TVL
TVL is the total value of crypto assets deposited in a DeFi protocol, app, or blockchain ecosystem.
TVL, or total value locked, measures the dollar value of crypto assets deposited in a DeFi protocol, decentralized app, or blockchain ecosystem. These assets may be supplied to lending markets, added to liquidity pools, staked in smart contracts, or used as collateral. Although the word “locked” is common, funds are not always permanently locked; in many protocols, users can withdraw them subject to the protocol’s rules, market conditions, or unstaking periods.
TVL matters because it is a simple way to estimate how much capital a protocol has attracted and how actively it may be used. Higher TVL can suggest deeper liquidity, larger lending markets, or stronger user confidence, but it does not prove a project is safe or profitable. TVL can rise or fall because users deposit or withdraw funds, or simply because token prices change. For example, if a decentralized exchange has $100 million in liquidity across its pools, its TVL is $100 million; if the tokens in those pools fall in price, TVL can drop even if no one withdraws.
Other terms in DeFi
AMM
An automated market maker is a DeFi protocol that uses liquidity pools and algorithms to price and swap crypto assets without a traditional order book.
Aggregator
A DeFi service that searches multiple protocols to find better prices, routes, or yields for a user’s transaction.
DEX
A decentralized exchange is a crypto marketplace where users trade directly from their wallets using smart contracts instead of a central intermediary.
DeFi
A blockchain-based financial ecosystem that lets people lend, borrow, trade, and earn yield without traditional banks or brokers.