When looking at a cryptocurrency, you will often see two supply figures. Max supply is the total number of coins that will ever exist for that project, a hard limit set by its rules. Circulating supply is how many coins are actually available and in use right now.
The difference matters because not all coins that will eventually exist are in circulation yet. Some may be released gradually over time, held in reserve, or locked. So a coin can have a large max supply but a much smaller circulating supply at present.
These figures relate to tokenomics and market cap. Circulating supply is used to calculate current market cap, while max supply hints at future issuance. Understanding both helps you read a project numbers without drawing conclusions from a single figure alone.
Frequently Asked Questions
Why is circulating supply lower than max supply?
Because not all coins are released at once. Some are issued gradually, reserved, or locked, so the amount in circulation now can be well below the eventual maximum.
Which supply is used for market cap?
Current market cap is calculated using circulating supply multiplied by price. Max supply is used for other measures, such as fully diluted valuation.
