What Is the Difference between TVL and Circulating Market Capitalization?
TVL (Total Value Locked) measures the value of assets deposited within a protocol, indicating the protocol's usage and security. Circulating Market Capitalization measures the total dollar value of all tokens currently available for trading, calculated as circulating supply multiplied by the current token price.
TVL is a measure of protocol health and adoption, while Market Cap is a measure of the token's current public valuation. They are independent but related metrics used for comprehensive analysis.
Glossar
Circulating Market Capitalization
Capitalization ⎊ The circulating market capitalization within cryptocurrency, options, and derivatives represents the total value of a cryptocurrency or asset currently available for trading, excluding tokens locked in smart contracts, vesting schedules, or held by the issuing entity.
Circulating Supply
Token ⎊ The circulating supply within cryptocurrency contexts represents the number of tokens currently available and actively traded on exchanges or held by investors, excluding those locked in smart contracts, staking agreements, or otherwise inaccessible.
Protocol Health
Resilience ⎊ Protocol Health, within the context of cryptocurrency, options trading, and financial derivatives, signifies the capacity of a decentralized system to maintain intended functionality despite adverse conditions or attacks.
Market Capitalization
Valuation ⎊ This metric represents the total notional value of all circulating units of a cryptocurrency, calculated by multiplying the current spot price by the total supply outstanding, serving as the primary measure of an asset's overall economic scale within the market.
Tvl
Value ⎊ The total aggregate worth of all assets deposited into a specific decentralized finance protocol, typically denominated in a stable unit for consistent measurement.