Reading Tokenomics: The Four Numbers That Matter

Every token has a tokenomics page or docs section. Almost nobody reads them before buying. Then they wonder why the token 'dumped for no reason' the day of the big unlock. Here is what to actually check.

The four numbers

1. Total supply

How many tokens will ever exist. Bitcoin: 21 million (fixed). Ethereum: no cap (deflationary through fee burn). Most new tokens: 100M to 10B, arbitrary.

2. Circulating supply

How many are unlocked and trading right now. This is what determines the current market cap you see on CoinGecko.

3. FDV to market cap ratio

Fully diluted valuation = total supply × current price. If FDV is 10x market cap, 90% of the tokens are yet to be released. Every future unlock is dilution.

A token with $100M market cap and $1B FDV is really valued at $1B once everything unlocks. If nothing changes fundamentally, the price should trend toward $100M / total supply, not $100M / circulating supply.

4. Unlock schedule

This is where fortunes are made or destroyed. Look for:

Cliffs — Large chunks unlock on a single day (team, VCs)
Linear vesting — Gradual release over months or years (fairer)
Emission schedule — How rewards to LPs, stakers, users decay over time

Red flags that predict dumps

Warning signs to check before buying

Signal	What it means
Team + VC = 50%+ of supply	They will exit through your bid
Big cliff unlock in 3-6 months	Your gains are their exit liquidity
Low float, high FDV	Manipulated pump, dumps at every unlock
No fee capture or utility	Governance meme, value goes to zero over time
3 wallets hold 60% of circulating supply	One dump ends the party

Where to find real data

Token vesting sheet — On the project's docs site. Should show unlock schedule for every allocation category.
CoinGecko / CoinMarketCap — Circulating, FDV, historical price chart
TokenUnlocks.app — Aggregated view of upcoming unlocks across major tokens
Etherscan holders tab — Actual on-chain holder distribution

How to interpret an unlock cliff

Say a token has a $500M market cap, 10% of supply circulating, and a 15% cliff unlock next month. That unlock will nearly triple circulating supply overnight. If demand does not triple simultaneously (it never does), price gets cut in half at best.

Rule of thumb: exit ahead of large unlocks. Or wait until the unlock is past and price has stabilized. Buying in the two weeks before a cliff is the most reliable way to lose money in crypto.

The rule

Read the vesting sheet. Calculate FDV. Check who holds what. Everyone who ignores this thinks they are buying at $100M market cap. They are actually buying at $2B fully diluted. Six months later they learn the difference.