TVL (Total Value Locked)
TVL measures the total value of crypto assets deposited in a DeFi protocol or blockchain. It's expressed in USD and tracks how much capital the protocol has attracted.
Understanding the Concept
TVL is the standard metric for measuring DeFi protocol size and growth. Higher TVL means more liquidity, better price execution, and generally more trust. But TVL can be gamed—double-counted deposits, incentivized deposits with unsustainable yields, or just whale capital chasing temporary APY. Watch the trend: growing TVL suggests organic adoption; falling TVL suggests capital flight. Compare TVL to market cap (TVL/MC ratio) for valuation. Protocols with high TVL relative to market cap might be undervalued. Track TVL on DefiLlama.
Real-World Example
Aave has $10B TVL—that's $10 billion deposited by users for lending and borrowing. When comparing to Compound's $2B TVL, Aave is clearly dominant. Before using a protocol, check its TVL for an indicator of trust and liquidity.
How Strykr Helps
Strykr tracks TVL developments across the crypto ecosystem. Our AI provides real-time insights and alerts to help you navigate the market with confidence.
Try Strykr Free