What Is TVL in Crypto? Total Value Locked Explained

TVL stands for total value locked, and it is the simplest measure of how big a crypto app is. It adds up the value of everything people have deposited into that app right now, priced in dollars. If users have put a billion dollars of coins into a lending protocol, its TVL is a billion dollars. Tracking sites such as DefiLlama publish the figure for every major project, which is why you see apps ranked by it.

What does it actually tell you?

It is a deposits number, much like the amount of money a bank branch holds for its customers. It says how much people are willing to trust the app with today. Aave holds deposits that others borrow against, Uniswap holds the shared pots that trades run through, and Lido holds ether that is staked on users' behalf. A large, steady TVL usually means an app has been around long enough for careful people to use it. It does not say whether the app earns anything.

Why does the number jump around?

Because it is measured in dollars. If the price of ether falls by a third overnight and nobody withdraws a single coin, the TVL falls by a third too. That trips up a lot of readers, so check whether a drop came from prices or from people actually leaving.

What does TVL hide?

Three things worth knowing. The same money can be counted twice, because a coin staked with Lido can be deposited again into a lending app and show up in both totals. Much of it is temporary, parked wherever the rewards are highest that week and gone the next. And a big number is not a safety rating: several protocols that were later drained had impressive TVL right up until the day they were.

Use it as one signal among several. The more useful question is not how large the TVL is today, but how long it has stayed that size and whether it survived the last downturn. To see where the deposits actually go, read our guides to liquidity pools and market cap, which measures something completely different.