Fully Diluted Valuation (FDV) is calculated by multiplying the max supply (or total supply if no max exists) by the current token price. It represents the theoretical total value of a project if every token that will ever exist were trading at today's price.
FDV is a critical metric for evaluating whether a token is overvalued relative to its current market cap. A large gap between market cap and FDV indicates that a significant number of tokens have yet to enter circulation, which could create dilution and downward price pressure over time.
Investors use the market cap to FDV ratio to assess unlock risk. A ratio close to 1 means most tokens are already circulating, while a low ratio suggests heavy future dilution from upcoming unlocks and emissions.