Even though it has flaws, the crypto industry has grown like never before, especially in decentralized finance (DeFi) and non-fungible tokens (NFTs). And, because the cryptosphere is constantly changing, savvy investors are always looking for indicators that can help them determine how profitable various crypto products are. Trading volume, market capitalization, and total value locked (TVL) are some of the indicators used to gauge the performance of the crypto market. TVL has become especially popular among DeFi investors when assessing the overall fiat value of assets deposited in a single project or across all DeFi protocols. But before we get into the significance of TVL in cryptocurrencies, let’s take a moment to discuss what it is. What Does Total Value Locked Mean? TVL is simply defined as the total value of digital assets locked or staked in the smart contract of a DeFi protocol. It is a measure of the total funds that can be transacted, lent, or borrowed through a particular DeFi platform. TVL also demonstrates to market observers and potential investors the level of interest, activity, and value currently present in the DeFi protocol. TVL is determined by taking the number of crypto tokens that have been staked in a particular DeFi project and multiplying that number by the token’s current dollar value. On platforms that allow investors to stake more than one cryptocurrency, the total value locked of each crypto is c...
