What is the meaning of fully diluted in the context of cryptocurrencies?

3 answers

• Dec 15, 2021 · 3 years ago
  Fully diluted refers to the maximum potential supply of a cryptocurrency, taking into account all possible tokens that could be in circulation. It includes not only the currently circulating supply but also any tokens that may be issued in the future through mining, staking, or other mechanisms. This concept is important because it gives investors an idea of the maximum possible dilution of their holdings and can impact the perceived value of a cryptocurrency. The higher the fully diluted market cap, the more potential dilution there is, which can affect the price and market sentiment.
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• Dec 15, 2021 · 3 years ago
  Imagine you have a pizza and you cut it into 8 slices. Each slice represents a portion of the total supply of a cryptocurrency. Now, fully diluted means considering all the slices that could potentially exist, even if they haven't been cut yet. It's like saying, 'If we cut the pizza into 16 slices instead of 8, how much would each slice be worth?' This concept helps us understand the potential future supply of a cryptocurrency and how it can impact its value.
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• Dec 15, 2021 · 3 years ago
  In the context of cryptocurrencies, fully diluted refers to the total supply of a cryptocurrency, including both the circulating supply and any potential future supply. It takes into account factors like mining rewards, token issuance, and inflation. Understanding the fully diluted market cap can give investors a better understanding of the potential future supply and the impact it may have on the value of a cryptocurrency. It's important to note that fully diluted market cap is not the same as the current market cap, which only considers the circulating supply.
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