How it works
Each project tracks circulating supply by adding up wallet balances that are not subject to lock-up, vesting, or burn. The number changes as new tokens are mined or unlocked, and as project treasuries move tokens onto or off chain. Coingecko and CoinMarketCap publish reconciled circulating-supply figures that most exchanges follow.
Example
Bitcoin has about 19.8 million coins in circulating supply out of a 21 million max supply. The remaining 1.2 million will be mined over the next 116 years through the halving schedule. A new project might launch with 200 million tokens circulating and 800 million locked for team, investors, and ecosystem grants on multi-year vests. Each unlock event adds sell pressure as those tokens enter circulation.
Why it matters
Circulating supply is the denominator of market cap and the variable that future-supply unlocks change. A project trading at $1.00 with 100 million tokens circulating has a $100 million market cap. If 50 million more tokens unlock next month, all else equal the price faces a 33 percent dilution. Read the vesting schedule before sizing any position; it is the single most overlooked risk in early-stage tokens.
