Free lesson · Crypto markets

Token issuance, unlocks and dilution

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More tokens can mean a larger balance without a larger claim on the system. Separate unit growth from ownership share and value.

Circulating supply, total supply and fully diluted supply answer different questions. An unlock transfers previously restricted supply into tradable hands; it does not necessarily create new tokens at that instant.

A constant-total-network-value illustration isolates dilution arithmetic. It is not a price forecast: demand, token rights and market structure can change alongside issuance. Market capitalization is price times the selected supply convention, not cash available for redemption.

Apply it in a strategy

• Audit whether a token-return narrative confuses issuance, unlocks, ownership percentage and economic value.
• Record the input timestamp, executable quantity, currency and horizon. Reconcile the result with a cash-flow or state table.
• Stress this failure condition: Constant network value is a sensitivity assumption, not a prediction of how investors respond to supply.

Research deliverable

Build and explain a token issuance, unlocks and dilution worksheet. Audit whether a token-return narrative confuses issuance, unlocks, ownership percentage and economic value.

Evidence boundary: Synthetic arithmetic and scenarios illustrate mechanics. They are not historical returns, a paper replication, or evidence of an executable edge. Research sources and their access limitations are recorded at the end of this module.

# Python 3.10+; standard library unless NumPy is imported below.
# Inputs and outputs use the units defined in this lesson. Synthetic teaching example.
def constant_value_price(price,old_supply,new_supply):
    if price<0 or min(old_supply,new_supply)<=0: raise ValueError("Positive supplies required")
    return price*old_supply/new_supply

print(constant_value_price(2,100_000_000,125_000_000))