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How are fully diluted shares calculated for digital currencies?

avatarGrimes SchultzDec 25, 2021 · 3 years ago3 answers

Can you explain the process of calculating fully diluted shares for digital currencies? I'm interested in understanding how this calculation is done and what factors are taken into account.

How are fully diluted shares calculated for digital currencies?

3 answers

  • avatarDec 25, 2021 · 3 years ago
    Calculating fully diluted shares for digital currencies involves considering the total supply of coins or tokens and any potential future supply that could be added. To calculate this, you would take the current circulating supply and add any additional supply that could be released in the future, such as from mining rewards or token vesting schedules. This calculation helps investors and analysts understand the potential future dilution of a digital currency's market cap and ownership distribution.
  • avatarDec 25, 2021 · 3 years ago
    When calculating fully diluted shares for digital currencies, it's important to take into account any locked or vested tokens that may become available in the future. This can include tokens held by the project team, advisors, or early investors. By including these potential future supply additions, the calculation provides a more accurate representation of the total supply and potential dilution of a digital currency.
  • avatarDec 25, 2021 · 3 years ago
    Fully diluted shares for digital currencies can be calculated by taking the current circulating supply and adding any potential future supply that could be released. This calculation helps investors understand the potential impact of future supply additions on the market cap and ownership distribution. For example, if a digital currency has a large amount of tokens locked up in contracts or held by the project team, the fully diluted shares calculation would include these tokens to provide a more comprehensive view of the currency's potential dilution.