
The market cap describes the potential value of a token. The value of market cap
is the result of the circulating supply multiplied by the latest trading price.

```
Market Cap = Circulating Supply * Last Trading Price
```

The Market Cap is usually calculated in dollars. That means that the last
trading price should be converted to dollars. The paired value is usually a
token that is not locked with the dollar value. For instance, in the Binance
Smart Chain, the trading tokens are usually paired with the BNB. So, the amount
of the last trade price of the paired tokens should be converted to dollars.

```
Last Trading Price = (Paired Tokens Transformed / Tokens Transformed) * Price of Paired Token in Dollars
```

## Market Cap Calculation Example

Let's calculate the market cap value of Cake. We assume that the state in the
latest transaction is:

- Cake total supply 379,701,715
- Cake burned tokens 180,317,835
- 10 Cake received
- 1 BNB given
- 1 BNB = 300 USD

The Circulating supply of Cake is

```
379,701,715 - 180,317,835 = 199,383,880 Circulating Supply
```

The Last trading price is

```
(1 / 10) * 300 = 30 USD
```

So the market cap is

```
30 * 199,383,880 = 5,981,516,400 market Cap
```

That means that even if the latest trading value does not change, the market cap
may be increased or decreased. So, when we see the market cap of a token, we
should keep in mind that the value may be affected from the paired token.
Following our Binance Smart Chain example, if the BNB value decreased, then the
market cap of the token will be decreased even if there are not transactions.


The investigate the way that the market capitalization is calculated in the crypto world. We use a real world example from the last trading price of the $Cake.

What is the market cap value in cryptos


Smart Contracts have unlocked unlimited possibilities. The most important
feature is the ability to execute a script that decides what to do on every
transaction.

Tokenomics describes the way that the total supply of the token is distributed
to the addresses. Initially, when the smart contract is created, the tokens are
moved to the issuer's wallet. Then, the issuer decides how the tokens will be
distributed.

## How tokens are burned

A quite frequent process is burning tokens. The process of burning the tokens is
by moving them in the dead addresses. The dead addresses are not accessible by
any user or application. That means that when the tokens are moved there no one
can access them or send them back to an active address. Once the tokens are
moved there, they are assumed as dead.

The dead addresses are usually:

- `0x0000000000000000000000000000000000000000`
- `0x0000000000000000000000000000000000000001`
- `0x000000000000000000000000000000000000dead`

## What is the Circulating Supply

The total supply of the token minus the burned amount equals the circulating
supply. Essentially, the circulating supply describes the number of tokens that
are accessible from the blockchain and are applicable to be transferred.

```
Circulating Supply = Total Supply - Burned Amount
```

## Track the Burned and Circulating Supply

![Burn and Circulating indicator](burn-circulating-indicator.jpeg)

The coin page of the Coinscope, depicts the burned amount and the circulating
supply. It automatically detects all the transfers to the dead addresses. This
feature eases the investor to track the coins without investigating the
transactions from the blockchain tracker.


Smart Contracts have unlocked unlimited possibilities. Questions like how tokens are burned and what is the circulating supply are essentials to understand how the tokenomics are working.

Terminology

What is the market cap value in cryptos

Tokenomics, Circulating Supply and Burned tokens