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How Does the Total Value Locked (TVL) in DeFi DApps Measure Network Effect?

TVL is a quantitative measure of capital and trust, showing the financial commitment and utility of the network.
Greeks.Live05.11.25

How Does the Total Value Locked (TVL) in DeFi DApps Measure Network Effect?

TVL is the aggregate value of all crypto assets deposited in a DeFi protocol's smart contracts. It is a direct quantitative measure of the trust and utility a network commands.

High TVL indicates a strong network effect, showing that users are confident in the protocol's security and find its financial services valuable. TVL is a proxy for the capital and liquidity drawn into the ecosystem.

What Is “Total Value Locked” (TVL) in the Context of a DeFi Protocol?
What Is the Significance of Total Value Locked (TVL) in Assessing DeFi Risk?
What Is the Role of DApps in Strengthening a Blockchain’s Network Effect?
How Do Dapps Differ from Traditional Centralized Financial Applications (CeFi)?

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