Circulating vs Max Supply

Definition

Circulating supply is tradable today; max supply is the eventual ceiling. The gap (and the schedule that closes it) drives unlock and emission risk, which is why researchers rarely look at either number in isolation.

The dilution gap is a story about path, not just size. A large gap closing slowly through aligned vesting differs from a large gap closing through near-term cliffs into thin liquidity.

FDV uses fully diluted assumptions that often lean on max supply. If the gap is huge, your research question becomes demand growth versus supply release — with names attached to who receives tokens.

When max is soft or absent, reframe the comparison as circulating versus expected future issuance over your horizon. Fake precision around a missing ceiling helps no one. Redemption path and freeze powers belong next to peg slogans.

Why researchers care

• Large gaps with near-term unlocks raise overhang risk.
• FDV uses max (or fully diluted) assumptions — check the calendar.
• Always ask who receives the newly circulating tokens.
• Path and recipient incentives matter more than the raw percentage gap.

How to use it in research

• Circulating 10% of max with investor cliffs inside 90 days — prioritize unlock mapping.
• Circulating 70% of max with low emissions — shift focus to fee capture and competition.
• No hard max — replace the gap chart with a 12-month issuance forecast.

Common mistakes

• Calling any large gap automatically bullish “upside to FDV.”
• Ignoring emissions that widen effective dilution beyond unlock tables.
• Comparing gaps across assets with different circulating definitions.