How to use
- Set the annual transaction volume (PQ) and token velocity (V). PQ is a single flow — use either gross transaction value (GTV) or on-chain fee revenue, but not both; keep the definition consistent across the whole model.
- Specify total token supply (in millions of tokens — the formula in the card uses tokens, the slider shows millions) and the percentage locked (staking, vesting).
- The cards show the fundamental market cap (pinned by PQ/V), the implied free-float market cap (scarcity-inflated, collapses on unlock), prices before and after the free-float adjustment, and the mechanical scarcity premium.
- The chart shows how the fundamental price (PQ/V·S) and the free-float-adjusted price depend on velocity — higher V means lower fundamental price.
Scarcity premium is not fundamental appreciation
Under Fisher’s identity MV = PQ, fundamental market cap is pinned at PQ/V. Locking does not create new fundamental value — it redistributes the same transaction demand across a smaller free float. The resulting per-token uplift (e.g. +43% at Locked = 30%) is a temporary scarcity premium on the tradable portion. The moment locked tokens unlock and hit the market, the premium collapses. Do not use this mechanism as a pricing strategy.Edge behavior of V
- V → 0 (infinite retention): any positive PQ pins Mcap at infinity — a pure store of value does not fit Fisher’s identity.
- V → ∞ (tokens turn over constantly): Mcap → 0 — no one is willing to hold the token.
- Slider is capped at V = 1 and V = 100 to keep the model in the well-defined region.
The parent article also includes a burn term (1 − B)^t in the full price formula. This calculator is focused on locking; see the parent article for burn dynamics.
Calculator
Fundamental Token Price Calculator
Fundamental Mcap (PQ/V)
$2.5M
Implied free-float Mcap
$3.6M
Fundamental price
$0.025
Free-float price
$0.036
Scarcity premium
+43%
Fundamental price (PQ / V·S)
Free-float price (scarcity-adjusted)
Locking does not change V. It divides the same PQ/V market cap across a smaller tradable float.
Formulas
Mcap = PQ / V
- PQ — annual transaction flow in the network, $/year. Use either gross transaction value (GTV) or on-chain fee revenue — pick one definition and keep it consistent; do not mix. Different choices yield very different Mcaps (e.g. Ethereum GTV is in the trillions/year, fees are in the low billions).
- V — token velocity, turns/year (how many times the average token changes hands in a year)
- Mcap — fundamental market capitalization, $ (computed). Pinned by Fisher’s identity — locking does not change it.
Free-float price = Mcap / (Supply × (1 - Locked_%))
- Mcap — fundamental market capitalization, $ (from the formula above)
- Supply — total token supply, in tokens (not millions — the slider displays millions, but the formula operates on raw token units; convert before plugging into a spreadsheet)
- Locked_% — share of locked tokens, as a fraction 0..1 (i.e. 30% → 0.3)
- Free-float price — per-token price of the tradable portion, $ (computed). This is the price on the open market when a share Locked_% of supply is off the market. It is higher than the fundamental price PQ/(V·S) purely because fewer tokens are tradable — not because the network is worth more.
Scarcity premium = 1 / (1 - Locked_%) - 1
- Locked_% — share of locked tokens, as a fraction 0..1
- Scarcity premium — mechanical per-token price uplift from the free-float being smaller (computed). E.g. at Locked_% = 0.3 the premium is ~43%. This is not fundamental appreciation: when locked tokens unlock and hit the market, the premium collapses.