Total Value LockedTVL
Total value locked is the market value of the crypto assets deposited in a DeFi protocol or blockchain. It is a rough gauge of usage, but it rises and falls with token prices and can double-count assets used in several protocols.
Total value locked, or TVL, is the dollar value of crypto deposited in a DeFi protocol or chain. It is the most quoted size measure in DeFi, but it moves with token prices and can be counted in different ways. Traders use it to compare protocols and to spot capital flowing in or out.
- Category
- Cryptocurrency and Blockchain
- Reading time
- 4 min
- Also called
- TVL, Value locked in DeFi, Locked value
- Updated
TVL in plain words
TVL adds up the value of all assets deposited — “locked” — in a DeFi protocol.1
It's the most common way to size DeFi, despite its flaws.2
Think of it as the total money sitting in a protocol's smart contracts, priced in dollars.
How TVL is calculated
List the contracts
Identify the smart contracts that hold user deposits.
Count the tokens
Read how many of each token those contracts hold.
Price each token
Multiply each balance by its current market price.
Add them up
The total is the protocol's headline TVL.
Split by type
DefiLlama notes: we separate TVL into different types.3
Exclude off-chain assets
Leave out off-chain reserves — dollars in a stablecoin issuer's bank account, for example, don't count.3
Worked examples
Example 1 — Adding up TVL
TVL of $5MA hypothetical protocol holds 1,000 ETH at $2,000 and 3 million USDC.
| ETH value | 1,000 × $2,000 = $2M |
| USDC value | $3M |
| TVL | $2M + $3M = $5M |
Adding up the value of all deposits gives the protocol's TVL.1
Example 2 — Price, not deposits
TVL down 12% with no outflowsThe same hypothetical ETH price falls 30% and no one withdraws.
| New ETH value | $2M × 70% = $1.4M |
| New TVL | $1.4M + $3M = $4.4M |
| TVL change | −$0.6M (−12%) |
TVL rises with prices as well as deposits; the 2021 boom tracked the jump in crypto prices.2
Example 3 — Removing borrowed funds
$6M without borrowsA hypothetical lender reports $10M deposited, of which $4M has been borrowed out.
| Headline deposits | $10M |
| Excluding borrows | $10M − $4M = $6M |
DefiLlama lets users filter borrows, which it lists as deposits borrowed from the platform.3
TVL vs market cap
| Aspect | TVL | Market cap |
|---|---|---|
| Measures | Assets deposited in a protocol | Value of a token's circulating supply |
| Applies to | Protocols and chains | Tokens |
| Moves with | Deposits and asset prices | The token's own price |
| Common use | DeFi adoption and size | Ranking tokens |
How traders use TVL
Comparing protocols
TVL hints at depth and Liquidity.
Spotting flows
Rising TVL with flat prices suggests new deposits, a kind of Trend.
Rough valuation
Market cap to TVL is a crude Fundamental Analysis ratio.
Risk checks
Large TVL concentrates Counterparty Risk in one set of contracts.
Advantages and disadvantages
Advantages
- Widely available and easy to compare.
- Shows where DeFi capital sits.
- Useful for tracking flows over time.
- Can be split by chain and protocol.
Disadvantages
- Moves with token prices, not just usage.
- Methods differ between data providers.
- Can double count re-deposited assets.
- Says nothing about code safety.
Going deeper
Read as far as you need. Each level builds on the one before it.
Where DeFi value sits
Beginner
Around 60% of DeFi's TVL sits on Ethereum.2 Chain-level TVL is a quick way to see where activity is.
What to include
Intermediate
Data sites separate categories so you can choose — such as staked LP tokens paired with a platform's own token.3 Including such items can inflate TVL.
Limits of the metric
Advanced
Even regulators use TVL with caution, given its limits.2 Price swings and re-used collateral mean TVL is best read alongside volumes, fees and user counts.
Common mistakes
Reading TVL as revenue
TVL is deposits, not income.
Ignoring price effects
A falling market shrinks TVL without any withdrawals.
Comparing different methods
Check which categories each source includes.
Equating TVL with safety
Large protocols have still been exploited.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- TVL is the value of assets deposited in DeFi.
- It is calculated from token balances times prices.
- It moves with prices as well as flows.
- Providers count it differently.
- Use it with other metrics, not alone.
Frequently asked questions
Is higher TVL always better?
Where can I find TVL data?
Does TVL include staked tokens?
Further learning
- Liquidity
How deposits support trading.
- Market Capitalisation
The token-level size measure.
- Fundamental Analysis
Using on-chain data.
- Counterparty Risk
Risks of large protocol deposits.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- European Supervisory Authorities (EBA and ESMA). Joint Report on recent developments in crypto-assets (Article 142 MiCAR, 2025) (opens in a new tab) Checked .
- European Securities and Markets Authority (ESMA). Decentralised Finance in the EU: Developments and risks (TRV, Oct 2023) (opens in a new tab) Checked .
- DefiLlama Docs. What to include as TVL? (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.