Circulating Supply

Circulating supply refers to the number of cryptocurrency tokens or coins that are currently available to the public and actively circulating in the market. It includes all tokens that can be traded, staked, or transferred — excluding those that are locked, reserved, or burned. This is the most commonly used supply metric when calculating market capitalization and evaluating a token’s liquidity and availability.

Circulating supply sits alongside total supply and max supply in describing the overall token distribution of a project. It offers the most realistic picture of how many tokens are in active use or accessible to market participants.

How Circulating Supply Works

1. Token Issuance – As tokens are minted or unlocked through vesting, they may enter the circulating supply.
2. Exclusion of Locked Tokens – Tokens held by the team, in vesting contracts, or reserves are excluded.
3. Burn Adjustments – Burned or destroyed tokens are permanently removed from circulation.
4. Dynamic Updates – Circulating supply changes over time as tokens are released or removed.
5. Explorer Visibility – Platforms like CoinMarketCap or CoinGecko track and publish updated figures.

Key Features

• Market-Relevant Metric – Reflects tokens that are actively available for trading or use.
• Excludes Non-Liquid Holdings – Locked, unvested, or burned tokens are not counted.
• Used in Market Cap Calculations – Core metric for assessing project valuation (price × circulating supply).
• Real-Time Adjustments – Often updated automatically based on blockchain data.
• Transparency Signal – Helps users understand how much supply is in the hands of the public.

Benefits of Circulating Supply

• Accurate Valuation – More realistic than total or max supply when calculating current market cap.
• Investor Insight – Helps gauge the availability and distribution of a token.
• Price Dynamics – Affects supply/demand relationships and token liquidity.
• Risk Evaluation – Lower circulating supply can signal high inflation risk if many tokens remain locked.
• Project Transparency – Encourages teams to communicate clearly about vesting and supply management.

Use Cases of Circulating Supply

1. Market Capitalization – Token price × circulating supply determines a token’s live market value.
2. Exchange Listings – Exchanges often use circulating supply to assess liquidity and risk.
3. Vesting Schedules – Investors monitor this metric to track upcoming unlocks and dilution risks.
4. DeFi Yield Strategies – Projects use circulating supply to model staking rewards and emissions.
5. Token Launch Analysis – Early-stage projects may highlight circulating supply to explain launch valuation.
6. Community Transparency – A visible, up-to-date circulating supply fosters trust and reduces uncertainty.