An <a href="/en/glossary/tokenomics/airdrop/" target="_blank">Airdrop</a> is a marketing and distribution method where a project sends tokens for free to wallet addresses that meet certain criteria. Common criteria include having used a protocol before, holding a certain coin, or having joined a testnet or community activity. For projects, airdrops quickly spread awareness, reward early users, and disperse tokens to more hands; for users, meeting the criteria may mean receiving tokens for free. But airdrops are also often used as marketing bait, and fake-airdrop scams are rampant, so be careful.

The number of tokens currently freely tradable on the market, excluding locked, staked, or officially held but unreleased amounts. Used to calculate market capitalization (market cap = <a href="/en/glossary/tokenomics/circulating-supply/" target="_blank">Circulating Supply</a> × price) — the most commonly used supply metric for assessing a <a href="https://claude-me.com/en/glossary/core-concepts/token/">Token</a>'s actual market size.

A DAO (Decentralized Autonomous Organization) is an organizational form using smart contracts to enforce rules and token holder voting as its decision-making mechanism. The core idea is replacing traditional management-decides models with code-enforces-rules and token-holders-vote on-chain democracy. DAO governance lets DeFi protocols operate without any centralized institution — every protocol parameter change, fund expenditure, or feature upgrade requires on-chain token holder voting. This solves trust problems but introduces new governance risks including low participation, token concentration, and malicious governance attacks.

Fully Diluted Valuation (FDV) is the total valuation of a project calculated at the current token price assuming all tokens — including those not yet in circulation, still locked, or not yet minted — have been released to the market. The calculation is: FDV = current token price × total token supply (max supply). By contrast, the market cap you usually see only counts tokens currently circulating. What FDV reveals is the project's potential maximum valuation — and the token dilution pressure hidden outside the <a href="/en/glossary/tokenomics/circulating-supply/">Circulating Supply</a> that will keep diluting existing holders over time.

Market cap (market capitalization) is the most commonly used metric for measuring a cryptocurrency's current market size, calculated as: market cap = <a href="/en/glossary/tokenomics/circulating-supply/">Circulating Supply</a> (tokens currently in free circulation) × current token price. It represents how much it would cost to buy all currently circulating tokens at today's price. Market cap differs from FDV (Fully Diluted Valuation): FDV uses the maximum total supply, while market cap only counts what's currently in circulation. Understanding this difference is foundational to evaluating crypto asset valuations.

The act of permanently removing a quantity of tokens from circulation (sending them to a black-hole address no one can use), aimed at reducing total supply. It's often used to create deflation and reward holders; in theory, with demand unchanged, less supply favors price — but the real effect depends on the burn's scale and genuine demand, not burn-it-and-it-must-rise.

A vesting schedule is a plan under which a project's tokens are not all simultaneously released at launch but gradually unlocked over a preset timeline. Its purpose is to constrain core team members, early investors, and other large holders from immediately dumping large amounts in the market — and to signal to the community that they're not just here to cash out and run. Understanding the vesting schedule structure is a necessary analytical dimension for assessing a token's medium-to-long-term selling pressure.

The veToken (Vote-Escrowed <a href="https://claude-me.com/en/glossary/core-concepts/token/">Token</a>) mechanism is a tokenomic design pioneered by Curve Finance: users lock tokens to receive non-circulating voting tokens (ve tokens), with longer lock periods yielding more ve tokens. ve token holders vote on how the protocol's liquidity incentives are distributed (gauge weights). This mechanism separates short-term speculators from long-term aligned holders: speculators are unwilling to lock up and lose liquidity, while long-term believers gain more protocol fee revenue and governance influence through locking. The veToken mechanism and Curve Wars (the battle for veCRV voting rights) became milestones in DeFi governance design.