Market cap vs FDV: how burned tokens affect the calculation
Market cap and fully diluted valuation multiply a token price by different supply measures. A “29% burned” label alone cannot tell you whether they should differ: you need the burn mechanism, the supply denominator and the definition used for FDV. Here is how to check the calculation without counting the same burn twice.
Start with the supply definition, not the label
Market cap = price per token × circulating supply. FDV = price per token × the supply assumed for full dilution. Providers may use total supply or maximum supply for that second measure. CoinGecko explicitly describes this distinction; check the methodology before comparing values from two sites.
Total supply, circulating supply and a future maximum are not interchangeable. A data source may know how many tokens exist onchain but lack reliable information about circulation. A number derived from total supply should not silently be presented as independently verified circulating market cap.
A worked example with 29% burned
Use hypothetical inputs: 1 billion tokens originally issued, 290 million removed from usable supply, and a current price of $0.50. Assume all remaining 710 million tokens circulate and no other exclusions apply. Market cap is 710 million × $0.50 = $355 million.
If the displayed valuation still multiplies price by the original billion, it is $500 million. That is an original-issuance valuation, not automatically the correct current FDV. Under a current-total-supply convention, where the burn has reduced total supply to 710 million, FDV is also $355 million. A maximum-supply convention requires checking whether additional issuance is still possible.
The lesson is not that market cap must always differ from FDV after a burn. Equality can be correct when their supply bases coincide. It can also be a bad fallback when circulating supply is unknown. These numbers illustrate the distinction; they are not a statement about the current supply or price of PONS or any other listed token.
Do not subtract a contract burn twice
In OpenZeppelin’s ERC-20 implementation, a burn reduces totalSupply. An ordinary transfer to a destination address does not have that same effect. A project may describe either an actual supply-reducing burn or a transfer to an address considered inaccessible as “burned”; inspect the contract behavior instead of relying on the badge.
Return to the example: if totalSupply already reads 710 million after the 290 million burn, subtracting 290 million again leaves 420 million and produces an incorrect $210 million valuation at $0.50. That is double subtraction. Read the supply and the relevant balances at the same block when investigating a discrepancy.
If totalSupply still includes a balance believed to be inaccessible, excluding it requires a justified rule and evidence about that address. A wallet being inactive, labelled by someone else or owned by the team does not establish an irreversible burn. Do not guess a burn amount from the token name or a social post.
Locked tokens and burned tokens are different
An unlock schedule describes tokens that may become available later. A burn is a different event. In another illustrative case, suppose the remaining 710 million tokens include 100 million that the chosen circulation methodology excludes while locked. Circulating supply becomes 610 million, giving a $305 million market cap at $0.50; total-supply-based FDV remains $355 million.
The exclusion needs evidence about the actual asset and lock. Burning a liquidity-position token or locking a position NFT is not the same as burning the underlying traded token. Never subtract a pool-position percentage from the token’s supply just because both are displayed as percentages.
Check units before changing the supply calculation
A supply read from an ERC-20 contract is an integer in base units. Apply the token’s decimals once to obtain token units. Then multiply by a price for one of those tokens, not a quote for a base unit, the opposite side of the pair or a different asset.
If two pages disagree, divide each displayed valuation by its price. For example, $500 million / $0.50 implies 1 billion tokens; $355 million / $0.50 implies 710 million. This reverse calculation identifies the supply assumption to investigate. It does not prove that either price or supply is correct, so keep the contract and observation time alongside the result.
Market cap is not cash available to sellers
A valuation multiplies one reference price across a supply. It is not the amount deposited by holders or the amount all holders could collectively withdraw at that price. The pool’s executable depth is a separate question.
On chart.zone, compare the Price view with MCap, then inspect the selected pool and any supply information before interpreting a large number. If a supply figure cannot be substantiated, the next step is to resolve its source, not invent a circulating figure. For a useful bug report, include the network, contract, price, implied supply, block or timestamp, and evidence for the claimed burn.