What Is Total Value Locked (TVL) and Why Is It Important for DeFi Token Valuation? ▴ Learn

What Is Total Value Locked (TVL) and Why Is It Important for DeFi Token Valuation?

TVL is the total amount of assets currently staked or locked in a Decentralized Finance (DeFi) protocol. It serves as a key metric for measuring the protocol's adoption, health, and market share.

A higher TVL often indicates greater trust and utility, suggesting a higher potential for future fee generation, which can directly or indirectly flow to the protocol's native token. TVL is typically used in conjunction with the Market Cap to TVL ratio for comparative valuation.

Explain the Concept of ‘Total Value Locked’ (TVL) in DeFi

What Is the Significance of Total Value Locked (TVL) in Assessing DeFi Risk?

How Does the MV=PQ Model Differ from a Simple Comparison of Market Cap to Total Value Locked (TVL)?

How Can a Protocol’s Total Value Locked (TVL) Be Used as a Proxy for Financial Performance?