How Can a Protocol Artificially Inflate Its TVL without a Corresponding Increase in Utility?

A protocol can artificially inflate its TVL primarily through excessive, short-term liquidity mining rewards, which attract "mercenary capital" that leaves as soon as the rewards decline. Another method is through circular lending/borrowing schemes where the same capital is recursively locked and counted multiple times.

While these methods temporarily boost the TVL number, they do not represent genuine, sticky user adoption or sustained demand for the protocol's core utility.