Total Value Locked (TLV) can represent the total value of assets that have been deposited into an ecosystem, a project, or simply to a smart contract.

TVL is an important concept in DeFi, as it provides insight into the popularity and adoption of a particular DeFi protocol or application.

TVL is typically calculated by taking the total value of all assets that are being held or managed by a DeFi protocol or application and dividing it by the total supply of the protocol’s native token. This produces a value that represents the proportion of the total supply of the token that is currently being used or held by the protocol or application.

A high TVL can indicate that the protocol or application is well-regarded and widely used, which can be a positive sign for potential investors. Conversely, a low TVL can indicate that the protocol or application is not as popular or widely used, which may be a red flag for investors.

« Back to Glossary Index