Circulating Supply: The Complete Definition for Token Creators
Circulating supply is the number of cryptocurrency or token coins that are publicly available and trading in the market. It excludes tokens locked, reserved for the team, or held by the foundation. This figure is central to calculating market cap and understanding a token's actual availability and potential price pressure.
Key Points
- 1Circulating supply is the count of tokens actively trading on the open market.
- 2It's the key metric for calculating Market Cap: Price x Circulating Supply.
- 3Always excludes locked, team-allocated, or foundation-held tokens.
- 4A lower circulating supply can mean higher volatility from buy/sell pressure.
- 5For launchpads like Spawned, initial circulating supply is a critical launch parameter.
What is Circulating Supply?
The cornerstone of token economics.
In cryptocurrency, circulating supply refers to the approximate number of coins or tokens that are publicly available and circulating in the market. Think of it as the 'float' in traditional stock markets. These are the tokens held by investors, traded on exchanges, and used in decentralized applications. It is a dynamic number that can increase through new token emissions or vesting schedules, or decrease through token burns.
For a creator launching a token, this is your token's public float. On a launchpad like Spawned, you define what portion of your total minted supply is part of the initial circulating supply at launch. A common practice is to launch with 50-70% of the total supply in circulation, with the remainder locked or vested.
Why Circulating Supply Matters for Your Token
Understanding and strategically setting your circulating supply is non-negotiable for a successful launch. It directly influences investor perception, liquidity, and long-term viability.
- Determines Market Capitalization: Market Cap = Token Price × Circulating Supply. This is the primary valuation metric for your project. A $1 token with a 1 million circulating supply has a $1M market cap.
- Impacts Liquidity & Volatility: A lower circulating supply often means lower liquidity, which can lead to higher price volatility. A large, sudden sell-off can drastically move the price.
- Signals Project Maturity & Trust: A transparent and reasonable circulating supply, with clear vesting schedules for locked tokens, builds investor confidence. Opaque or excessively large locked supplies are red flags.
- Affects Exchange Listings: Major exchanges evaluate circulating supply and token distribution before listing. A poorly structured supply can hinder your ability to graduate from a launchpad.
- Governs Holder Rewards: On platforms like Spawned, which offers 0.30% ongoing rewards to holders, the circulating supply defines the active holder base that earns from trade volume.
Circulating vs. Total vs. Max Supply
Don't mix up these three critical numbers.
These three metrics are often confused but represent distinct concepts. Getting them right is crucial for your project's documentation and credibility.
| Metric | Definition | What It Includes/Excludes | Example (1B Token Project) |
|---|---|---|---|
| Circulating Supply | Tokens publicly trading. | Includes: Tokens on exchanges, in public wallets. Excludes: Locked, team, foundation tokens. | 500,000,000 (50% of total, launched) |
| Total Supply | Total tokens that currently exist. | Includes: Circulating supply + all unlocked/locked tokens. Excludes: Tokens that may ever be minted in the future. | 1,000,000,000 (All minted at launch) |
| Max Supply | The absolute maximum tokens that can ever exist. | The hard cap coded into the token's smart contract. | 1,000,000,000 (Same as total, if no more can be minted) |
Key Takeaway: For most Solana tokens launched today, Total Supply and Max Supply are often the same at launch. The critical variable you control is the Circulating Supply.
The Verdict: How to Set Circulating Supply on Spawned
The optimal range for a sustainable launch.
For creators launching on Spawned, we recommend an initial circulating supply between 40% and 70% of your total supply.
This range balances several factors:
- Liquidity & Price Discovery (40-70%): Provides enough tokens for active trading, enabling organic price discovery and reducing extreme volatility from low float.
- Investor Confidence: Demonstrates commitment by not dumping a huge supply on the market immediately. The remaining 30-60% should be transparently allocated (e.g., 20% team vesting over 2 years, 15% treasury, 10% community rewards, 15% locked for future exchange listings).
- Graduation Readiness: A credible supply structure is a prerequisite for graduating from Spawned's launchpad to broader markets, where the 1% perpetual fee via Token-2022 begins.
Avoid: Launching with >90% in circulation (appears like a cash-out) or <20% (creates an artificially scarce, volatile pump).
How to Calculate Your Token's Circulating Supply
Follow these steps to accurately determine and communicate your circulating supply.
Common Circulating Supply Mistakes to Avoid
These errors can undermine your project before it even starts.
- Misreporting on Trackers: Manually updating sites like CoinGecko with wrong numbers. Always use verified methods to update.
- Opaque Lockups: Having large, unexplained "dev wallets" that can sell at any time, destroying holder trust.
- Ignoring Vesting Impact: Not planning for the inflation and sell pressure when large team or investor allocations unlock (e.g., 20% of supply unlocking on the same day).
- Over-Promising with Low Float: Creating massive hype for a token with a 5% circulating supply, leading to an unsustainable price pump followed by a collapse.
- Forgetting the Spawned Model: Not factoring in that 0.30% of every trade goes to holders. A well-distributed circulating supply means more holders benefit, creating stronger community incentives.
Ready to Launch with the Right Supply?
Define your token's foundation correctly from day one.
Now that you understand the circulating supply definition and its strategic importance, it's time to put knowledge into action. Spawned provides the tools and framework to launch your Solana token with a credible, transparent supply structure.
- Set Clear Parameters: Define your initial circulating supply, total supply, and vesting schedules directly in our launch dashboard.
- Build Trust On-Chain: Utilize transparent locking mechanisms visible to all.
- Launch for 0.1 SOL (~$20): Get your token live with a fair supply model.
- Include a Professional Website: Our AI builder (a $29-$99/month value) creates your project's home, where you can clearly explain your tokenomics.
Launch your token on a platform designed for sustainable growth, not just a quick pump.
Related Terms
Frequently Asked Questions
The most reliable sources are major cryptocurrency data aggregators like CoinGecko, CoinMarketCap, or DexScreener. They typically display it prominently next to the token's price. You should also verify this information against the project's official documentation or website, which should provide a clear breakdown. For tokens launched on Spawned, this data is integrated into the project's AI-built site.
Yes, circulating supply can decrease through a process called a token burn. Projects can send a portion of the circulating tokens to a verifiable unspendable address, permanently removing them from circulation. This is often done to increase scarcity. Supply can also effectively decrease if a project decides to permanently lock a portion of the circulating tokens in a smart contract, moving them from 'circulating' to 'non-circulating' status.
Market capitalization aims to value what is actively available for trading. Using total supply would inflate the valuation by including tokens that are not on the market and may not be for years (like vested team tokens). Circulating supply provides a more accurate picture of the current market value and buying/selling pressure. It's the standard across both crypto and traditional finance for calculating the float-based market cap.
Circulating supply directly interacts with demand to determine price. With high demand, a lower circulating supply can lead to a rapid price increase due to scarcity. Conversely, the same selling volume will cause a larger price drop for a token with a low circulating supply versus one with a high supply. It's a core component of tokenomics: you must balance supply with anticipated demand and planned releases from vesting schedules.
For a new meme coin, a common and often effective range is 50% to 70% of the total supply at launch. This provides enough liquidity for trading while reserving tokens for future use (liquidity pools, marketing, community rewards). Launching with 100% in circulation can look like a 'cash grab,' while launching with less than 30% can create dangerous, artificial scarcity and extreme volatility. Spawned's model supports this balanced approach.
You typically need to submit a form through the exchange or data aggregator's portal for developers. They require verification that you are an official team member and will ask for proof (like signed messages from the deployer wallet) and a clear, public breakdown of your tokenomics. Having this information readily available on your Spawned AI-built website streamlines this process significantly.
Yes. While Spawned's core service is launching your token, operating within the Solana ecosystem means you have access to standard tools and programs for token management. You can use Solana's native vesting and locking programs or third-party audited smart contracts to manage team and treasury allocations. A clear, on-chain vesting schedule is a best practice we recommend for all serious projects launching on our platform.
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