Market DataIntermediate

What is total value locked in DeFi?

Total value locked (TVL) is the dollar value of crypto assets deposited in DeFi smart contracts. It sums each token's amount times its current price.

Vahe HakobyanEditor-in-chief Updated Oct 6, 20263 min readFact-checked

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How is DeFi TVL calculated?How should you read TVL changes?What does TVL not tell you?Where can you check TVL data?FAQ

Key takeaways

TVL sums each locked token's amount times its current price.
A rise can come from deposits, price, or both.
The same asset can count in more than one protocol.
TVL does not show users, revenue, or safety.
Aggregators show TVL by chain and protocol.

Total value locked (TVL) is the dollar value of crypto assets deposited in DeFi smart contracts. It measures the value locked in these protocols. DeFi protocols put financial services on blockchains, and they cut out banks and brokers. A smart contract is code on a blockchain that carries out an agreement on its own.

How is DeFi TVL calculated?

To calculate TVL, multiply each locked token's amount by its current price in dollars. Then add those values together. Do this for every token in the protocol.

How should you read TVL changes?

A rising TVL can mean new deposits, higher token prices, or both. A falling TVL can mean withdrawals, lower prices, or both. The number alone does not tell you which cause is at work. The same asset can be counted in multiple protocols as it moves.

What a TVL change can mean
If TVL rises	If TVL falls
New deposits	Withdrawals
Higher token prices	Lower token prices
Both can push it up	Both can pull it down

What does TVL not tell you?

A high TVL can come from a few large deposits. It says nothing about the health of the protocol or its code.

It does not show active users.
It does not show protocol revenue.
It does not show smart contract safety.

Where can you check TVL data?

Aggregators show TVL by chain and protocol. They collect data from many protocols in one place. In September 2020, DeFi collateral levels had reached $9 billion, an early snapshot of the measure.

Where to see TVL data
Aggregators	Protocol dashboards
Many chains and protocols	One protocol's figures
Their own price sources	The protocol's prices
Comparisons	Single projects

Frequently asked questions

No. A higher TVL can simply reflect higher token prices, and it does not measure safety or revenue.

TVL usually counts deposited assets, including borrowed and staked ones. Bridged assets may be counted where they are deposited, and the same asset can be counted more than once.

TVL figures usually update continuously or at set intervals. The frequency depends on the aggregator and the blockchain.

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Written byVahe HakobyanVahe Hakobyan is the editor-in-chief of World-Crypt. He covers bitcoin, markets and regulation, and leads the newsroom that fact-checks every story before it goes live.