DeFi TVL Measures Asset Values, Not Net Deposits or Trading Activity
Photo: TokenPost
Total value locked (TVL) gives crypto investors a dollar estimate of assets counted in decentralized finance contracts, but it does not by itself show whether users made net deposits or withdrawals. The figure also does not measure trading activity or protocol revenue. TVL combines eligible token amounts with their dollar prices. A shorthand is TVL = Σ (eligible token units × dollar price per token). Which assets qualify, and how they are priced, depend on the methodology behind a figure.
Source: TokenPost
