Circulating Supply and Token Unlocks: What the Numbers Hide

A token listing shows a price, a market capitalisation and a supply figure, laid out with the same confidence as a stock quote. Two of those three are measurements. The third is a number the project supplied.

That distinction sits underneath every comparison built on it, and almost nothing written about supply metrics mentions it. Most explanations move straight from defining circulating supply to warning about dilution, which skips the question of where the figure came from in the first place.

What follows works in the other order: what the three supply numbers count, who produces them, and only then what an unlock schedule does and does not tell you.

The Three Supply Numbers and What Each One Counts

Three figures describe the quantity of a token, and they are routinely used as if they were interchangeable. They answer different questions.

Circulating supply is the portion treated as available to trade. Total supply counts what has been created and still exists. Max supply is the ceiling the design allows, where a ceiling exists at all.

The distance between circulating and total is the part that matters for what happens next. It represents tokens that exist but are held back, and those tokens arrive on a schedule rather than all at once. A protocol can lock supply without any vesting schedule at all: ETH locked in validators sits outside circulation until a withdrawal process the holder does not fully control releases it.

Not every token has a max supply. Where the design allows indefinite issuance there is no ceiling to quote, and a source displaying one anyway is showing something other than a hard limit.

Total supply also moves downward in one direction that circulating supply does not. Tokens sent to an address from which they cannot be retrieved are treated as removed, so a total supply figure read today is not necessarily the quantity that was originally issued.

That is why a rising circulating supply and a falling total supply can appear together without contradiction. One is tracking what has been released, the other what still exists, and a schedule can be doing both at once.

Where the Circulating Supply Figure Actually Comes From

This is the part that changes how the other numbers should be read, and it is absent from most explanations of them.

Circulating supply is not read directly off the chain the way a wallet balance is. CoinGecko sets out its own process in its published methodology, and that process starts with the project.

The methodology states that circulating supply is obtained from token teams and verified internally by CoinGecko. For proof-of-work coins the figure is queried from block explorer interfaces. For smart-contract tokens it is calculated by deducting locked tokens from total supply.

The locked addresses used in that deduction are themselves obtained from the token teams, covering holdings such as a foundation fund and locked team and investor allocations. Balances at those addresses are then read automatically from block explorers where that is possible.

So the arithmetic is verifiable but the inputs are declared. If a team does not disclose an address holding a locked allocation, the tokens at that address are not deducted, and the published circulating supply is larger than the definition intends.

None of this makes the figure unusable. It makes it a figure with a provenance, and provenance is something a reader can check rather than assume.

What an Unverified or Dashed Supply Figure Tells You

There is a concrete signal for exactly this problem, and it is visible on the page rather than buried in documentation.

CoinGecko states that where circulating supply cannot be verified for accuracy, it is marked with a dash instead of a number. The absence is deliberate and it is information.

A dash means the provider was not willing to publish a figure it could not stand behind. Anything computed downstream of that figure, market capitalisation included, is then missing its denominator.

The same methodology notes that where listed information is found to be inaccurate, the provider reserves the right to unpublish the asset. That is a disclosure standard applying to the project, not a judgement about whether the token is worth holding.

Why Market Cap Inherits Every Assumption Above

Market capitalisation looks like an independent measure of size. It is not. It is a product, and one of its two factors is the number described in the previous two sections.

CoinGecko defines it as the current price in USD multiplied by the circulating supply of the asset, and the global figure as the sum of that calculation across every project tracked.

Price is observed from trading. Circulating supply is assembled from disclosures. The product carries both properties, and the ranking tables built from it carry them too.

This is why two reputable sites can show different market capitalisations for one token on the same day without either being wrong. Any difference in which addresses are counted as locked, or in how recently a team updated a disclosure, passes straight through to the result.

The effect is easiest to see by holding price constant. Two sites quoting the same price but differing on which addresses are locked will publish different market capitalisations, and the entire gap comes from the supply term rather than from any disagreement about what the token trades at.

The practical habit is small: when a market cap matters to a decision, check the supply figure it was built on and the date that figure was last updated, on the specific site being read.

Fully Diluted Valuation and the Denominator Problem

Fully diluted valuation applies the current price to a larger supply than the circulating one, describing what the asset would be worth if that entire supply were trading at today’s price.

It is a useful hypothetical because it puts the locked portion on the same scale as the traded portion. It is also the figure most often quoted without saying what went into it.

The denominator is not standardised. Some sources apply total supply and others apply max supply, and for a token where those differ the two calculations produce materially different valuations.

A fully diluted valuation is therefore only comparable across sources when both used the same base. Comparing one site’s figure with another’s is a comparison of two methods as much as of two tokens.

The ratio between fully diluted valuation and market cap is what most readers are reaching for. A wide gap means most of the supply is not yet trading, which is a statement about future float and not a prediction about price.

Vesting, Cliffs and the Unlock Calendar

The locked portion does not stay locked. It is released on a schedule fixed when the allocations were made, and that schedule is usually public.

Vesting is the arrangement under which an allocation becomes available over time rather than immediately. A cliff is an initial period during which nothing is released at all.

After a cliff ends, the arrangement typically switches to steady release across a defined term. The two structures combine, which is why an allocation can sit untouched for months and then begin arriving in regular increments.

The shape matters more than the total. A cliff concentrates a large release into a single date, while steady vesting spreads the same quantity across many small ones, and the tradeable supply reaches the same place by very different paths.

Who receives the tokens matters as well. An allocation released to an early investor, a team member, a foundation treasury or an incentive programme carries different intentions, and the schedule alone does not distinguish them.

The schedule itself is normally set out in the project’s own documentation, which is where it should be read rather than from a tracker that has summarised it. A summary can be out of date, and the allocation categories it collapses are exactly the detail that decides who is able to sell.

What an Unlock Schedule Cannot Tell You

An unlock changes permission, not behaviour. It marks the date on which a holder becomes able to sell, and says nothing about whether they will.

A recipient may sell immediately, hold, stake, or move the allocation without it reaching an exchange at all. The schedule constrains the first of those and none of the rest.

A scheduled unlock is also public in advance. Anyone who wants the information has it, which means an unlock is not the kind of surprise that a private event would be.

Nor does the calendar reveal how much of the released supply is actually reachable at any price a seller would accept. That depends on market depth on the day, which is a separate question from how many tokens became transferable, and one that a forced liquidation answers very differently from a voluntary sale.

What the schedule does support is narrower and still worth having: on this date the tradeable supply increases by this amount, and these holders become able to act.

Who This Page Is Not For

It is not for anyone looking for a threshold at which a supply ratio becomes dangerous. No such figure is offered here, because none of the readable sources traces one to anything verifiable.

It is not a valuation method. Supply metrics describe quantity and provenance, and say nothing about whether an asset is worth its price.

It does not cover the mechanics of leveraged crypto positions, which have their own funding and margin arrangements set out under perpetual futures funding, nor the broader risks of holding a crypto asset, nor the question of choosing a crypto platform.

What it is for is reading a supply figure with its provenance attached: what it counts, who produced it, and what the numbers calculated from it can carry.

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