Main Takeaways

  • Binance is updating its token information methodology to incorporate token unlock schedules, offering a more transparent and comprehensive view of market capitalization and circulating supply.

  • The new methodology differentiates between market cap (value of tokens already circulating) and unlocked market cap (value of tokens that can be circulating), providing users with a clearer picture.

  • By including non-public holdings that are tradable when information is available, Binance aims to improve the accuracy and usability of token data for better-informed trading decisions.

Market capitalization (market cap) is one of the most widely used metrics in evaluating digital assets. It is generally calculated by multiplying the total circulating supply of a token by its current market price, giving traders and investors an indication of an asset’s overall valuation. A high market cap often suggests greater adoption, stability, and liquidity, while lower market caps may indicate higher volatility and potential for price swings.

However, traditional market cap calculations often do not account for future token unlocks, which can significantly impact supply dynamics. This can lead to an incomplete picture of an asset’s potential market valuation and future price behavior. Our recent token information methodology update is designed to address this limitation. 

Market Cap vs. Unlocked Market Cap

With this update, we introduce a distinction between market cap and unlocked market cap to better reflect an asset’s financial reality.

  • Market Cap: The value of tokens that are currently circulating and available in the market, calculated as circulating supply × current price (the old methodology).

  • Unlocked Market Cap: The value of all tokens that can be circulating, including those unlocked but not yet publicly available for trading (the new methodology).

Similarly, the new methodology distinguishes between circulating supply and unlocked circulating supply:

  • Circulating Supply: The number of tokens that are publicly accessible and actively traded.

  • Unlocked Circulating Supply: The number of tokens that are unlocked and could enter circulation based on project release schedules.

This distinction helps users understand the supply-and-demand mechanics of a token more clearly, allowing them to better anticipate potential impacts on price and liquidity.

Why Binance Is Making This Change

At Binance, our priority is to provide users with actionable, transparent, and meaningful data that enhances their decision-making process. By incorporating token unlock schedules into the picture, we aim to give traders and investors a more realistic assessment of an asset’s valuation beyond what is currently in public circulation.

With this new approach, users will be able to:

  • View token unlock schedules directly on Binance, making it easier to track future supply changes.

  • Assess more accurate market valuations with the inclusion of unlocked, but non-publicly traded, holdings.

  • Make better-informed trading decisions based on a clearer picture of an asset’s capitalization.

Moving forward, users will notice an updated display of market cap and circulating supply data across Binance’s token information pages. When token unlock data is available, it will be reflected in the new market cap and circulating supply metrics. If this data is unavailable, non-publicly accessible tokens will remain excluded from calculations.

Additionally, token unlock schedules will be directly accessible through Binance’s website and app, giving users easy access to essential supply-related information for listed assets.

Final Thoughts

This update is part of Binance’s effort to provide the most transparent and actionable crypto data. By refining how we present token supply and valuation metrics, we aim to empower users with better insights, allowing them to navigate the market with greater confidence.

As the crypto landscape evolves, Binance continues to lead with innovation, ensuring that traders and investors have access to the most relevant, clear, and useful data. Stay tuned for further enhancements, and explore the updates on Binance’s website and app today.

Further Reading

  • Binance Updates Token Information Methodology

  • Market Capitalization – Binance Academy

  • Binance Build December 2024: Key Enhancements Driven by User Feedback