Total Value Locked (TVL)

The overall value of digital assets deposited or staked in a decentralized finance (DeFi) protocol. TVL is a form of fundamental value analysis for a particular DeFi protocol (or for DeFi overall) and has emerged as one of the most widely-used metrics for evaluating and comparing protocols. TVL is used to assess the levels of capital being used in a protocol, as well as its popularity and near-term viability. For comparison to another commonly-used financial metric for companies: The ratio of a protocol’s market capitalization (i.e., the total market value of all of a protocol’s tokens in circulation, measured at current market prices) to a protocol’s TVL is analogous to a traditional public company’s price/book ratio (i.e., the company’s market capitalization divided by the net book value of the company’s assets on its balance sheet).