This initiative comes in response to growing concerns regarding the implications of low float and high fully diluted valuation (FDV) in recent token launches.
CoinMarketCap (CMC) will add two new metrics to provide users with deeper insights into the maximum potential selling pressure surrounding a given cryptoasset.
This initiative comes in response to growing concerns regarding the implications of low float and high fully diluted valuation (FDV) in recent token launches.
The new metrics, which will complement existing ones, are:
- (NEW) Unlocked Circulating Supply (UCS) = Max Supply - Unminted Supply - Burnt Supply - Locked Supply. This is derived from Token Release Schedules (TRS)
- (NEW) Unlocked Market Capitalization (UMC) = Price x UCS
The UCS and UMC provide a clearer picture of unlocked tokens, helping users understand how much supply can be potentially sold on the market at any given time.
As highlighted by Rush (CoinMarketCap CEO), “In recent months, we have observed a trend of tokens launching at high valuations with low initial float. This can lead to selling pressure once locked tokens are released into the market. The introduction of UCS and UMC is part of our commitment to fostering a transparent and healthy trading environment for all participants. ”
Cryptoassets with Token Release Schedules (TRS) will be used to derive UCS and UMC for the initial rollout in Q1 2025.
User Empowerment
The launch of these metrics comes amid the discourse surrounding low-float and high FDV tokens, which can create a volatile trading environment. By providing these new tools, CMC aims to equip users with the knowledge to navigate the maximum potential selling pressure associated with token unlock events and their impact on market prices.
“By offering these additional insights to complement existing metrics, we hope to empower our users to make informed decisions from TRS-derived data. These are not meant to be used in isolation. We still encourage users to perform holistic analyses using block explorers to ensure that TRS-derived data comport with the on-chain reality,” said Rush (CoinMarketCap CEO).
