BlockchainBeginner#Structure#Metrics
Market Cap
M
Definition
A price-and-supply snapshot: quoted token price multiplied by a stated supply figure. It is useful for scale comparisons only when the price, supply definition, time, and data source are disclosed; it is not a valuation or liquidity guarantee.
Source reviewed
- SEC Investor.gov: Market Capitalization opens in a new tab
Supports: Investor.gov defines market capitalization as current public market price multiplied by total outstanding shares, illustrating the price-times-quantity convention.
- Ethereum.org: ERC-20 token standard opens in a new tab
Supports: Ethereum's ERC-20 documentation explains that a token contract reports total supply, which is a technical quantity distinct from an external circulating-supply methodology.
Concept Diagram
Key Takeaways
1
Market cap is quoted price times a stated supply figure, with a source and timestamp.
2
Total supply, circulating supply, and fully diluted valuation answer different questions.
3
Cap-size labels do not prove liquidity, security, decentralization, quality, or future return.
4
Use the calculation to avoid unit bias, then verify the price and supply inputs separately.
Practical Example
A researcher records a token's quoted price, time, quote currency, and a source's stated circulating-supply methodology. They calculate the displayed market cap, then separately inspect the token contract's total supply, treasury balances, vesting and unlock terms, and trading depth. They do not call the result a valuation or assume it can be sold at the quoted price.
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Related Terms
Strategy
BTC DominanceBitcoin's stated share of an aggregation provider's total crypto market-cap denominator. It is a derived ratio, not a direct measure of capital flows, relative safety, an altcoin season, or future returns.
Blockchain
TVL (Total Value Locked)A provider-calculated USD value of assets included in a DeFi protocol or chain at a stated time. The figure depends on contract coverage, asset prices, inclusion rules, and treatment of composable or bridged assets; it is not liquidity, safety, adoption, or revenue by itself.
Strategy
Burn RateA measure of tokens removed from a supply under a specified protocol or issuer mechanism. A burn can change supply accounting, but it does not by itself determine value or price.
Strategy
TokenomicsA due-diligence framework for a token's disclosed supply, issuance, allocation, rights, controls, and use within a specific network or product.
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