Tokenomics in Practice: How Supply, Unlocks and Emissions Move Price
A token can have a great product and still bleed if its supply schedule overwhelms demand. Reading tokenomics is how you avoid buying a chart that's structurally fighting gravity.
Market cap values only the circulating supply. Fully diluted valuation (FDV) values the entire eventual supply. When FDV is many multiples of market cap, a large share of tokens is still locked and will enter circulation later. A token "cheap" by market cap can be expensive by FDV — and that gap is future sell pressure.
Key takeaways: Low float + high FDV often means heavy future sell pressure. Vesting unlocks add supply on a known schedule — size relative to float is what matters. Emissions can quietly dilute holders faster than demand grows. Always compare market cap to fully diluted valuation.
Frequently Asked Questions
What is the difference between market cap and FDV?
Market cap values only circulating tokens; FDV values the entire future supply. A large gap means lots of tokens are still locked and represent future sell pressure.
Why do token unlocks affect price?
Unlocks release previously locked tokens to insiders with low cost bases, adding sell-side supply. The size relative to circulating supply determines the impact.
Are high-APY tokens risky?
Often, yes. High yields are frequently funded by emitting new tokens, which dilutes holders faster than demand grows.