What Is TVL (Total Value Locked) in Crypto?

This crypto guide will go over the concept of TVL in crypto. TVL, or total value locked in crypto, is a metric of stored funds, usually on a decentralized ￰0￱ crypto TVL is a proxy for overall protocol activity, its reputation, and the presence of whales or other large-stage ￰1￱ Definition and Meaning What TVL Represents in DeFi TVL is a metric in decentralized finance (DeFi), which represents the total value of all coins, tokens, stablecoins, wrapped tokens and even NFTs locked in a smart contracts of a specific ￰2￱ assets are locked for different functions, meaning they cannot be moved unless certain financial conditions are ￰3￱ TVL in DeFi serves for lending, staking, and liquidity ￰4￱ TVL Became a Key Metric for Protocols TVL in crypto became a key metric after DeFi protocols more or less started unifying their business ￰5￱ TVL metric helps contrast and compare the varying DeFi protocols and their ￰6￱ vs Market Cap – Key Differences TVL differs from a protocol’s market ￰7￱ market cap reflects the notional value of a protocol’s ￰8￱ contrast, TVL measures the total value of assets deposited to the protocol, based on their current ￰9￱ Is TVL Calculated?

TVL in crypto is calculated based on the market value of all assets locked in a protocol’s smart ￰10￱ asset value is usually supplied by oracle services, which may differ for each crypto DeFi ￰11￱ represents the total value of assets locked across all blockchains where the protocol has been deployed. Multi-chain protocols calculate the value of assets on each ￰12￱ Assets Across Protocols Protocols hold assets in DeFi smart contracts, for various ￰13￱ may be locked into liquidity vault contracts, lending contracts, decentralized trading pairs, liquid staking contracts, or other types of smart contracts. Protocols, also known as crypto dApps , then enact permissionless operations, such as trading, lending, granting passive yield or other ￰14￱ Impact on TVL (Fluctuations with ETH/BTC Value) The TVL metric is one of the key gauges for investors to determine the strength of a ￰15￱ TVL in DeFi depends on the market value of ￰16￱ ETH and BTC are often fluctuating, TVL may rise rapidly during bull markets and shrink during bear markets.

Stablecoins, when included in TVL calculations, make for a more reliable ￰17￱ in USD vs Native Tokens TVL in DeFi apps measures the value of tokens, native chain assets like Ethereum and Solana , as well as ￰18￱ TVL is usually measured in US dollars, especially when the assets locked are stablecoins. Sometimes, the total value locked is measured in terms of the amount of native tokens locked, providing a glimpse of the percentage of the total supply deposited into the ￰19￱ the dollar value, which naturally fluctuates, the amount of native tokens is a constant and can give a realistic metric of ￰20￱ Across Chains (Ethereum, BSC, Solana, Avalanche, Arbitrum, etc.) The total value locked (TVL) across entire chains is the sum of the value locked in each DeFi ￰21￱ value across chains gives a glimpse on what share of the native coins or tokens are locked, staked or fueling other ￰22￱ TVL Matters in DeFi Indicator of Protocol Adoption and Liquidity DeFi TVL is an indicator of the readiness of users to lock their ￰23￱ metric is a proxy for protocol adoption, especially when data shows relatively small individual deposits, instead of institutional liquidity flowing ￰24￱ is also an important metric for the available liquidity in ￰25￱ instance, a decentralized exchange (DEX) with a higher TVL suggests deeper liquidity pools and lower risk for some trading ￰26￱ for User Trust and Security A protocol or DeFi app with higher TVL is also a metric of security and trust.

A trend of long-term inflows, no significant setbacks in liquidity, may signal a reliable dApp that has become key to DeFi ￰27￱ time, TVL grows for the most successful protocols, both in dollar value, and in the number of tokens deposited. A higher TVL also means users are willing to lock their tokens and tap their value through lending, rather than sell on the open ￰28￱ in Yield Farming and Lending Protocols Yield farming is one of the most common decentralized activities, which contains a dose of ￰29￱ yield farming, users lock in their assets with a protocol, thus securing the main source of ￰30￱ an exchange, they receive rewards in the form of a share of the fees, or another valuable ￰31￱ is one of the key metrics in yield farming, which offers a general glimpse of the protocol’s adoption, user trust, and growth ￰32￱ protocols also reveal their locked value to attract more ￰33￱ lending, locked value includes the collateral posted on ￰34￱ TVL also includes the usual requirement for over-collateralization, to counteract volatile crypto ￰35￱ of TVL as a Metric TVL is widely used, but remains an imperfect ￰36￱ final figure often conceals how liquidity is structured, fails to show what portion of TVL comes from whales, and does not distinguish between organic and synthetic ￰37￱ will discuss the limitations of TVL as a crypto metric ￰38￱ Doesn’t Equal Revenue or Profitability TVL is not connected to the protocol’s revenues or ￰39￱ metric does not automatically translate into economic liveliness.

Additionally, some protocols with immense staking or locking requirements in fact have very limited economic ￰40￱ to Price Volatility TVL may reflect the price volatility of underlying ￰41￱ instance, ETH value locked has lost up to 50% of its value, though the amount of tokens locked remained the ￰42￱ nominal locked value may fluctuate significantly in the short ￰43￱ TVL Manipulation Through Incentives or Wash Lending A protocol or DeFi app with high or growing TVL is not necessarily ￰44￱ are many reasons for non-organic TVL ￰45￱ simplest one is incentives, such as point ￰46￱ or protocols will issue points for users that lock in and hold liquidity, later swapping the points into a token ￰47￱ initial locked value may quickly dissipate once the incentive is ￰48￱ other reason is wash lending, which uses the initial deposit to mint stablecoins , then buy more of the underlying asset and deposit ￰49￱ the case of a market downturn, the protocol may go through liquidations and lose value.

Short-Term vs Long-Term Sustainability TVL in DeFi protocols can vary over time, depending on each protocol’s ￰50￱ platforms discourage withdrawals, or place limits or long cooldown ￰51￱ allow users to freely lock or remove ￰52￱ instance, during peak token trading-activity, liquidity on DEXs may increase, as there is more demand for ￰53￱ liquidity may be taken away if trading slows down, as some of the liquidity providers are large-scale entities, teams, or market ￰54￱ in Popular DeFi Protocols (2025) MakerDAO Maker DAO, rebranded to Sky Protocol, uses self-reported ￰55￱ of October 2025, the value was over $16B. The total value locked in the protocol includes the value of USDS and SKY tokens locked for passive ￰56￱ Aave is the leading lending protocol, accepting multiple assets as ￰57￱ value locked in Aave is based on the aggregated price of all assets ￰58￱ of October 2025, the protocol holds upward of $43B.

The TVL on Aave is higher than the aggregate value of loans, since all lending is ￰59￱ total value locked of Aave calculates the value in all vaults, on all chains where the protocol is ￰60￱ Uniswap is also a multi-chain protocol, where the TVL is calculated based on the sum total of liquidity trading ￰61￱ total value locked of Uniswap takes into account the value of all assets in each ￰62￱ TVL counts the number of tokens multiplied by the market price of the token, calculating for both assets in each liquidity ￰63￱ carries $5.63B in total value locked as of October ￰64￱ Finance Curve Finance also operates as a DEX, so its TVL is calculated as the sum of the prices of all assets in trading pairs, similar to the calculation for ￰65￱ Finance carries $2.32B in liquidity, a lower level compared to its peak performance during the 2021 bull ￰66￱ (Staked ETH TVL Example) Lido is the leading liquid staking protocol on ￰67￱ TVL is calculated based on the value of ETH in its smart ￰68￱ requires ETH staking, so its smart contracts have a function to always report the amount of staked ￰69￱ a more intuitive value, the locked ETH is represented in US ￰70￱ has $35.56B locked as of October ￰71￱ to Track TVL DeFiLlama DeFiLlama is one of the easily accessible free tools to track ￰72￱ counts most tokens locked in a smart contract as ￰73￱ protocol does not double-count the tokens, and does not include liquid staking tokens in TVL for ￰74￱ metrics of DeFiLlama may differ from self-reported ￰75￱ does not measure native staking and excludes some liquid staking tokens from ￰76￱ DappRadar tracks the activity and user count of apps, similarly tracking all assets from known smart ￰77￱ also uses the Adjusted Value Locked metric, freezing the price of tokens for a specific ￰78￱ often uses the value of tokens at the start of a 90-day period, and the value may differ significantly due to market price ￰79￱ (historical influence) DeFi Pulse focuses on the Ethereum ecosystem, accounting for the amount of tokens and their market ￰80￱ platform uses open-source on-chain data for the Ethereum chain, and evaluates all prices in US ￰81￱ Future of TVL as a DeFi Metric Beyond TVL – Revenue, Active Users, Protocol Fees TVL has received criticism for disguising the real activity of ￰82￱ evaluate DeFi apps, mode metrics are needed in combination with ￰83￱ is one measure reflecting real on-chain actions, incurring regular ￰84￱ protocol fees for a period of time also give a glimpse on real demand and ￰85￱ TVL must also be matched with active users, to make sure a protocol is not controlled by only a handful of ￰86￱ in Real-World Assets (RWAs) Recently, the crypto space started tracking tokenized real-world assets (RWAs).

At the end of September 2025, those assets broke above $30B in value ￰87￱ total value locked of tokenized assets is based on the calculation of the token ￰88￱ sum of all tokens reflects the market value of underlying assets: treasuries, private credit, precious metals, stocks, or other ￰89￱ Across Layer 2 and Multi-Chain Ecosystems With the expansion of decentralized apps (dApps), the calculation of TVL becomes more ￰90￱ methodologies track TVL to include or exclude bridges. However, the basic calculation remains similar for swapping, lending, or ￰91￱ 2 (L2) chains pose a specific challenge in accounting for bridged or wrapped ￰92￱ mistake to be made is to double-count the tokens as part of the Ethereum ecosystem, although they are active on another ￰93￱ challenge is to measure real liquidity that is accrued and used, instead of passive staking.