Understanding Supply Dynamics
Supply dynamics measure the relationship between circulating, total, and maximum supply — key to understanding dilution risk.
What are Supply Dynamics?
Supply dynamics analyze how much of a token's total supply is currently circulating. If only 30% of tokens are in circulation, the remaining 70% could be released over time, diluting existing holders.
Why It Matters
Bitcoin has ~93% of its max supply circulating — minimal dilution risk. A new DeFi token might have only 20% circulating with massive unlock schedules ahead. This directly impacts long-term price potential.
How We Use It
Supply Dynamics is weighted at 10% in our Value Score. Higher circulating-to-total ratios score better because they indicate less future dilution pressure.
> 90% circulating
Low Dilution Risk
< 30% circulating
High Dilution Risk