Total value locked (TVL)

Total value locked (TVL) is the combined value of all crypto deposited in a DeFi protocol or blockchain's smart contracts, including liquidity pools, lending markets and staking contracts. It is the most widely quoted measure of how much a DeFi project is being used. Sites such as DefiLlama track TVL across thousands of protocols.

TVL is useful but easily misread. Because it is measured in dollars, it rises and falls with token prices even if no one deposits or withdraws. The same assets can be counted more than once when they are deposited, borrowed and redeposited across protocols. And projects can attract temporary TVL by paying high rewards that disappear when incentives end.

When comparing protocols, look at TVL alongside actual fees and revenue, trading volume, the number of active users and how concentrated deposits are. A high TVL also makes a protocol a more attractive target for hackers, so it is not a measure of safety.