Today I want to share some important concepts that many people still misunderstand, such as circulating supply, maximum supply, total supply, and other related figures. If you often look at cryptocurrencies and wonder what these terms mean, this article is for you.

First, let's clarify the three main concepts:

Maximum supply is the highest number that a cryptocurrency can ever reach at any point in time. Total supply is the total amount of coins currently in existence within the system. And what is circulating supply? It is the number of coins that are being distributed and used in the market right now.

For example, with Solana (SOL): the current circulating supply is about 573 million units, while the total supply is 620 million. This means there are approximately 47 million SOL not yet in circulation. These coins may be locked for the team, reserves, or other incentive programs. As for Solana's maximum supply, it has no specific limit, meaning it can increase over time based on its inflation mechanism.

Why is this important? Because if you don't understand these details, you might be misled about the real value of a coin. When locked coins are suddenly unlocked and put into circulation, it can significantly impact the price. Therefore, it's crucial to analyze what these uncirculated supplies are reserved for and when they will be released.

Now, let's talk about market capitalization. Market cap is calculated by multiplying the current price by the circulating supply. For SOL, the market cap is approximately $47 billion (572 million x $82). The fully diluted market cap is the price multiplied by the total supply, about $51 billion (620 million x $82). The difference indicates the potential for price decrease if the entire supply is issued.

Analytical tip: When researching a coin, check what the circulating supply is, how much is yet to be issued, and the project's issuance plan. If the project has no limit on maximum supply, look into its inflation rate and how much it is expected to increase in the coming years. This information will help you assess investment risks more accurately.

In summary, understanding what circulating supply is and related concepts will help you make smarter investment decisions. These are fundamental but essential knowledge for anyone looking to participate in the cryptocurrency world.