TVL (Total Value Locked)
Definition
Total Value Locked (TVL) measures the total amount of cryptocurrency deposited in a DeFi protocol. It is one of the most important metrics for evaluating DeFi projects, indicating user trust and protocol adoption. Higher TVL generally suggests more liquidity and stability. TVL can be measured per protocol (e.g., Aave has $10B TVL) or per blockchain (e.g., Ethereum DeFi TVL). TVL should be analyzed alongside other metrics as it can be inflated through recursive borrowing.
Why Does This Matter?
Understanding TVL (Total Value Locked) is essential for anyone investing in cryptocurrencies or working with blockchain technology. This concept directly influences how projects are valued, how markets behave, and what risks and opportunities exist for investors.
How Does CryptoValue Use This?
At CryptoValue, fundamental concepts like TVL (Total Value Locked) feed into our proprietary Value Score — a rating from 0 to 100 based on 10 on-chain and market metrics. Our goal is to help you identify undervalued and overvalued coins, rather than just looking at price.