Definition
Circulating supply is the total amount of a cryptocurrency that is currently in the hands of the public and able to move freely between wallets and exchanges. It excludes tokens that are locked, reserved, or otherwise not available for trading, such as team-locked allocations or certain vesting contracts. This concept is often used together with market cap, where market cap is calculated by multiplying the circulating supply by the current token price. In tokenomics, circulating supply helps indicate how much of a token is actually influencing the market at any given moment.
Circulating supply can change over time as new tokens are created through mechanisms like mint or removed through mechanisms like burn. It is different from the maximum or fully diluted amount of tokens that could ever exist, which is sometimes reflected in FDV calculations. Because it focuses only on tokens that are currently active in the market, circulating supply is a key reference point for understanding how scarce or abundant a token is right now. It provides a snapshot of the live supply dynamics that affect pricing and liquidity.
Context and Usage
In practice, circulating supply is a core metric used across DeFi platforms, data dashboards, and analytics tools to describe the live state of a token’s availability. It sits at the center of tokenomics discussions, since decisions about locking, releasing, mint, or burn events directly affect how much supply is circulating. When combined with market cap, circulating supply helps frame a token’s current valuation relative to how many units are actually in the market. When compared with figures used for FDV, it can also highlight the difference between today’s active supply and the total supply that may become available in the future.