What Is Total Value Locked (TVL)?
Total Value Locked (TVL) is a metric used to measure the amount of value locked into decentralized finance protocols. It is calculated by taking the total value of all assets held in DeFi protocols and dividing it by the total supply of those assets. TVL can be used as an indicator for how much capital has been invested in DeFi projects, and how popular they are among investors.
The Total Value Locked metric provides insight into which projects have attracted more investment than others, allowing users to make informed decisions about where to invest their money. Additionally, it helps developers understand user engagement with their project and identify areas that need improvement or further development. By tracking this data over time, developers can also gain insights on market trends and changes in investor sentiment towards different types of DeFi products.