How circulating supply works
Circulating supply is the number of coins currently available and trading in the market, excluding tokens that are locked, reserved, or not yet released. It is the figure used to calculate market cap, because only coins that can actually be bought and sold count toward a project’s tradeable value. It can grow over time as locked tokens vest and new coins are issued.
Worked example
A token has a circulating supply of 100 million coins at $2 each, a market cap of $200 million. But its max supply is 1 billion, meaning 900 million are still locked or unissued. As those tokens unlock over the coming years, the circulating supply grows, and unless demand grows just as fast, that new supply weighs on the price. Today’s small circulating cap can hide a flood of future supply.
Why circulating supply matters
Comparing circulating supply to max supply tells you how much future dilution is coming. A coin with most of its supply already circulating faces little unlock pressure; one with a small fraction circulating may face years of selling as tokens vest. On Volity, checking this ratio before sizing a position is part of reading a coin’s tokenomics honestly.
Why it matters
Circulating supply is the denominator under market cap and the key to spotting hidden future dilution, so judging a coin without it can make a heavily-locked token look far cheaper than it is. Read it next to max supply. Related: max supply and market cap.
Learn more in our crypto trading guide.
