Market Cap vs Realized Cap


Description

Realized Capitalization (Cap) is the value of each UTXO based on the price it was last moved.


Use Cases

The Realized Cap can be used as an alternative to Market Cap, where the realized cap is the price of all UTXOs at the last time they moved while the market cap is the price of all UTXOs at the current price. Realized cap can also represent the value of all coins in the network, and can serve as an aggregate cost basis for the network.

Given the methodology to calculate this metric, older UTXO have a significant weight on the realized cap given their age and the lower price at which they last moved. When older tokens move, the lower price of those tokens is then re-valued at the new price and can create a large shift in realized cap.

When Realized Cap > Market Cap, the network is out of profit and is in an aggregate loss. When Realized Cap < Market Cap, the network is in profit and is in an aggregate profit.


Methodology

Market Cap = supply * price

Realized Price = Amount * Price at Time Created