Тotal value locked represents the number of assets that are currently being staked in a specific protocol.
TVL calculation involves adding up the total market value of all cryptoassets locked in a protocol's smart contracts at current market prices. For example, if a DeFi lending platform has 10,000 ETH (worth $2,000 each) and 5 million USDC locked in its contracts, its TVL would be $25 million ($20 million from ETH plus $5 million from USDC).
The formula is relatively simple: TVL = Sum of (Number of Tokens Locked × Current Price Per Token)
It's important to note that TVL fluctuates daily based on:
New deposits or withdrawals from users
Price changes in the underlying assets
Changes in rewards or incentive structures
TVL has become one of the most watched metrics in DeFi for several reasons:
Higher TVL generally signals stronger user confidence in a protocol. When users commit significant capital to a platform, it suggests they trust its security, functionality, and potential returns.
TVL directly correlates with a protocol's liquidity. Higher liquidity means users can execute larger trades with minimal price slippage and access capital more efficiently.
Rising TVL typically indicates a growing user base and increasing platform adoption. Investors often track TVL trends to identify promising projects with expanding market share.
TVL enables direct comparisons between different protocols and blockchains. Investors can use TVL to determine which platforms are capturing the most market share in specific DeFi categories.
Generally, protocols with higher TVL are considered more battle-tested and secure, as they've successfully protected larger pools of assets. However, this correlation isn't perfect, as even high-TVL protocols can contain vulnerabilities.
While both metrics are valuable for assessing crypto projects, they measure different aspects:
TVL represents the total value of assets locked within a protocol's smart contracts, indicating actual capital utilization and user engagement.
A healthy project typically maintains a reasonable ratio between these metrics. If a token's market cap significantly exceeds its protocol's TVL, it might be overvalued. Conversely, if TVL vastly exceeds market cap, the token might be undervalued relative to the capital it's securing.
Several key factors drive changes in Total Value Locked:
Higher yields from staking, lending, or liquidity provision attract more assets, increasing TVL. Projects often boost rewards temporarily to attract liquidity.
New features, improved user experience, or innovative mechanisms can dramatically increase a protocol's TVL by attracting users from competing platforms.
Security incidents and exploits typically lead to immediate TVL drops as users withdraw funds. Conversely, protocols with strong security track records tend to accumulate TVL over time.
Many protocols distribute tokens to users who lock assets, creating additional incentives beyond base yields. Changes to these incentive structures directly impact TVL.
While TVL is valuable, it has several important limitations:
Because TVL is denominated in USD, significant price movements in underlying assets can dramatically change TVL figures without any actual change in user behavior or deposits.
Assets can be counted multiple times in TVL calculations. For example, a stablecoin might be counted once when deposited into a lending protocol and again when the lending receipt token is used in a yield farm.
TVL doesn't differentiate between types of locked assets. A protocol with $1 billion in Bitcoin and Ethereum has fundamentally different risk characteristics than one with $1 billion in newly created tokens.
Different protocol types naturally have different TVL potential. Comparing TVL across different categories (e.g., DEXs vs. lending platforms) without context can be misleading.
To get the most value from TVL metrics:
Track trends over time rather than focusing on absolute numbers
Compare similar protocols within the same category
Consider TVL in context with other metrics like daily active users, trading volume, and revenue
Look at TVL distribution across chains to understand where capital is flowing
Analyze TVL:market cap ratios to identify potentially under or overvalued projects
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