Author: Zheng Jie, Artemis Data Researcher; Cosmo Jiang, Portfolio Manager at Pantera Capital Translated by: Shaw, Golden Finance
Abstract: Currently, cryptocurrency data providers show significant discrepancies in the supply metrics of the same token, which greatly affects market capitalization or valuation multiples (e.g., market cap/revenue). Artemis and Pantera Capital have proposed a simple framework called "Outstanding Supply", which is total supply - total holdings by the protocol. This is similar to the stock market's "Outstanding Shares", which is total issued shares - total treasury shares. Our goal is to provide investors with a clearer valuation comparison between tokens and stocks.
Introduction
When investors purchase stocks, they usually pay attention to the following key data to understand the issuance situation of the stocks:
Authorized Shares: The total number of shares that a company is allowed to issue according to legal provisions.
Issued Shares (Number of Shares Issued): The actual number of shares issued by the company since its establishment.
Circulating Shares (Number of Circulating Shares): The number of shares currently held by all investors, excluding the company's own treasury shares.
Free Float Shares (Available Shares for Trading): The number of shares that are actually available for public trading.
Why is it important?
This data is crucial for investors, mainly reflected in the following aspects:
Ownership Definition: Investors can clearly understand the proportion of economic rights they hold in the company through this data.
Supply Risk Assessment: Able to assist investors in predicting the potential increase in stock supply in the future market.
Liquidity Consideration: Helps investors assess the ease of trading the stock in the market, meaning the likelihood of executing trades without significantly impacting the stock price.
Source: Artemis
Let's take a look at Uber.
Authorized Shares: 5 billion shares → The maximum number of shares that Uber is allowed to issue. Public market investors almost never mention authorized shares.
Shares Issued: Approximately 2.1 billion shares → The actual number of shares issued by Uber
Circulating Shares: Approximately 2.09 billion shares → The number of shares currently held by Uber investors. This is the number of shares that public market investors truly care about.
Free Float Shares: Approximately 2.07 billion shares → The actual number of shares that can be traded in the market.
Now, imagine if Uber were valued based on its authorized shares; it would appear to be a company with a market capitalization of $469 billion and a price-to-earnings ratio of up to 70 times, which seems unreasonable. Authorized shares are not a number that any investor uses to value a company, as multiplying authorized shares by share price has no real economic meaning.
However, in reality, investors assess its value based on Uber's outstanding shares (approximately 2.09 billion shares), which brings Uber's market capitalization close to $195.9 billion (as of August 17, 2025), with an expected price-to-earnings ratio of 30 times. The outstanding shares reflect the economic reality of who owns a share of the company's value.
Current Issues with Token Supply Metrics
In the cryptocurrency space, most investors only focus on the circulating supply of tokens.
Circulating Supply = Tokens available for public trading
However, the definition of circulating supply varies greatly:
Some projects will calculate locked tokens, while others will not.
Some include the reserve wallet in the calculation, while others do not.
Some may overlook the tokens that are burned.
Some projects quietly release tokens without any clear disclosure.
On the other hand, investors often see FDV (Fully Diluted Valuation)
FDV (Fully Diluted Valuation) = Token Price × Total Supply
It's like valuing Uber as if all its existing shares could be traded tomorrow, or the aforementioned $469 billion market cap, which is also economically inaccurate.
Therefore, investors can only choose between the following two: FDV (i.e. all issued tokens), or circulating supply (which is defined in a confusing and inconsistent way, and importantly, usually excludes unallocated and illiquid tokens).
Why is the "Issued Supply" a Useful Intermediate Value
The role of "circulating supply" is reflected here. The "circulating supply" counts all tokens that have been created, while excluding the portion held by the protocol that is not actually in circulation, such as tokens held by foundations, reserves, or laboratories.
It can be understood as the concept of "circulating shares" in the cryptocurrency field.
Compared to fully diluted valuation, the "circulating supply" is more relevant;
Compared to circulating supply, the definition of "issued supply" is clearer and more standardized.
"Issued Supply" is a middle ground based on economic reality, which is trustworthy for investors.
Real Token Example - Hyperliquid
Source: Artemis
Source: Artemis
Why "Circulating Supply" is Crucial
For many years, in the cryptocurrency space, token valuation has often defaulted to the method of "Fully Diluted Valuation (FDV) = Max Supply × Price." This is similar to valuing Uber by assuming its 5 billion authorized shares have all been actually issued. This results in a valuation of Uber at about $469 billion, rather than the approximately $196 billion market cap you typically see on Google Finance.
Subsequently, the industry shifted to using Total Supply (Total Supply ) as a metric, but this still overestimates the valuation, as the total supply includes the amount held by the protocol. Taking Hyperliquid as an example, of the 1 billion HYPE tokens issued, 6% (i.e., 60 million tokens) are held by the Hyper Foundation. These tokens are owned by the protocol and can be used for protocol operations, project funding, or team salary disbursement, among other purposes. From an economic perspective, they are fundamentally different from the tokens held by investors.
Based on this, the issued supply of Hyperliquid (approximately $20.8 billion) provides us with the closest perspective of a "real" market capitalization. This concept is similar to the concept of circulating shares in the stock market, which includes all tokens held by investors while excluding treasury stock.
In contrast, the circulating supply valuation of Hyperliquid (approximately $10.5 billion) can more accurately reflect the liquidity and tradability of the HYPE token in the actual market, similar to the concept of freely traded shares in the stock market.
These supply metrics are important, as calculating valuation multiples such as Price-to-Earnings (P/E) or Price-to-Sales (P/S) based on Fully Diluted Valuation (FDV) often leads to these multiples being artificially inflated. This phenomenon is particularly evident in comparative analysis; projects like Hyperliquid, which have a large amount of supply that has not yet entered circulation, will therefore be adversely affected in terms of valuation compared to other projects in the same industry.
Note: Our definition of "total supply" differs from that of CoinGecko. CoinGecko includes all tokens in its calculation of total supply regardless of ownership status. Our calculation method, however, is different; it deducts permanently destroyed tokens and those that have not yet been generated to ensure that the "total supply" accurately reflects the actual number of tokens that exist and can impact the valuation of the project.
Reasons for the Discrepancies in Existing Data
Currently, when focusing on the $HYPE token, most investors will find that there are significant differences in the data obtained based on different data sources:
The fully diluted valuation (Outstanding FDV) provided by DefiLlama shows that Hyperliquid's market cap reaches 27.8 billion dollars. Assuming a token price of 43 dollars, simple calculations yield that the number of circulating tokens they recognize is approximately 647 million. However, the actual situation is that as of now, the total number of tokens minted by Hyperliquid is only 577 million. This clearly indicates that DefiLlama's data is significantly overestimated.
CoinGecko's circulating supply valuation is estimated at 14.5 billion USD. Based on this valuation and the current token price, it implies that they consider approximately 337 million tokens to be in circulation.
However, this data is likely to be overestimated. The reason is that CoinGecko did not fully exclude all protocol-held wallets during the statistical process, such as the Hyper Foundation, community grant wallets, and aid fund wallets. In the actual market environment, many tokens in these wallets have not yet truly entered the public trading market for circulation, therefore the "real" number of circulating tokens should be lower than the figures reported by CoinGecko.
The challenge is that these differences can lead to deviations in project valuations of up to billions of dollars. In the absence of unified and clear standards, different researchers or investors analyzing the same token are likely to have completely different perceptions of its actual scale.
In summary, this fully illustrates why we urgently need to clarify the concept of "circulating supply" and build a more precise and reasonable concept of "issued supply." The concept of "issued supply" provides a transparent standard that can be compared to traditional stock markets for research and analysis in the field of cryptocurrencies, which helps improve the accuracy and comparability of research.
Artemis Plan: Issued Supply and More Optimized Circulating Supply
Total Supply
Definition: Total supply refers to the number of tokens that have been created (minted), minus the number of tokens that have been destroyed. It can be simply compared to the issued shares in the stock market.
The total supply calculation formula is: Total Supply = Maximum Supply - Uncreated Token Quantity - Destroyed Token Quantity
Source: Artemis
Issued Supply (New Indicator)
Definition: The circulating supply refers to all tokens that are currently in existence, excluding those held by the protocol itself (such as those held by the foundation, DAO, laboratories, or tokens in locked distribution contracts). We exclude tokens held by the protocol because such tokens are similar to treasury shares in stocks. They exist but are not held by external investors. Only tokens held by external entities can truly reflect the actual ownership situation, market liquidity, and market value. This metric can be understood analogously to the concept of outstanding shares in stocks.
Issued Supply = Total Supply - Total Amount Held by the Protocol
Description of Components
Total Holdings of the Agreement: The total amount of tokens held by the main management entities of the agreement (DAO, foundation, laboratory, etc.). Specifically includes the following categories:
DAO/Foundation Holdings: Tokens held by entities responsible for governing the protocol or promoting its development. The ownership of such tokens aims to ensure the orderly operation and long-term development of the protocol, with ownership and control closely tied to the strategic direction of the protocol.
Laboratory Holdings: In the absence of an independent foundation, certain laboratory entities actually assume the role of protocol managers. These laboratories hold tokens, usually in the form of ecosystem funds or distribution managers, to support the construction and maintenance of the protocol ecosystem.
Programmatic Distribution Contract: A mechanism realized through smart contract technology that can automatically release tokens into the protocol ecosystem according to preset times and rules. This method helps ensure the reasonable distribution and gradual circulation of tokens within the ecosystem.
Idle Funds: Tokens stored in on-chain funds that are managed by a validator governance system. In this model, the use and distribution of tokens must be decided through a decentralized voting mechanism, and these tokens remain under the custody of the protocol until they are finally released.
Undestroyed Buyback Reserves: Tokens that have been repurchased by the protocol through buyback operations but have not yet been destroyed. These tokens are temporarily in a reserve state, and their subsequent disposal may affect the economic model of the protocol and market supply and demand.
More optimized circulating supply (revised indicator)
Definition: Circulating supply refers to the number of tokens that are currently available for trading in the market. This metric excludes tokens that are locked, tokens held by insiders or teams that are not fully unlocked due to vesting restrictions, and tokens in reserve wallets with low liquidity. It can be simply compared to the concept of freely traded shares in the stock market, aiming to more accurately reflect the actual tradable scale and liquidity status of tokens in the market.
Source: Artemis
The formula for calculating circulating supply is: Circulating Supply = Issued Supply - Locked Token Quantity
Why are these two indicators needed ###
Enhancing Transparency: These two indicators can clearly present the difference between the overall creation status of the token and the actual portion available for trading, providing market participants with a comprehensive and clear data perspective.
Optimize Risk Assessment: With the help of these two indicators, investors and researchers can more accurately estimate the number of tokens that may enter the market circulation phase in the future, thereby assessing potential market risks more precisely.
Standardization: In the context of numerous and complex projects in the cryptocurrency field, the clear definition of these two indicators helps to eliminate ambiguity in data statistics and interpretation across different projects, establishing a unified and standardized measurement criterion for the entire industry.
Precise Valuation: A carefully considered and optimized circulating supply metric that provides more accurate data support for the market value assessment of cryptocurrency projects, thereby helping market participants make more informed investment decisions.
Project Comparability: By using these two indicators, different cryptocurrency projects can be compared and analyzed under a unified standard, making horizontal comparisons within the industry more scientific, objective, and fair, which helps to uncover the true value and potential of the projects.
Summary
In the traditional stock market, investors can obtain clear and explicit information about the number of shares issued and the potential supply that may flow into the market, without having to guess. This high level of information transparency establishes a solid foundation of trust for market participants.
The cryptocurrency industry also needs to achieve this level of transparency. If the cryptocurrency industry wishes to gain the trust and recognition of institutional investors, it must meet the transparency standards required by these institutions. The introduction and application of the two indicators "issued supply" and the more optimized "circulating supply" allow investors in the cryptocurrency field to enjoy a level of transparency in data acquisition and analysis similar to that of traditional stock markets, which is significant for promoting the healthy and orderly development of the cryptocurrency market.
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Two major indicators of stocks and tokens: issued supply and optimized circulating supply.
Author: Zheng Jie, Artemis Data Researcher; Cosmo Jiang, Portfolio Manager at Pantera Capital Translated by: Shaw, Golden Finance
Abstract: Currently, cryptocurrency data providers show significant discrepancies in the supply metrics of the same token, which greatly affects market capitalization or valuation multiples (e.g., market cap/revenue). Artemis and Pantera Capital have proposed a simple framework called "Outstanding Supply", which is total supply - total holdings by the protocol. This is similar to the stock market's "Outstanding Shares", which is total issued shares - total treasury shares. Our goal is to provide investors with a clearer valuation comparison between tokens and stocks.
Introduction
When investors purchase stocks, they usually pay attention to the following key data to understand the issuance situation of the stocks:
Why is it important?
This data is crucial for investors, mainly reflected in the following aspects:
Source: Artemis
Let's take a look at Uber.
Now, imagine if Uber were valued based on its authorized shares; it would appear to be a company with a market capitalization of $469 billion and a price-to-earnings ratio of up to 70 times, which seems unreasonable. Authorized shares are not a number that any investor uses to value a company, as multiplying authorized shares by share price has no real economic meaning.
However, in reality, investors assess its value based on Uber's outstanding shares (approximately 2.09 billion shares), which brings Uber's market capitalization close to $195.9 billion (as of August 17, 2025), with an expected price-to-earnings ratio of 30 times. The outstanding shares reflect the economic reality of who owns a share of the company's value.
Current Issues with Token Supply Metrics
In the cryptocurrency space, most investors only focus on the circulating supply of tokens.
However, the definition of circulating supply varies greatly:
On the other hand, investors often see FDV (Fully Diluted Valuation)
It's like valuing Uber as if all its existing shares could be traded tomorrow, or the aforementioned $469 billion market cap, which is also economically inaccurate.
Therefore, investors can only choose between the following two: FDV (i.e. all issued tokens), or circulating supply (which is defined in a confusing and inconsistent way, and importantly, usually excludes unallocated and illiquid tokens).
Why is the "Issued Supply" a Useful Intermediate Value
The role of "circulating supply" is reflected here. The "circulating supply" counts all tokens that have been created, while excluding the portion held by the protocol that is not actually in circulation, such as tokens held by foundations, reserves, or laboratories.
It can be understood as the concept of "circulating shares" in the cryptocurrency field.
Compared to fully diluted valuation, the "circulating supply" is more relevant;
Compared to circulating supply, the definition of "issued supply" is clearer and more standardized.
"Issued Supply" is a middle ground based on economic reality, which is trustworthy for investors.
Real Token Example - Hyperliquid
Source: Artemis
Source: Artemis
Why "Circulating Supply" is Crucial
For many years, in the cryptocurrency space, token valuation has often defaulted to the method of "Fully Diluted Valuation (FDV) = Max Supply × Price." This is similar to valuing Uber by assuming its 5 billion authorized shares have all been actually issued. This results in a valuation of Uber at about $469 billion, rather than the approximately $196 billion market cap you typically see on Google Finance.
Subsequently, the industry shifted to using Total Supply (Total Supply ) as a metric, but this still overestimates the valuation, as the total supply includes the amount held by the protocol. Taking Hyperliquid as an example, of the 1 billion HYPE tokens issued, 6% (i.e., 60 million tokens) are held by the Hyper Foundation. These tokens are owned by the protocol and can be used for protocol operations, project funding, or team salary disbursement, among other purposes. From an economic perspective, they are fundamentally different from the tokens held by investors.
Based on this, the issued supply of Hyperliquid (approximately $20.8 billion) provides us with the closest perspective of a "real" market capitalization. This concept is similar to the concept of circulating shares in the stock market, which includes all tokens held by investors while excluding treasury stock.
In contrast, the circulating supply valuation of Hyperliquid (approximately $10.5 billion) can more accurately reflect the liquidity and tradability of the HYPE token in the actual market, similar to the concept of freely traded shares in the stock market.
These supply metrics are important, as calculating valuation multiples such as Price-to-Earnings (P/E) or Price-to-Sales (P/S) based on Fully Diluted Valuation (FDV) often leads to these multiples being artificially inflated. This phenomenon is particularly evident in comparative analysis; projects like Hyperliquid, which have a large amount of supply that has not yet entered circulation, will therefore be adversely affected in terms of valuation compared to other projects in the same industry.
Note: Our definition of "total supply" differs from that of CoinGecko. CoinGecko includes all tokens in its calculation of total supply regardless of ownership status. Our calculation method, however, is different; it deducts permanently destroyed tokens and those that have not yet been generated to ensure that the "total supply" accurately reflects the actual number of tokens that exist and can impact the valuation of the project.
Reasons for the Discrepancies in Existing Data
Currently, when focusing on the $HYPE token, most investors will find that there are significant differences in the data obtained based on different data sources:
However, this data is likely to be overestimated. The reason is that CoinGecko did not fully exclude all protocol-held wallets during the statistical process, such as the Hyper Foundation, community grant wallets, and aid fund wallets. In the actual market environment, many tokens in these wallets have not yet truly entered the public trading market for circulation, therefore the "real" number of circulating tokens should be lower than the figures reported by CoinGecko.
The challenge is that these differences can lead to deviations in project valuations of up to billions of dollars. In the absence of unified and clear standards, different researchers or investors analyzing the same token are likely to have completely different perceptions of its actual scale.
In summary, this fully illustrates why we urgently need to clarify the concept of "circulating supply" and build a more precise and reasonable concept of "issued supply." The concept of "issued supply" provides a transparent standard that can be compared to traditional stock markets for research and analysis in the field of cryptocurrencies, which helps improve the accuracy and comparability of research.
Artemis Plan: Issued Supply and More Optimized Circulating Supply
Total Supply
Definition: Total supply refers to the number of tokens that have been created (minted), minus the number of tokens that have been destroyed. It can be simply compared to the issued shares in the stock market.
Source: Artemis
Issued Supply (New Indicator)
Definition: The circulating supply refers to all tokens that are currently in existence, excluding those held by the protocol itself (such as those held by the foundation, DAO, laboratories, or tokens in locked distribution contracts). We exclude tokens held by the protocol because such tokens are similar to treasury shares in stocks. They exist but are not held by external investors. Only tokens held by external entities can truly reflect the actual ownership situation, market liquidity, and market value. This metric can be understood analogously to the concept of outstanding shares in stocks.
Description of Components
Total Holdings of the Agreement: The total amount of tokens held by the main management entities of the agreement (DAO, foundation, laboratory, etc.). Specifically includes the following categories:
More optimized circulating supply (revised indicator)
Definition: Circulating supply refers to the number of tokens that are currently available for trading in the market. This metric excludes tokens that are locked, tokens held by insiders or teams that are not fully unlocked due to vesting restrictions, and tokens in reserve wallets with low liquidity. It can be simply compared to the concept of freely traded shares in the stock market, aiming to more accurately reflect the actual tradable scale and liquidity status of tokens in the market.
Source: Artemis
Why are these two indicators needed ###
Summary
In the traditional stock market, investors can obtain clear and explicit information about the number of shares issued and the potential supply that may flow into the market, without having to guess. This high level of information transparency establishes a solid foundation of trust for market participants.
The cryptocurrency industry also needs to achieve this level of transparency. If the cryptocurrency industry wishes to gain the trust and recognition of institutional investors, it must meet the transparency standards required by these institutions. The introduction and application of the two indicators "issued supply" and the more optimized "circulating supply" allow investors in the cryptocurrency field to enjoy a level of transparency in data acquisition and analysis similar to that of traditional stock markets, which is significant for promoting the healthy and orderly development of the cryptocurrency market.