FDV (fully diluted valuation) = price × ALL coins that will ever exist, locked ones included. Think iceberg: market cap is the tip you can see. FDV shows the frozen mass under the water, waiting to surface.
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What you get asked
A token trades at €0.50. It has 1 billion total supply, with 100 million circulating. What is its FDV, in millions of euros?
FDV = €0.50 × 1 billion total supply = €500 million. The market cap is only €0.50 × 100M = €50 million, a tenth of it.
Same token: €0.50 price, 100 million coins circulating. What is its market cap?
Market cap counts only circulating coins: 100M × €0.50 = €50M. The other €450M of FDV is still locked under the ice.
FDV prices a token as if the ___ supply were already trading today.
That's why a low price can be an illusion: a €50M market cap with a €500M FDV means 90% of the supply hasn't hit the market yet.
Put the FDV calculation in order
The gap between FDV and market cap is the iceberg's hidden mass: tokens that exist on paper and can eventually be sold.
Why should a market cap 10× smaller than FDV make you pause?
Buying at a tiny float means future unlocks are swimming toward you. Always ask what the price would be if everyone could sell. 🐜
The rest of this unit
Supply schedules, emissions, and the fine print that decides who gets paid.