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CRYPTO GLOSSARY

FDV (Fully Diluted Valuation): The Ultimate VC Trap

FDV is the total market cap a cryptocurrency would have if all its tokens were in circulation. Ignoring FDV is the fastest way to get dumped on by insiders.

Fully Diluted Valuation (FDV)

Fully Diluted Valuation (FDV) is the total theoretical market capitalization of a cryptocurrency if its entire maximum supply were currently in circulation.

You calculate it by multiplying the current price of one token by the absolute maximum number of tokens that will ever exist.

Market Cap vs FDV: The Retail Trap

When rookie traders look at DexScreener or CoinGecko, they look at the Market Cap. Market Cap only measures the tokens that are currently unlocked and trading right now (Circulating Supply).

The Low Float / High FDV Scam: Venture Capitalists (VCs) and Cabals love to launch tokens with a “Low Float”. They might create 1 Billion tokens, but only release 10 Million (1%) to the public on launch day.

  • Because supply is so scarce, retail traders easily pump the price to $10 per token.
  • The Market Cap looks reasonable: 10 Million tokens * $10 = $100 Million Market Cap.
  • But the FDV is astronomical: 1 Billion tokens * $10 = $10 Billion FDV.

The Unlock Dump

Retail traders buy the token thinking it’s a “cheap $100M coin.” What they don’t realize is that the VCs and developers hold the other 990 Million tokens, which are scheduled to “unlock” over the next year.

When those tokens unlock, they flood the market. Even if the demand stays exactly the same, the massive influx of new supply will mathematically crush the price. The VCs dump their newly unlocked tokens at $2, making billions, while the retail trader who bought at $10 loses 80% of their net worth.

Always check the FDV on DexScreener. If the FDV is 10x higher than the Market Cap, you are buying a ticking time bomb.

Related Terms

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