Beyond Market Cap: ‘Unlocked Supply’ Offers Deeper Insights

• Circulating supply is often self-reported by project teams, leading to potential inaccuracies due to inconsistent update schedules and outdated tracking methods.  
• Unlocked Supply offers a more reliable metric by using vesting schedules, providing early warnings of token releases not yet reflected in circulating supply.
• Understanding both Circulating and Unlocked Supply metrics is essential to navigating the complexities of tokenomics and making informed investment decisions in the crypto space.

Circulating supply, a common metric for valuing crypto tokens, often hides crucial details. Token Unlocks is tackling this issue by introducing unlocked supply, a more accurate way to estimate future token availability .

The problem with circulating supply lies in its reliance on self-reported data and infrequent updates. This can lead to significant discrepancies, making it difficult for investors to get a true picture of a token’s value.

Due to the lack of universal reporting standards, the accuracy of circulating supply can vary significantly. Additionally, methods for tracking circulating supply, like wallet movements and estimations, can be outdated. Sometimes they’re only updated monthly, causing big differences in the reported numbers.

To tackle these issues is why Token Unlocks introduced a new metric: unlocked supply. Unlike circulating supply, which can lag behind, unlocked supply uses vesting schedules for a more accurate estimate of future token supply. This gives investors a heads-up about possible market shifts and also this approach offers a more structured and accurate way to estimate future token supply, giving investors a leading indicator of potential market changes.

One of the key benefits of unlocked supply is its ability to serve as an early warning system. By providing granular data that is either updated daily or weekly, it allows users to anticipate token releases that have not yet been reflected in circulating supply metrics. Moreover, comparing unlocked supply with circulating supply can act as a verification tool, helping to ensure the accuracy of the data presented by project teams.

However, unlocked supply is not without its challenges. The metric can be influenced by dynamic factors such as token burns, incentive programs, DAO decisions, and ecosystem grants. These elements, often introduced after a project’s whitepaper or Token Generation Event (TGE), can alter the expected supply.

To truly understand a project’s tokenomics, you need to look at both circulating supply and unlocked supply. Together, they give a clearer picture of supply dynamics, helping everyone make smarter decisions in the ever-changing crypto world.