Plain English
Token supply has three flavors: (1) Circulating supply — tokens currently liquid and tradable. (2) Total supply — circulating plus locked, vested, or staked tokens. (3) Max supply — the absolute cap, if any. Bitcoin has a max of 21 million. Ethereum has no hard max but burns offset issuance.
How it actually works
Market cap = price × circulating supply. Fully diluted valuation (FDV) = price × max (or total) supply. A token at $1 with 100M circulating and 1B max has a $100M market cap but a $1B FDV — and as the locked supply unlocks over time, the additional 900M tokens become sell pressure if demand does not grow proportionally.
What it means for you
FDV/market cap divergence is one of the biggest predictors of future underperformance. Tokens with massive locked supplies (team, VC, foundation) face years of headwinds as unlocks hit. Before buying, check the vesting schedule — projects like Token Unlocks publish these. A 4x ratio of FDV to market cap is a meaningful warning sign.
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Educational content only. Not investment, tax, or legal advice.