Total Value Locked (TVL)

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Pronunciation

[toh-tl val-yoo lokt]

Analogy

TVL is like the total deposits in a bank—higher deposits suggest greater trust and activity.

Definition

The aggregate value of assets—measured in USD or tokens—deposited in a ’s smart contracts, indicating platform usage and liquidity depth.

Key Points Intro

TVL gauges platform health via:

Key Points

Locked assets: Sum of staked, lent, or pooled tokens.

Price conversion: Asset balances converted to a common unit (USD).

Protocol metric: Proxy for user trust, liquidity, and growth.

Comparative tool: Used to rank DeFi protocols by scale.

Example

A lending platform has 50 000 ETH and 2 million DAI locked; at ETH=$2 000, DAI=$1, TVL = 50 000×2 000 + 2 000 000 = $102 000 000.

Technical Deep Dive

Analytics scripts call `balanceOf` on all pool, , and vault contracts, fetch prices from oracles, then compute TVL = Σ balance_i × price_i. On‑chain subgraphs index deposit/withdraw events for real‑time TVL tracking.

Security Warning

TVL can be inflated by poorly secured assets or peg deviations; examine collateral quality and reliability.

Caveat

TVL does not measure revenue or profitability; high TVL with low may not be sustainable.

Related Terms

Blockchain & Cryptocurrency Glossary

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