TVL (Total Value Locked)
The total amount of crypto deposited in a DeFi app. A common way to measure how popular and trusted a protocol is.
Example
Aave having $10 billion TVL means users have deposited $10 billion worth of crypto into its lending pools.
Advanced Concepts
⚙️How It Works
- 1
Users Deposit
People lock their crypto in a protocol's smart contracts
- 2
Value Calculated
All deposited assets are converted to USD value
- 3
Aggregated
Total across all pools and products is summed
- 4
Tracked
Sites like DefiLlama update TVL in real-time
📊Key Numbers
$80-100B
DeFi Total TVL
across all chains
$10-20B
Top Protocol
Lido, Aave level
Steady increase
Healthy Growth
vs sudden spikes
🔍Common Misconceptions
✗High TVL means safe
✓TVL measures popularity, not security. High TVL protocols have been hacked.
✗TVL counts real users
✓TVL counts value, not users. One whale could represent most of the TVL.
✗TVL is always accurate
✓Double-counting, fake deposits, and calculation methods can inflate TVL numbers.