Definition
Total Value Locked. The total value of crypto assets deposited in a DeFi protocol's smart contracts. TVL is a key metric for evaluating the size, adoption, and health of DeFi platforms.
Why It Matters
TVL shows how much real capital trusts a protocol. Higher TVL generally indicates greater user confidence, deeper liquidity, and lower slippage. It's the main metric for comparing DeFi platforms.
Example
If Aave's TVL is $10 billion, that means $10 billion in crypto assets have been deposited by users across all its lending pools worldwide.
Related Terms
DeFi
Liquidity Pool
Staking
Yield Farming