Protocols & Platforms
TVL
Total Value Locked
Total amount of assets deposited and locked in DeFi protocols
Definition
Total Value Locked (TVL) measures the total amount of assets deposited and locked in a DeFi protocol or across the entire DeFi ecosystem. It's a key metric for assessing protocol adoption and security.
Example
If Uniswap has $5 billion TVL, it means $5 billion worth of crypto assets are currently locked in Uniswap's liquidity pools.
What to check
Treat it as infrastructure: understand what it automates, what trust assumptions remain, and how failures propagate. The main checks are: TVL manipulation; Capital flight; Protocol risk concentration.
Risks to Consider
- TVL manipulation
- Capital flight
- Protocol risk concentration
Common Questions
What does TVL mean in DeFi?
TVL means Total amount of assets deposited and locked in DeFi protocols. The useful question is not only the definition, but how the mechanism changes risk, return, liquidity, or governance for the user.
How is TVL used in practice?
A practical example: If Uniswap has $5 billion TVL, it means $5 billion worth of crypto assets are currently locked in Uniswap's liquidity pools.
What should I check before relying on TVL?
Check tvl manipulation, capital flight, protocol risk concentration. Also verify liquidity, oracle assumptions, admin controls, and whether the protocol has been tested during stressed markets.
