Total Value Locked (TVL) is a metric that aggregates the market value of all assets deposited in a decentralised finance protocol or across an ecosystem at a given time. It serves as a proxy for adoption, liquidity depth and the economic weight of a protocol’s smart contracts. Because it is denominated in volatile assets, TVL can shift with both deposit flows and underlying price movements, so it is interpreted alongside other indicators.
Overview
- TVL sums the value of assets locked in lending pools, DEX liquidity, staking and vaults.
- It is widely used to rank protocols and gauge ecosystem health, despite its sensitivity to price swings.
- Double-counting and reflexive token valuations are common pitfalls in naive TVL figures.
Key aspects
- Aggregation across pools, vaults and staking contracts.
- Denomination effects from volatile underlying assets.
- Risk of double-counting rehypothecated or wrapped assets.
- Use as a comparative and trend indicator rather than an absolute valuation.
Applications
- Protocol analytics dashboards and league tables.
- Liquidity and risk assessment for DeFi participants.
- Ecosystem growth tracking and capital-flow analysis.