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Total Value Locked (TVL) Meaning

Total Value Locked (TVL) measures the total value of assets deposited within a decentralized finance (DeFi) protocol or ecosystem. It reflects capital committed to activities such as lending, staking, liquidity provision, or yield farming.

TVL is widely used as a proxy for protocol adoption, liquidity depth, and user trust. Rising TVL may indicate growing usage, while sharp declines can signal capital flight or risk events.

For professional investors, TVL must be contextualized alongside asset prices, incentive programs, and capital efficiency to avoid overstating protocol health.

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