Fully diluted market cap (FDMC) is the maximum supply of tokens multiplied by the token price.
It asks the question: What if all tokens were in circulation?
If a #fullydilutedmarketcap is much higher than the market cap, it means there are a lot of tokens locked up waiting to come on the market.
Example:
If the market cap is only 10% of the FDMC and assuming the tokens are all released in the next year, the project has to demonstrate 10x growth (1000% !) in a year just to MAINTAIN its current price.
This is an extreme case. Usually, 90% of the supply is not released that quickly. But you can use the comparison of FDMC and MC to guide you toward asking the pertinent next questions in your research.
Look at @0xPolygon and its $MATIC token.
Circulating supply = 8.7B tokens
MC = $8.3B
Total supply = 10B tokens
FDMC = $9.4B
The remaining 1.3B tokens will be vested over 3 years
This leads to ~5% yearly inflation rate.
5% YoY growth should be doable for Polygon = bullish!
If you want to go deeper and learn the #basicsoftokenomics quickly, in a structured format, consider taking our course.
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