Circulating Supply
The quantity of a cryptocurrency or token estimated to be actively available in public circulation.Definition
The quantity of a cryptocurrency or token estimated to be actively available in public circulation.Why it matters
Tokenomics describes how token supply, distribution, incentives, and utility influence a network economy.How it works
The figure is derived by taking the total supply of a token and subtracting tokens held in escrow, team vesting wallets, or DAO treasuries. Exchanges and data aggregators monitor blockchain addresses to filter out these non-circulating holdings. As vesting periods end or locked tokens are released, the circulating supply figure updates accordingly to reflect the new market reality.Real-world example
Bitcoin has a high circulating supply because the vast majority of its total potential supply has already been mined and is held by the public.Advantages
- Better metric for market cap
- Provides accurate market liquidity view
- Helps prevent valuation manipulation
Limitations
- Subject to estimation errors
- May exclude active staked tokens
- Vesting schedules cause figure fluctuations
Common misconceptions
- The circulating supply includes every token that will ever exist.
- Changes in circulating supply are always caused by team manipulation.
Related knowledge
- Token — term
- Total Supply — term
Canonical knowledge ID:
glossary:circulating-supply