Token Dilution: The Silent Portfolio Killer
You buy a token at $1. The market cap is $10M. Looks cheap? Wait. What is the Fully Diluted Valuation (FDV)?
The Unlock Cliff
Many projects lock tokens for early investors and the team. When these tokens unlock (vest), supply increases.
- If demand stays the same, Price Drops.
FDV vs. Market Cap
- Market Cap: Value of tokens currently trading.
- FDV: Value if ALL tokens were unlocked.
If Market Cap is $10M but FDV is $1B, you are at risk of massive dilution.
Check the impact of future unlocks with the Token Dilution Calculator.