How Does a Protocol's Total Value Locked (TVL) Relate to Its Sink Utility? ⎊ Path

How Does a Protocol’s Total Value Locked (TVL) Relate to Its Sink Utility?

A protocol's TVL is a direct measure of the capital that has been sunk (locked) into the protocol, which is often a function of its sink utility. High sink utility, such as the requirement to lock the native token for core services, leads to a higher TVL.

Therefore, TVL serves as a key indicator of the effectiveness of the protocol's sink mechanisms and its resulting demand for the native token.

How Does a Protocol’s Total Value Locked (TVL) Relate to Its Projected Cash Flows?

What Is “Total Value Locked” (TVL) in the Context of a DeFi Protocol?

What Is “Total Value Locked” (TVL) in DeFi?

How Does “Protocol Sink” Utility Contribute to Token Demand?

How Is the Concept of “Total Value Locked” (TVL) Used as a Valuation Metric?

How Does the Concept of “Capital Efficiency” Relate to Both TVL and the MV=PQ Model?

What Is the Concept of a “Protocol Sink” for Governance Tokens?

How Does Token Standardization Influence the Calculation of Total Value Locked (TVL)?