Outstanding Token Value (OTV) is a metric used to evaluate cryptocurrency that looks at the total worth of tokens set aside for specific uses, leaving out any idle or unallocated supply.
This gives a more accurate picture of a project’s economic value compared to Fully Diluted Valuation (FDV) since it only considers tokens that have specific purposes.
Learn more about Outstanding Token Value
When looking at cryptocurrency projects, investors frequently find it challenging to understand the difference between the current Market Cap and the Fully Diluted Valuation (FDV). Market Cap only takes into account the tokens that are currently available, while FDV assumes that all tokens will be released at some point. Unfortunately, neither of these metrics truly captures the economic reality of many projects.
This is where OTV comes into play. CoinGecko introduced OTV as a solution that strikes a balance by reflecting the actual intended value of a cryptocurrency project, focusing solely on tokens that have been designated for specific uses.
How to Calculate Outstanding Token Value
The calculation for Outstanding Token Value is straightforward:
OTV = Token Price x Outstanding SupplyThe accuracy of OTV depends on the definition of Outstanding Supply:
Outstanding Supply = Total Supply – (Unplanned, Unallocated, and Unissued Tokens)Conclusion
Outstanding Token Value is a new way to look at cryptocurrency valuation metrics. It zeroes in on tokens that have specific purposes and leaves out any idle supply, giving investors a more accurate picture of a project’s economic worth compared to just using FDV.
Unlike FDV, which takes into account all potential tokens, and Market Cap, which only looks at the tokens that are currently circulating, OTV finds a middle ground by factoring in planned allocations. This makes it especially handy for comparing projects that have different token distribution methods and for grasping the real economic scale of cryptocurrency projects.
Like any metric, OTV should be part of a larger analysis and not the only thing you rely on for decisions. When combined with fundamental analysis, market conditions, and other on-chain metrics, OTV can help investors make smarter choices in the crypto market.