How Does Total Value Locked (TVL) Serve as a Metric for the Success or Vulnerability of a DeFi Protocol? ▴ Learn

How Does Total Value Locked (TVL) Serve as a Metric for the Success or Vulnerability of a DeFi Protocol?

TVL, the total value of assets deposited in a protocol, measures its adoption and success by quantifying the capital it has attracted. High TVL indicates user trust and deep liquidity, which is beneficial.

However, it also highlights vulnerability; a very high TVL makes a protocol a more attractive target for hackers, as a successful exploit would yield a massive financial return.

What Is the Significance of the ‘Transaction Value’ Metric versus the ‘Transaction Count’ Metric?

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

In Which Specific DeFi Sub-Sectors Is TVL Considered a More Relevant Metric?

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