Circulating vs Max Supply: Tokenomics and Dilution Explained

Circulating vs max supply is the part of tokenomics that most directly affects your returns and gets the least attention. A coin's price can rise 50% while the value of your holding barely moves — if the supply grows just as fast. This guide explains the three supply numbers every coin page shows, how to turn them into one useful ratio, and why that ratio is one of the ten checks in Stoxly's crypto analysis checklist.

The three supply numbers

Circulating supply — coins that exist and are freely tradable right now. This is what market cap is based on.
Total supply — coins that exist right now, including locked, vested or treasury-held coins that cannot yet be sold.
Maximum supply — the hard cap on coins that will ever exist, written into the protocol. Not every asset has one.

For Bitcoin the numbers are famously simple: the Bitcoin whitepaper and the protocol's issuance schedule cap the supply at 21 million, new coins are issued to miners on a fixed, halving schedule, and there is no team allocation or vesting. When we pulled the data in September 2026, about 20.09 million coins were circulating — 95.6% of the maximum.

For most newer tokens the picture is messier. A launch might put 10–20% of the supply into circulation, with the rest split between a foundation treasury, team allocations vesting over several years, investor allocations with cliffs, and ecosystem rewards released on a schedule. All of those coins exist in the total supply, count toward the maximum, and will eventually reach the market.

The one ratio that matters: supply issued

Divide circulating supply by maximum supply and you get the issued share — the fraction of all coins that will ever exist that are already out there:

Supply issued = circulating supply ÷ maximum supply × 100

Bitcoin: 95.6%. A token two years after launch with a ten-year emission schedule: perhaps 30%. The complement of that number is your future dilution. If 30% is issued, the remaining 70% will be sold into the market by miners, validators, team members and early investors over the coming years, and every one of those sales competes with your position for buyers.

Stoxly's threshold for this check is 50% issued. Above it, most dilution is behind you and the supply schedule can no longer surprise you much. Below it, the token's market cap understates how large the project is really priced — which is exactly the market cap vs FDV trap.

What "uncapped supply" means

Some of the largest networks have no maximum supply at all. Ethereum is the best-known example: its issuance is governed by protocol rules rather than a fixed cap, and since EIP-1559 a portion of every transaction fee is burned, so the net supply can grow or shrink depending on network usage. Dogecoin issues a fixed number of new coins every year forever, so its supply grows at a slowly declining percentage rate.

Uncapped does not automatically mean inflationary — Ethereum's net issuance has been close to zero or negative for extended periods — but it does mean the "issued share" ratio is undefined. There is no denominator. Stoxly therefore marks the supply check as N/A for uncapped assets and does not score it either way, rather than penalising a design choice that may be perfectly sound. For those assets, look at the annual issuance rate instead: how many new coins per year, as a percentage of the current supply, and whether any burn mechanism offsets it.

Unlock schedules: the dilution you can see coming

The dangerous part of a low issued share is not the number itself but the timing of the remaining supply. Vesting schedules typically release large tranches on fixed dates — a "cliff" after twelve months, then monthly or quarterly unlocks. Because those dates are public, sophisticated holders sell ahead of them, and prices often weaken in the weeks before a large unlock even if the recipients hold.

Before buying a token with a low issued share, find its unlock schedule (usually in the project's documentation or tokenomics page) and ask three questions:

How much of the remaining supply unlocks in the next twelve months, as a percentage of what circulates today?
Who receives it — miners and validators who need to sell to cover costs, or investors sitting on large paper gains?
Is there any offsetting mechanism — burns, buybacks, staking lock-ups — that absorbs new supply?

Inflation is not always bad, dilution always is

It helps to separate two words that get used interchangeably. Inflation is the growth rate of the supply — a protocol design choice, and a reasonable one if new coins pay for security (mining or staking rewards). Dilution is what inflation does to your share of the network if you do not receive any of the new coins. A staker who earns the inflation rate is not diluted; a passive holder is. When you evaluate a proof-of-stake asset, compare the staking yield to the issuance rate: if issuance is 5% per year and staking pays 4%, an unstaked holder loses about 5% of network share per year, a staked one about 1%.

How this fits the checklist

Supply issued is one check in the "Supply & Network" section of Stoxly's 10-point crypto analysis, alongside project age and developer activity. Failing it — less than half the maximum supply issued — triggers the "Inflationary Supply" verdict, because heavy scheduled dilution is a structural headwind that no amount of liquidity or developer activity offsets. Passing it does not make a token a good buy; it means the supply schedule can no longer ambush you.

FAQ

What is the difference between circulating supply and total supply?

Circulating supply counts only coins that are tradable today; total supply also includes coins that exist but are locked — team vesting, foundation treasuries, unclaimed rewards. Market cap uses circulating supply. A large gap between the two means significant supply will enter the market later, which is dilution you can predict.

Is a cryptocurrency with unlimited supply a bad investment?

Not necessarily. Ethereum has no maximum supply and burns part of every transaction fee, so its net issuance has at times been negative. What matters for an uncapped asset is the annual issuance rate relative to demand and whether you can capture that issuance by staking. Stoxly marks the supply check N/A for uncapped assets rather than penalising them.

What percentage of supply should be in circulation?

As a first-screen rule, at least 50% of the maximum supply. Above that, most dilution has already happened and the remaining schedule rarely surprises. Below it, check the unlock calendar for the next twelve months and compare the token's fully diluted valuation — not its market cap — to established assets.

Want to see the issued share alongside liquidity, age and performance? Run a free crypto analysis.

This article is for educational purposes only and is not financial advice. Crypto-assets are highly volatile and you can lose your entire investment.